A “clerical error” made by the Town of Newburgh Assessor is going to cost the Marlboro School district dearly in the 2017-18 school year; $1,180,945 to be exact.
Last week the Orange County Real Property Tax Service Agency and the Town of Newburgh’s Assessor’s Office informed the Marlboro School District that in September they made a $15 million “clerical error” in calculating this year’s assessment for the Roseton Power Plant. Marlboro relies on the Assessor’s office for accuracy when compiling their school budget and tax bills.
The Roseton plant is under a federal court-ordered settlement that each year reduces their assessed value and thus lowers the amount they pay in school taxes. The settlement reductions will conclude in 2019.
For this year’s tax bill, the Newburgh Assessor failed to apply the court-ordered reduction and instead used the previous year’s figures, resulting in a tax bill for the plant of $4,130,758 on an assessment of $50,672,200. Representatives for the Roseton plant filed for a corrected tax roll that lowered the their tax bill to $2,907,969 on an assessment of $35,672,200.
All of this leaves the Marlboro School District in a bind on how to make up for the unexpected shortfall; either make cuts of nearly $1.2 million or tap their fund balance for the amount, an option the administration and school board appear to be favoring.
In a prepared statement, Marlboro School Superintendent Michael Brooks addressed the impact of the assessor’s “clerical error.”
“The implications of this mistake are serious; unless the money can be recovered through other sources, it will likely need to be made up by using existing fund balance and reserves,” he said, “This will set back the district’s long-term financial strategy for building up its Capital Reserve by at least two years. The Capital Reserve was approved by the district voters to offset tax implications for making future facilities improvements and repairs.”
Brooks noted that while Roseton received a higher tax bill than expected, the residents of Marlborough realized a decrease in their 2017-18 tax bills that were issued on September 1. Residents in Marlborough and Plattekill on a home assessed at $200,000 and with basic STAR should have paid $166 more in taxes and those residing in the Town of Newburgh should have paid an additional $158 in their taxes.
Brooks said because the tax bills have already been issued, the district cannot redistribute the levy using corrected values.
“The adjusted amounts can be incorporated into next year’s tax bills, but this will not recoup the loss from this year’s revenue,” he said.
Brooks was sharply critical of what has happened to the district, stressing that this came as a complete surprise to him and to the district’s business office.
“We have been strategically addressing the devaluation of the power plant for the past five years, making budget decisions and adjustments to protect our educational program and to minimize the impact of the reduced tax base,” he said. “The loss of [nearly] $1.2 million undermines the hard work that has gone into creating fiscal stability for our community.”
Director of Business and Finance Patrick Witherow said the Town of Newburgh Assessor and the Orange County Office of Real Property are responsible for setting the tax rolls.
“Because of that error we set our tax levy and sent our tax bills out based on incorrect data because the county and the town [of Newburgh] provided us with the overall valuation from the properties within the school district that are located in the Town of Newburgh, the Town of Marlborough and the Town of Plattekill,” he said.
Witherow said when the numbers did not seem quite right he pressed the Assessor, who assured him that the numbers were correct. Only later did Witherow discover the error, saying the school district was not at fault for the miscalculation and based their own numbers on “erroneous information,” which will short the district by $1,180,945 in their tax collection this year.
“That’s a huge hit for us to take because that is essentially $1.2 million we have to come up with to fund operations for the 2017-18 school year; we have to fill that hole,” he said. “We’ve essentially given back $1.2 million to all the taxpayers in the district because we were expecting to raise $34 million and instead only raised $32.8 million. Its a huge, huge mistake.” School Board member Frank Milazzo commented, “All I can say is I’d get fired if I made a $1.2 million mistake.”
Brooks said he plans to meet with local, county and state officials to see if they would be able to assist the district on what he has described as a “major discrepancy.”
“I am not passively accepting this loss without making sure we have done everything possible to minimize negative impacts to our schools,” he said. “I will continue to push for solutions that do not come at the expense of our students and community.”
The School Board approved a resolution from the Orange County Office of Real Property for a corrected tax bill for the Roseton Power Plant. Witherow explained that the school board accepted the correction because the tax bill was incorrect and that Roseton was not responsible for the error.
“There is an 8-day grace period after the Board of Education accepts the correction for Roseton to make payment without any late fee. The longer we wait to correct a known error in the bill, the longer we don’t have that revenue ‘in the bank.’”
Town of Newburgh Assessor Mary Carhart referred all calls to John McCarey, Director of the Real Property Tax Service Agency in Orange County. He did not return a phone call for comment on this story by press deadline.
By Mark Reynolds