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Whitehall school officials did a rough estimate of their revenues and expenses for 2012-13, and found the budget would increase 17 percent. But with a new property tax cap law, 2 percent is the most Whitehall could raise in taxes.

While voters would shoot down a budget with a 15 percent tax hike, Whitehall would seek some increase in taxes, more than 2 percent, at least.

But now with a property tax cap in New York, and slim chances the state will increase aid for education, Whitehall's only option is to cut expenses.

"I think it's going to be brutal," said James Watson, the superintendent at Whitehall, of the tax cap impact on his district, where enrollment is 750 and state aid pays for half of the $13.4 million budget.

Local school officials have similar concerns. While in theory the tax cap looks like a good idea, they say the state has not done enough to remove the mandates that put a financial burden on school districts.

Watson, whose district is planning a 1.89 percent tax levy increase for 2011-12, said lawmakers, when approving the tax cap, did not consider the size of school districts, their reliance on state aid, and the costs of special education.

He said the tax cap is an "arbitrary figure" and a "one size fits all" approach that won't work with all school districts.

"I think it's going to change the entire way of thinking about how we are building our budget," he said. "They are telling us, ‘This is how your budget is going to be.' Now we have to go about the business of how to get there."

Patrick Dee, the superintendent at Lake George, where the tax levy will increase 2.33 percent, said the district could face a budget shortfall of $800,000 to $1 million in 2012-13. Cuts to jobs and programs will be necessary to close the gap.

"We will get through this, but schools are going to look substantially different than they presently do," Dee said.

The tax cap - the first in New York - was signed into law on June 30. The law will cap property tax increases at 2 percent or the cost of inflation, whichever is less. Voters could override the cap with a 60 percent vote on the budget.

The bill is meant to provide relief to property owners and keep people from moving out of the state due to New York's high property taxes.

According to Gov. Andrew Cuomo's office, the median U.S. property tax paid is $1,917. In New York, it's $3,755. From 1998 to 2008, property tax levies in New York increased by more than 73 percent - more than twice the rate of inflation.

Limited exceptions to the cap will be allowed. For instance, districts can use additional taxes to pay for pension costs, when the system's average rate increases by more than 2 percentage points from the previous year.

School officials say they still have to determine how the exception on pensions will affect their districts. But without relief from mandates such as pensions and special education, school districts will continue to face financial trouble.

"If there is no mandate relief associated with the tax cap, then there will be some serious financial issues for schools," said Douglas Huntley, superintendent at the Queensbury district, which has kept the tax levy increase under 2 percent for three straight years.

Wesley Clark, business administrator at the Greenwich district, where the tax levy is going up 0.83 percent, said the Senate recently lifted a few mandates, but it's not enough. He said the tax cap will limit the programs offered at Greenwich.

"It will eventually curtail programs that the school can offer because we won't be able to afford them, especially in an era of state aid cuts," he said. "If your state aid is cut and the tax levy is capped, then you have to cut programs."

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