SAD 63 board votes to oppose Palesky tax cap

HOLDEN – Trying to figure out how Carol Palesky’s tax cap would affect SAD 63 is like “dealing with Jell-O,” Chairman Don Varnum said at Monday’s board meeting.

Exact numbers remain up in the air, but it appears that under the tax cap, which will go before voters in November, the district could lose a quarter of its budget or nearly $2.6 million.

“At best guess, that’s what we’d lose,” Varnum told the board. “There is no question about it – it’s going to be destructive for this district and all school districts.”

After hearing that news, the board voted to 5-0 to oppose the tax cap with Richard “Dick” Perry and Dion Seymour abstaining. Board member Scott Baillargeon was absent.

The tax cap initiative would roll back valuations to 1996-97 levels, cap property taxes at $10 per $1,000, and would limit increases in assessments to 2 percent a year as long as the property remains in a family.

At first it looked as though community school districts and SADs “would get off easy” under Palesky, but that is not the case, according to Superintendent Louise Regan.

“This is not scare tactics,” she said. “It’s going to have an impact on how schools are funded. It’s going to shift from local control to state control … as a result of that tax cap initiative.”

There are several crucial questions that remain unanswered about the initiative, but the most important for the district is if a school district would be treated as a governmental unit, such as a county, Regan said. SAD 63 officials believe that is how the tax cap is written, which would mean additional cuts for the district.

Projections show the three communities that compose SAD 63 – Clifton, Eddington and Holden – could drop their assessment by a combined total of $1.7 million under Palesky.

“Besides losing that money we would also be held at that 10 mill limit” as a governmental unit, Regan said. “It looks like we’d lose 5 mills or approximately $900,000 in assessments from the towns.

“It’s looking pretty dire and pretty scary,” she said.

This year’s SAD 63 budget is about $8 million. To cut $2.6 million the district would chop extracurricular programs such as sports, art and employees, Varnum said.

To prepare for the potential impacts, SAD 63 officials will be “looking at the worst-case scenarios in-house” and are planning a public meeting if the initiative passes.

Other issues that come into play include the state changing its funding model and paying 55 percent of education costs. This year the state paid about 43 percent of education costs with the remainder paid through property taxes. The state has yet to inform the district how it will pay its 55 percent share of school costs, so it’s impossible to determine how the district would fare, Regan said.