For the first time since New York State’s tax-cap rules went into effect, the Montauk School District is putting an over-the-tax-cap budget proposal on the ballot: a $22.73 million spending plan that maintains all current programs and services but asks the taxpayers to support a tax-levy increase of 18.56 percent for the 2023-24 school year.
This year’s situation has been brewing since 2016. In an audit that July, the New York State comptroller found the Montauk School District had overestimated its budget, kept surpluses that exceeded state limits, and overfilled some of its reserve funds. The directive at the time was clear, Jack Perna, the district superintendent, said this week: The district needed to spend it all down.
In the ensuing years, that’s exactly what Montauk deliberately did, applying big chunks of “unappropriated fund balance,” as it’s known in the school-finance world, to offset budgets that would have otherwise had a higher tax-levy impact. For several years, its tax-levy increases were far below the state-imposed limits, and the budgets in the 2019-20 and 2021-22 school years actually showed six-figure decreases in overall spending.
Add to that the immense amount of money the district spent, Mr. Perna said, from its fund balance during the Covid-19 pandemic. Supplies, equipment, and supportive programming for the students all came out of that fund balance, as the operating budget had already been set in stone the prior year.
Had the district not depleted its surplus, Montauk would be in a better place now. “We had the auditors telling us one thing, but the accountants telling us another thing,” Mr. Perna said.
This year’s over-the-cap budget plan in Montauk will need a supermajority of at least 60-percent voter approval in order to pass. Even a single vote can sway the outcome, which is what happened when the Bridgehampton School District passed its 2021-22 budget on the second try that year. The Springs and Wainscott School Districts are also seeking to override the state tax cap this year.
“In my experience, the community has always been very supportive,” said Mr. Perna, who will retire in June after 50 years with the Montauk School District. “I did pass, once, a 16-percent increase — years ago, about 15 years ago — prior to the tax cap. I’m hoping that the community is supportive again.”
Like other local districts, Montauk is being hit hard by interest rates on routine borrowing — what used to be a $40,000 expenditure will double next year — and on employees’ health insurance, which is slated to rise by more than $600,000. That’s an increase of nearly 28 percent.
The budget adds about $8,000 for the supplies for the school’s Enrichment for All program, bringing the total cost up to $11,000. Spending on services like special-education evaluations, speech therapy, and occupational therapy is also rising. There’s about $229,000 more for busing, up to $1.66 million, which includes pay raises for the bus drivers.
In all, the $22.73 million budget includes a year-over-year spending increase of 8.1 percent, or $1.7 million. Taxes on an average single-family house would rise by about $96 for the year.
“We’re being optimistic,” Mr. Perna said. “We understand what it’s doing to everybody, but even inflation alone, that’s hitting us just as much as it’s hitting everyone else.”
A public hearing on the budget is planned for Tuesday at 6 p.m. in the school library.