LOWVILLE — With property values continuing to climb, Lowville Academy and Central School District's stable tax levy has resulted in a 10.2 percent drop in the full-value tax rate.
While district residents likely will not see a significant change in their school taxes, the rate decrease may lead to a drop in Maple Ridge Wind Farm revenues.
The LACS Board of Education on Aug. 11 approved a tax levy, or total to be raised by property taxes, of $3,851,072. That's the same amount as last school year.
However, the school district's full taxable assessed value has increased by $43.29 million, from $384.13 million to $427.42 million. That caused the full-value tax rate to drop from $10.03 per $1,000 of assessed property value to $9.01 per $1,000.
Of the $3.85 million tax levy, $855,756.49 is to be picked up by the state through the STAR, or School Tax Relief, program. That's down from $954,274 last year, due to a reduction in STAR exemptions.
Town of Lowville residents, who will contribute 51.5 percent of the district's levy, will receive a basic STAR exemption of $37,810 in full assessed value, down from $42,010 last year.
The town's equalization rate — set by the state based on how assessed values on a few selected properties in the town compare with their estimated market values — also has dropped, from 100 percent to 96 percent.
On a Lowville home assessed at $100,000, the full assessed value would be $104,167. And, with the lower STAR exemption, that homeowner would ultimately be taxed on a $66,357 assessment, up from $58,000 last year. The result would be a tax increase from $581.48 to $597.88.
The town of Watson — which will contribute 13.9 percent of the district levy — still has a 100 percent equalization rate, but the basic STAR exemption will drop from $34,520 to $31,070. The owner of a $100,000 home there would still see a tax reduction from $656.47 to $621.07 unless the assessment was raised.
STAR rebate checks will be sent out in October. Basic STAR recipients in the town of Lowville with household incomes less than $90,000 will receive $260.08, while those in Watson will receive $277.14.
Rebate amounts by county, school district and town are available at the state Department of Taxation and Finance's Web site.
The 2008-09 LACS budget hikes spending from $19.37 million last year to $20.86 million. Increased state aid and wind farm revenues allowed district officials to maintain a stable levy.
The school district in January received $3.57 million from an $8.1 million wind farm payment to Lewis County. Annual payments are based on a 15-year payment-in-lieu-of-taxes plan and a distribution agreement among involved taxing entities.
For the first five years, starting with last year, the 195-turbine wind farm's payments are primarily based on the actual amount that would be paid in taxes on the 140 Phase I turbines. Since the assessed value of the turbines is essentially fixed, a drop in combined tax rates would ultimately result in a smaller payment.
Assuming the other major wind farm beneficiaries — the county and towns of Martinsburg and Harrisburg — choose to keep their levies stable, as well, the payment amount will certainly decrease, Mr. McAuliffe said. However, the extent won't be known until county and town tax rates are set in late fall, he said.
The major PILOT players have advocated long-term tax stability, rather than short-term tax reduction, as the way to best utilize wind farm benefits.
"I think we're trying our best to give people the best tax rate while still trying to protect the district's future," Mr. McAuliffe said.
After the first five years of the PILOT, payment amounts won't be so closely tied to tax rates, allowing more leeway for tax reduction, he said.
This year's school budget only anticipates $2 million in wind farm revenues, meaning any extra will roll into the district's fund balance. The state recommends that a district's unreserved fund balance be limited to 4 percent of its budget, or about $835,000 in Lowville's case.
To help avoid a fund balance several times over the limit, the Board of Education has approved the transfer next spring of up to $2.21 million into specific reserve accounts. They include up to $1,043,000 for claims denied coverage by the district's insurance carrier, $625,00 for liability claims against school-related organizations like the Parent Teacher Organization that may not be covered, $338,000 for accrued benefits to any fired employees and $100,000 apiece to cover potential costs of tax assessment challenges and possible reimbursement to the state Unemployment Insurance Fund.
Any of the money could be moved back into the general fund in the future, if needed, Mr. McAuliffe said.