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The proposition would continue KCSD's path of fiscal responsibility.
The proposition would continue KCSD's path of fiscal responsibility.
Our job is to be good stewards of tax dollars – and we take that very seriously here in Kingston City School District (KCSD). Every dollar from the community used to care for our buildings is thoughtfully allocated, often allowing us to complete capital projects at or below budget and maintain quality educational programs for students. “Deferred maintenance” is one factor that balances the need for building care and educational programs, as Superintendent Dr. Paul Padalino explained during our virtual forum at about the 14:30 time mark.
Our dedicated operations and maintenance team routinely cares for our schools and their systems and skillfully repairs them through the operating budget. Once infrastructure nears the end of its useful life, however, parts become obsolete, repairs become expensive, and upgrades through a capital project become the most fiscally responsible course of action.
This approach has laid a strong foundation for us to pursue a $162.5 million improvement plan that allows us to make the most critical upgrades in nearly all of our school buildings while minimizing the tax impact for our communities. This capital project will be a second proposition on the May 16 ballot, along with a separate proposition asking voters to approve the operating budget.
Four-Part Funding Strategy
State Aid: New York State Building Aid would pay approximately 76.7% of the total aidable costs of the $162.5 million project. This reimbursement by New York State would redirect our state tax dollars back to the local community.
Capital Reserve: Savings from past years accumulated in a voter-approved Capital Reserve will contribute $10 million to offset costs by reducing the amount the expenditures that will be paid for with long-term debt.
Debt Payoff: The District is nearing the final payoff for debt over the next five years from a previous capital project. That will help to reduce the tax impact over time as older debt payments drop off and others begin for the new capital project.
Local Tax Impact: An anticipated tax increase of about $9 per month is projected for a home assessed at $200,000, projected to begin in the 2025-2026 school year.
Tax Impact Explained
The owner of a home assessed at $200,000 is currently paying about $15 per month for the capital portion of the tax levy, depending on the municipality where that home is located. If the proposition passes, the same homeowner will start paying an additional $9 per month for school debt, projected to begin in the 2025-2026 school year. The District has strategically timed this so that when debt from previous capital campaigns is paid off, new debt will begin shortly after.
Assessed Value
Assessed value is used to calculate how much a homeowner pays in taxes. This is different and typically much less than market value, or what your home would sell for in today’s current market.
If voters approve this proposition, anticipated tax increase of about $9 per month would begin in the 2025-2026 school year for a home assessed at $200,000.
Capital Reserve
A Capital Reserve is a voter-approved, multi-year financial savings tool created to pay for large expenses associated with capital repairs, renovations, and construction projects. Establishing a Capital Reserve does not increase the separate budget for operating expenses, which is used for day-to-day costs. The reserve is funded with money that may become available at the end of the school year after all expenses have been paid. Voter approval is needed to establish the account, as well as authorize the use of the funds to a proposed project.
Using funds from the reserve allows a district to lower bond payments, thereby saving on interest costs, similar to the way an individual might make a down payment on a loan. Funds are specific to capital expenses and cannot be used in other areas of the budget. KCSD voters approved the establishment of a Capital Reserve in 2018 and it now has $10 million saved to help offset expenses related to this project.
Why Invest Now?
This proposition is part of a forward-thinking strategy to keep Kingston City Schools in great shape. That approach protects these community assets and supports the important work happening inside them. Delaying important improvements could lead to higher costs later due to inflation, energy inefficiency and risks of repairs.
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