Millburn District 24 knew it was in trouble well over a year ago as home values dropped, the state fell behind in its payments and grant money thinned.
So, district officials began to cut. They reduced spending $1.3 million last year by eliminating some teaching and support staff, cutting back on supplies and building maintenance, charging for building rentals and increasing user and registration fees.
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To balance the budget, the Wadsworth-based district restructured its transportation department. Teachers and support staff agreed to reduce raises from 4 to 2 percent and pay for administrators was frozen. Supplies were cut and three teachers who resigned were not replaced.
"We looked at everything," said Supt. Ellen Mauer.
But it hasn't been enough.
Taxpayers on Nov. 2 will be asked to bridge the gap by approving a tax rate increase of nearly 73 cents, mainly to offset the loss of late state payments. To balance the budget in 2011-12, the district would need to cut another $1.1 million.
For homeowners, the new rate would increase tax bills by an estimated $244 for each $100,000 of assessed value, meaning the owner of a $300,000 home would pay an additional $732.
A community forum on the referendum is scheduled for 7 p.m. Wednesday at Millburn West school, 640 Freedom Way, Lindenhurst.
The rate increase would raise more than $2.1 million to make up for shortfalls and pay down tax anticipation warrants.
"We were on our way to getting ourselves out of this before the state took back their part," Mauer said. "That's our major issue - we can't count on getting our dollars."
With state funding falling behind, the district has had to borrow to meet its obligations, she said.
Without the increase, district officials say, 19 of the district's 61 classrooms would be closed. Staff would be cut and students shuttled to other rooms, resulting in larger class sizes.
"We would still have had to do this (tax-hike request) at some point but not this quickly," Mauer said. "If we weren't desperate, we wouldn't be asking because of the economic climate. It doesn't seem responsible to make cuts of this magnitude without asking the public what it thinks."
Times have been tough the past few years as plans for a mega-subdivision in the district - along with the building fees and tax revenue it would produce - evaporated. The district has been on the state's financial watch list since 2007.
Most recently, property values in the district have dropped 8 percent or more, and the district estimates it is losing $530,000 each year because of state reductions.
"Our tax flow is so poor we need to take out tax anticipation warrants to make the payroll," Mauer said. "The only way to do it is to make (further) cuts or increase taxes."
If approved, the district would receive the full increase for one year. After that, the tax cap applies, limiting the amount the district can collect. Mauer said the district will have to cut about $400,000 in 2012-13 even if the tax hike passes.
Mauer said some parents are unhappy about the request, but she has not encountered any organized opposition.
District 24 has two K-8 schools, 1,677 students and about 214 employees.
"We wanted to let taxpayers know this was coming and that they had a choice," Mauer said.