The 90 Million Dollar Dig, How It Will Affect Your Taxes

Lying against the office wall of the Superintendent of Schools is a golden-colored metal shovel used on July 11th to commemorate the first stage of the School System’s reconstruction work.

imagesThat shovel, when all calculations are completed, will eventually be worth $90 million dollars by the time 20 years have gone by. According to Superintendent Howard Smith, the $90 million figure will eventually be the amount needed to pay back the $72.2 million bond expenditure and interest voted in March of 2005 by the residents of Tarrytown and Sleepy Hollow.

Smith explained that the initial construction borrowing will be somewhere in the range of $25-30 million and will be for a period of one year. The school system must follow state regulations and must perform construction for a known period of time at a known total expense. The amount borrowed can be put in a money fund and can earn interest, very often in excess of the actual short-term borrowing rate of 4%. Construction billing and payments will be made on an "as-you-go" basis.

For the duration of the actual construction, now estimated at three years, money will be borrowed in like annual amounts for planned projects now being overseen by JMOA of Pleasantville, the construction manager for the entire project. For the taxpayer, the "payback" will start out in year one with interest only on the initial amount being paid back. In years two and three, additional borrowing will continue until finally, in year four, all monies will have been borrowed with a full annual repayment schedule totaling roughly $5.5 million a year in both interest and principal. Since our school "operating" budget this year is $50.1 million, the $5.5 million annual repayment would amount to an additional 10% in school tax. However, diminishing this bond fund payback will be at least $1 million annually from a NY State Building Aid fund, plus the annual tax funds that will be coming in from both Ferry Landings (est. $2.5 million) and Lighthouse Landing (est. $6 million). While other additions could be made to the school tax total in the future, the payback on the bond referendum is obviously more than assured.

Smith also pointed out that the entire subject of school tax collection is now being examined by the School System’s Budget Advisory Committee which consists of School Board members Joe Lillis and Marc Kirschner plus several members of the two Villages. Tax certioraris continue to plague School budgeting, with monies paid out to complainants with the doubling effect of permanently lowering that property’s evaluation. The Committee has not only been looking at this problem for solutions, but is also talking to neighboring communities and the County to determine ways to be more equitable in how property taxes are assessed. At the moment, says Smith, there are conflicting rules in place, such as the taxing of condominium properties vs. homes, the valuation of commercial properties, the lack of full value from renters, and the entire question of updating all property evaluations to meet today’s actual values. Like all area communities, these problems are increasing pressure of creating a property tax system that is more equitable and in turn more effective than the current methods.

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