Most school districts on Long Island are struggling to rein in tax-levy increases for next year’s budgets, with some planning teacher layoffs and program reductions in the face of harsh inflation and the possible loss of millions of dollars in New York State funding.
That’s not the case in the Montauk School District, where in June of 2023, a school board member discovered a discrepancy in his school tax bill that will lead to a tax credit for Montauk homeowners next year.
For one year only — the 2024-25 school year — taxpayers will see a credit of 7 percent in their school taxes. The school district will be returning about $1.7 million to its taxpayers this way, after school taxes were accidentally over-collected by the town tax receiver’s office. Taxpayers were charged $56 more per thousand dollars of assessed value.
“It’s the right thing to do for the taxpayers,” Nick Finazzo, the Montauk School Board member who discovered the discrepancy, said on Tuesday during a school board meeting.
Josh Odom, the Montauk superintendent, said it was also partly due to an oversight within the district, which didn’t immediately realize the error when the town sent the district its “tax sheet” laying out all the numbers. The tax sheet, he said, also included the Montauk Library’s tax levy.
“It looks like that library money was misread,” he said. “I don’t want to put it all on the town. There’s some fault there in the district.”
Becky Hansen, East Hampton’s town administrator, said yesterday that even the state’s real property tax laws acknowledge that mistakes can sometimes occur. “The town’s perspective is that based on information provided by the school district, the town collected what it believed was the appropriate amount,” she said.
The giveback of $1.7 million will show up in budget documents for the 2024-25 school year as a tax-levy decrease of about $2 million, or 13 percent. It’s very confusing, Mr. Odom said, because expenses are still rising in the district even as money is being returned.
The proposed 2024-25 school budget, while not yet set in stone, stands at $24.13 million, a year-over-year spending increase of about $1.4 million.
“We’re making extra investments in our summer camp and after school programs to keep those as robust as possible. We’re trying to invest in the health of and opportunities for our students,” Mr. Odom said.
The district is also anticipating rising costs for busing students because of the district’s remote geographical location. Montauk, which doesn’t have a cafeteria program, has also started offering fresh fruit (apples, bananas, clementines, and berries when in season) to the students if they want a snack.
But back to the overcollected money — Montauk did not spend any of it. “We put it in a high interest savings account,” Mr. Odom said by phone yesterday, “so there’s even more benefit to the taxpayer there in that we will return those funds plus interest.”
“The awkward part,” he said, was that just one month prior to the discovery of the mistake, a supermajority of Montauk voters said “yes” to an over-the-tax-cap budget for the 2023-24 school year.
“The hard part,” Mr. Odom said, “was to find the mechanism to return it. . . . We worked with the state comptroller, our auditors, accountants, lawyers. It has been a process to find the solution that we think is the most ethical path forward for the residents of Montauk.”
After the error was discovered in June 2023, the school board moved quickly to create a “tax excess” reserve account to ensure none of it would be spent while district officials sorted it out.
Concurrently, it was also discovered that financial statements for the 2021-22 school year were in arrears. Mr. Odom and Fernando Osorio, Montauk’s business administrator, took on a complete review of them, and on Tuesday this week, the school board approved a batch of financial statements and budget transfers that closed out that issue.
“We’re caught up and everything’s being submitted,” Mr. Odom said. “We should be back on schedule with all the future statements. On a fiscal level for Montauk, it’s been a very productive year. If there’s a silver lining, it’s that moving forward, the district is in a really healthy place.”