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Canton and Potsdam merger could reduce taxes, save programs, consultants say

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CANTON — Merging the Canton and Potsdam school districts could lower taxes for property owners in both districts, according to projections released Monday evening to the Joint Advisory Committee.

A merged district also could replenish fund balances and preserve programs for students, said consultants from Western New York Educational Council, Buffalo.

Combining the two districts would save an estimated $975,000 a year, including $775,000 through employee cuts and $200,000 in other efficiencies.

Those savings, combined with $35,275,563 in state incentive aid over the next 14 years, should allow a merged district to reduce the school property tax rate for both Canton and Potsdam, the data show.

The reduction would be greatest in Potsdam, where district residents could see their property tax rate decrease from $22.74 per $1,000 of assessed property value to $19.78. Neighboring Canton could see its tax rate decrease from $19.65 to $19.25 per $1,000.

Thomas G. Coseo, a consultant, said state aid cuts have forced both districts to significantly deplete their fund balances. The districts cut a total of $6 million in staffing and programs since 2008-09.

“During the last few years, expenses have exceeded revenues in both districts,” Mr. Coseo said.

A merged district is projected to receive $3.7 million in extra state aid for five years starting in 2015-16. That amount would decrease gradually to $371,322 in 2028-29.

“You’ve got to decide whether the incentive is enough to go through with the merger,” Mr. Coseo said.

Margaret McGovern, a Canton high school teacher and advisory committee member, questioned whether the incentive aid will be enough to reduce taxes, build up the fund balance and preserve student programs.

The additional $35.3 million in state aid should allow the merged district to rebuild a fund balance as long as future spending is scrutinized carefully, Mr. Coseo said. Under a merged scenario, the fund balance could reach $9.7 million in 2019-20.

“Unless changes are made on the expenditure side, you could end up back where you were,” he said. “If you don’t just spend all this in the first years, the fund balance grows with the incentive aid.”

Ms. McGovern also asked if the two districts could merge without making students travel from one community to another.

“It doesn’t make sense to move kids because the state says we have to move kids,” she said.

Douglas B. Hamlin, another member of the consultant team, responded that the state would not provide the merger incentive aid under that scenario.

“You can do what you like, but you’re not going to get the $35 million over the next 14 years. The way the state gets mergers is to incentivize them,” he said.

Annual expenses in the Potsdam district are higher than in Canton, largely because the community has greater debt service payments for past capital building projects, Mr. Coseo said.

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