Board hears budget outlook as benefits, health costs push proposed tax levy higher; board trims capital line

The Three Village Central School District on Feb. 12 received a detailed budget briefing from the district—business official laying out the tax-cap calculation, projected state aid changes and major cost pressures for the coming fiscal year, and the board voted to reduce the district—proposal for the annual capital projects line from $3,000,000 to $1,500,000 for budget planning.

District business staff told the board the state—calculation of the maximum allowable tax levy for 2025-26 is $180,473,730, a 3.64% increase over the current year—levy if capital project assumptions are left unchanged. The presenter said the calculation reflects a 2% levy growth factor, a small tax-base growth factor (0.13%), and an estimated change in prior-year building-aid timing that raised the district—capital tax levy component from $4.4 million to $7.1 million in the tax-cap formula.

Why it matters: the presentation warned that rising employee benefit costs will consume much of any additional levy room. Health insurance premiums were shown to be budgeted to rise by 12.7% next year, and the combined impact of health, retirement and payroll-related costs was estimated at roughly $6 million in added expense based on current staffing levels. The teacher retirement system employer rate to use in planning was announced at 9.59% for the coming year.

In the discussion that followed, board members pressed staff on options for reducing the tax impact and on the trade-offs of lowering the annual capital projects allocation. The business official said the capital line is separate in the state—tax-cap treatment and recommended keeping funding steady to address ongoing building needs; he noted the district——debt schedule will reduce debt service sharply in future years, creating an option to increase capital then or reduce levy pressure.

The board moved to lower the preliminary capital projects figure used for comptroller reporting from $3,000,000 to $1,500,000; trustees recorded four votes in favor and one opposed. Board members also asked staff to return cost details and options for how any freed capacity would be deployed (for example, toward capital projects versus lowering the tax levy) and to provide updated figures when staffing decisions are final.

Next steps: the business official reminded the board that the district must submit its tax-cap filing to the New York State Comptroller by March 1; formal budget development and public workshops will follow in March and into the spring.

"This is the quandary we—have as we begin budget discussions," the presenter summarized when outlining the roughly $6 million benefit increase versus the additional levy room the cap calculation provides. The board directed staff to prepare the more detailed cost breakdowns requested and to include capital alternatives and implementation timing in forthcoming budget workshops.

Ending: Board members said they would continue the conversation at upcoming budget workshops, with staff to provide a final set of options tied to staffing and program decisions before the tentative budget is adopted.