NORTHVILLE - The Broadalbin-Perth, Mayfield and Northville school districts are struggling to develop budgets for the 2012-13 school year, handcuffed in part by hundreds of thousands of dollars in unpaid taxes from the Hudson River-Black River Regulating District.
The cash-strapped regulating district, which manages the Great Sacandaga Lake, did not have money to pay millions in 2009-10 and 2010-11 school and local taxes on time. It took a lawsuit from the schools and county and a loan from another part of the agency before the regulating district paid its overdue bills in August.
Six months later, the 2011-12 taxes are unpaid, and school officials don't expect to see the funds anytime soon,
The regulating district owes Northville $360,000 for this school year, Superintendent Kathy Dougherty said. She said the missing money creates an especially difficult burden for Northville because it makes up a notable part of the district's $9.7 million budget.
Broadalbin-Perth is working on a $29 million budget. Mayfield is working on a $16 million budget.
Northville Business Manager Bruce Ellsworth said without dipping into reserves, the district would be looking at a 13.5 percent increase in the tax levy.
"The problem is, the state says you can raise taxes no more than 4 percent," he said, referring to a state-instituted cap on the tax levy, which varies among schools. "Unless we get the approximately $360,000 owed by [the regulating district], there's no way we can adhere to the 4 percent increase limit without totally depleting our fund balance."
Dougherty said that because the school districts may not know how much aid they'll be receiving until April, school budget calculations are a "bit of a guessing game."
"I don't have good news," Dougherty said. "It's possible we will have to make some reduction in staff."
She said the school has to notify teachers of potential cuts by March 1.
Mayfield is owed $372,000 by the regulating district, which would add almost 6 percent to the tax levy, Superintendent Paul Williamsen said.
"That is not going to happen. Our [board of education] is looking at increasing the local tax levy by 2 percent or $132,112," he said in an email.
Broadalbin-Perth is expected to propose a $29.3 million budget, which would be $463,000 less than last year, Business Manager Marco Zumbolo said
Because of a 1.5 percent drop in state aid and less fund balance available, the district will still need to increase the tax levy by $414,000 in spite of the decreased total budget, he said.
Broadalbin-Perth is owed $289,402 by the regulating district for the 2011-12, which the school district covered with reserves.
"That amounts to about four faculty members we could hire back if we had the money," Zumbolo said.
He said since the economic downturn in 2008, Broadalbin-Perth has eliminated eight nonmandated positions because of a lack of funding.
In an open letter to Gov. Cuomo. Superintendent Stephen Tomlinson addressed the unpaid-tax issue as part of the budget crunch and described how it may affect the coming school year.
"In order to close our budget gap for 2012-13, we're looking at eliminating art and music instruction in our elementary schools, French as a foreign language offering, upper-level Spanish classes, social workers, and all interscholastic athletics and extracurricular programs," he said in the letter.
"We will also reduce technology instruction at our elementary and middle schools; health instruction at our middle school; science, social studies and business electives at our high school; career and technical education opportunities for our high school students; and will revert from full-day to half-day kindergarten," the letter said.
Tomlinson went on to say he didn't want to cut these programs, but may not have a choice.
In Broadalbin-Perth, a contingency budget of $29.5 million was $15,200 lower than the spending plan rejected by the voters, but taxes still rose an average of 5 percent. The budget still included five staff cuts.
The regulating district lost one of its main revenue sources in 2008 when a U.S. Court of Appeals ruling stated it could no longer charge fees to downstream hydropower companies.
In 2010, the regulating district assessed $15 million in flood-protection fees to five counties - Albany, Rensselaer, Saratoga, Warren and Washington - which was upheld in Saratoga County Supreme Court. The counties appealed the judge's decision.
In March, the Mayfield, Northville and Broadalbin-Perth school districts joined Fulton County in an Article 78 legal action to compel the regulating district to pay the taxes.
Then, in August, the regulating district's board voted to liquidate more than $3 million from its Black River section and loan the funds to the Hudson River section to fulfill a court order by state Supreme Court Justice Richard T. Aulisi, who ordered the regulating district to pay Fulton County the full amount due to it and the school districts. The county then paid the school districts.
On Aug. 30, Fulton County Treasurer Terry Blodgett delivered a check for $617,911 to the Northville Central School District, another for $703,418 to the Mayfield Central School District and one for $417,225 to the Broadalbin-Perth Central School District.
Richard Nilsen covers rural Fulton County and southern Hamilton County. He can be reached at ruralnews@leaderherald.com.