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N.Y. lottery winner's gain hurts his home town

After the Big WinAfter the Big Win: N.Y. lottery winner's gain hurts his home town
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GREEN ISLAND, N.Y. — One Green Island, New York, resident's Lottery bonanza could be a financial nightmare for the village's tiny school system.

John Kutey's $28.7 million share of the $319 million Mega Millions prize in 2011 may lead to a mega cut in state aid for the Green Island Union Free School District.

At risk are the district's staffing and educational programs. Saving them may mean another double-digit jump in property taxes.

The village has the second largest tax levy rate hike in the state this year at 12.47 percent.

"It's the perfect storm: a small impoverished district with the big Lottery winner," Superintendent Michael Mugits said.

The Heatly School, the district's only school, has 331 students from kindergarten through grade 12. Fifty-nine percent of the students receive free or reduced cost meals.

Kutey was one of seven employees at the New York State Homes and Community Renewal in Albany who cashed in the winning Mega Millions ticket.

"We'd all like to be in his spot," Mugits said of Kutey. He could not be reached for comment.

Green Island finds itself in a different spot, facing a state aid squeeze because the state uses the aggregate income of a district's residents to calculate some forms of school aid. About 45 percent of the district's $6.8 million budget is funded by the state.

Kutey's $28.7 million jackpot is equivalent to 68 percent of the previous $42 million annual earnings of the 2,610 residents of the seven-tenths-of-a square-mile village. Add the numbers together and the Green Island's income jumps to $70.7 million.

The income boost makes Green Island appear on paper to have the same resources as the Capital Region's richer and larger suburban districts.

"The odds were against this happening. When I called the state about this, I thought I had lost the call," Mugits said about the long silence that greeted his request for help on how to handle the problem.

The state Lottery was created to fund education. In an unexpected twist the Lottery may cost Green Island a significant portion of its state aid.

Just what will happen is not known as it appears the situation was never anticipated at either the state or local level.

"It only just came to our attention, and we're studying it," Tom Dunn, a spokesman for the state Education Department, said last week.

How huge a reduction in state aid Green Island faces is unknown. A lost of 10 percent would be roughly equal to the $348,080 the district lost in payment in lieu of taxes from the Green Island Power Authority after its revenue from the sale of hyrdroelectric power plummeted.

To fill the whole in its budget, the district cut spending but was still forced to impose the 12.47 percent tax levy increase, which the voters overwhelmingly approved May 15.

It may take action by the state Legislature to rescue the district's finances, Mugits said.

Meanwhile, Green Island village government should escape major problems because the municipality's aid is based mostly on population, said Sean Ward, executive assistant to Mayor Ellen McNulty-Ryan.

There may be some small impact on housing programs that rely on income, he noted.

Thanks to mediabrat for the tip.

Times Union

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19 comments. Last comment 2 years ago by time*treat.
Page 1 of 2

United States
Member #111446
May 25, 2011
6323 Posts
Offline
Posted: May 30, 2012, 7:08 am - IP Logged

One Green Island, New York, resident's Lottery bonanza could be a financial nightmare for the village's tiny school system.

John Kutey's $28.7 million share of the $319 million Mega Millions prize in 2011 may lead to a mega cut in state aid for the Green Island Union Free School District.

At risk are the district's staffing and educational programs. Saving them may mean another double-digit jump in property taxes.

The village has the second largest tax levy rate hike in the state this year at 12.47 percent.

"It's the perfect storm: a small impoverished district with the big Lottery winner," Superintendent Michael Mugits said.

The Heatly School, the district's only school, has 331 students from kindergarten through grade 12. Fifty-nine percent of the students receive free or reduced cost meals.

Kutey was one of seven employees at the New York State Homes and Community Renewal in Albany who cashed in the winning Mega Millions ticket.

"We'd all like to be in his spot," Mugits said of Kutey. He could not be reached for comment.

Green Island finds itself in a different spot, facing a state aid squeeze because the state uses the aggregate income of a district's residents to calculate some forms of school aid. About 45 percent of the district's $6.8 million budget is funded by the state.

Kutey's $28.7 million jackpot is equivalent to 68 percent of the previous $42 million annual earnings of the 2,610 residents of the seven-tenths-of-a square-mile village. Add the numbers together and the Green Island's income jumps to $70.7 million.

The income boost makes Green Island appear on paper to have the same resources as the Capital Region's richer and larger suburban districts.

"The odds were against this happening. When I called the state about this, I thought I had lost the call," Mugits said about the long silence that greeted his request for help on how to handle the problem.

The state Lottery was created to fund education. In an unexpected twist the Lottery may cost Green Island a significant portion of its state aid.

Just what will happen is not known as it appears the situation was never anticipated at either the state or local level.

"It only just came to our attention, and we're studying it," Tom Dunn, a spokesman for the state Education Department, said last week.

How huge a reduction in state aid Green Island faces is unknown. A lost of 10 percent would be roughly equal to the $348,080 the district lost in payment in lieu of taxes from the Green Island Power Authority after its revenue from the sale of hyrdroelectric power plummeted.

To fill the whole in its budget, the district cut spending but was still forced to impose the 12.47 percent tax levy increase, which the voters overwhelmingly approved May 15.

It may take action by the state Legislature to rescue the district's finances, Mugits said.

Meanwhile, Green Island village government should escape major problems because the municipality's aid is based mostly on population, said Sean Ward, executive assistant to Mayor Ellen McNulty-Ryan.

There may be some small impact on housing programs that rely on income, he noted.

Thanks to mediabrat for the tip.

This is obviously an unfair burden to the Green Island school district. Presently the Education Department doles out funding based on annual

earnings of districts residents. Because of the huge lottery windfall of one individual, the entire school district suffers.

 

Should be re-written as the municipality's aid now stands, based on population only.

 

Still a big congrat's to Mr. Kutey on his $28.7 million win!   Cheers

    loonasee2's avatar - 580603 549411115100199_1030671326_n.jpg
    Walmart #657
    United States
    Member #95130
    August 4, 2010
    6822 Posts
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    Posted: May 30, 2012, 7:51 am - IP Logged

    Ya know the taxman is always right there taking a leak in your corn flakes.The taxman will get everybody's taxes jacked up,and Mr. Kutey will pack up and move on to new and bigger things.He can afford to.

    There should be away to exclude prizes and gifts from the taxman having a bonanza in are wallets.

    US Flag 

      dallascowboyfan's avatar - tiana the-princess-and-the-frog.jpg
      Oklahoma
      United States
      Member #82391
      November 12, 2009
      5409 Posts
      Offline
      Posted: May 30, 2012, 8:22 am - IP Logged

      Am I missing something(i'm confused), I thought state Lottery was created to help fund education, so now the state is going to punish the school becasue someone won the lottery in there cityWhat?

      I Love Pink & Green 1908

        HaveABall's avatar - rocket

        United States
        Member #72448
        March 18, 2009
        986 Posts
        Offline
        Posted: May 30, 2012, 11:08 am - IP Logged

        The article reads:  "The Heatly School, the district's only school, has 331 students from kindergarten through grade 12. Fifty-nine percent of the students receive free or reduced cost meals."

        Why are so many children being created by parent(s) who don't have enough pride AND money to pay for the already too highly subsidized daily school and food costs?  This 59% should be no more than 20%, in any U.S.A. city!! ... what percentage of these 'sub-parents' are even U.S.A. citizens?

        No No

        Having millions of dollars in my financial accounts means more, consistent fun for me.Lovies

          addai1516's avatar - bee
          Newyork City NY / westland michigan
          United States
          Member #93155
          June 23, 2010
          3422 Posts
          Offline
          Posted: May 30, 2012, 12:33 pm - IP Logged

          Congrats to the winner please enjoy your winnings . Lottries make more than you think, the city or state will still function..

            Cletu$2's avatar - Lottery-050.jpg
            S.E.Iowa
            United States
            Member #120509
            December 21, 2011
            534 Posts
            Offline
            Posted: May 30, 2012, 1:17 pm - IP Logged

            He will probably move anyway to avoid the " give me a portion of your winnings" crowd.Make the move sooner instead of later.Problem solved.

            When I was a boy I was told that anybody could become President; I'm beginning to believe it. ~Clarence Darrow

            There ought to be one day - just one - when there is open season on senators. ~Will Rogers

              time*treat's avatar - radar

              United States
              Member #13130
              March 30, 2005
              2171 Posts
              Offline
              Posted: May 30, 2012, 3:09 pm - IP Logged

              Currently, a K through 12 (or better) education can be had for the cost of a mid-range computer and web connection.

              They want to save money? Shut down the public schools.

              In neo-conned Amerika, bank robs you.
              Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.

                dpoly1's avatar - driver
                PA
                United States
                Member #66141
                October 16, 2008
                1450 Posts
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                Posted: May 30, 2012, 3:46 pm - IP Logged

                I don't have to worry about this where I live!
                No State or Local taxes on my lottery windfall when it gets here!

                dpoly1 - Playing the lottery to save the jobs of those that build, transport, sell & maintain luxury items! -

                 

                Eschew Poverty ........... Vote Conservative!

                  HaveABall's avatar - rocket

                  United States
                  Member #72448
                  March 18, 2009
                  986 Posts
                  Offline
                  Posted: May 30, 2012, 5:16 pm - IP Logged

                  Currently, a K through 12 (or better) education can be had for the cost of a mid-range computer and web connection.

                  They want to save money? Shut down the public schools.

                  You are correct.  Type

                  Local government has never been about "save money," or "solid child end knowledge/comprehension of 3 or 4  basic, everyday usage, concepts!"

                  Having millions of dollars in my financial accounts means more, consistent fun for me.Lovies

                    mediabrat's avatar - 18z0typ
                    upstate NY
                    United States
                    Member #108795
                    March 31, 2011
                    541 Posts
                    Offline
                    Posted: May 30, 2012, 5:35 pm - IP Logged

                    I don't have to worry about this where I live!
                    No State or Local taxes on my lottery windfall when it gets here!

                    Taxes on lottery winnings are not the issue.  The problem is that the winner's increased income shifted the median income for the village so high that the school district was not able to qualify for the same amount of state aid for which it had been eligible in the past.  The formula ties education funding to the income of the school district's residents, and the village is so small (only 2610 residents) that one person's multimillion-dollar windfall drastically skewed those income statistics.

                    States do not win the lottery.  PEOPLE win the lottery.

                      JAP69's avatar - Lottery-053.jpg
                      South Carolina
                      United States
                      Member #6
                      November 4, 2001
                      8511 Posts
                      Offline
                      Posted: May 30, 2012, 9:04 pm - IP Logged

                      The state might want to reevaluate how they come up with avg income based on the number of people in a community. One individual throws off the whole balance of avg.

                      It would seem this one individual does not own enough real estate in the community to make up for the loss. Now the increased burden has been put upon all the community who have lower incomes because one individual has a high income.

                      Lottery funds should be distributed on a per pupil basis throughout the state.

                      Stats hunting: Type

                        time*treat's avatar - radar

                        United States
                        Member #13130
                        March 30, 2005
                        2171 Posts
                        Offline
                        Posted: May 30, 2012, 9:45 pm - IP Logged

                        If their numbers had been based on median income, they wouldn't have run into this problem.

                        Instead, it was based on total income. Let 'em squirm.

                        Your income will never be so high that some bureaucrap won't think s/he knows better than you what it should be spent on ... part of that being a hefty salary for themselves.

                        In neo-conned Amerika, bank robs you.
                        Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.

                          sully16's avatar - sharan
                          Listens to the wind
                          Michigan
                          United States
                          Member #81740
                          October 28, 2009
                          19970 Posts
                          Offline
                          Posted: May 30, 2012, 10:38 pm - IP Logged

                          If their numbers had been based on median income, they wouldn't have run into this problem.

                          Instead, it was based on total income. Let 'em squirm.

                          Your income will never be so high that some bureaucrap won't think s/he knows better than you what it should be spent on ... part of that being a hefty salary for themselves.

                          Yep

                          There's only one US Flag

                            sully16's avatar - sharan
                            Listens to the wind
                            Michigan
                            United States
                            Member #81740
                            October 28, 2009
                            19970 Posts
                            Offline
                            Posted: May 30, 2012, 10:39 pm - IP Logged

                            Currently, a K through 12 (or better) education can be had for the cost of a mid-range computer and web connection.

                            They want to save money? Shut down the public schools.

                            You know it.

                            There's only one US Flag