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

May 30, 2012, 6:31 am (19 comments)

After the Big Win

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

Comments

mcginnin56

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 avatarloonasee2

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.

dallascowboyfan's avatardallascowboyfan

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?

HaveABall's avatarHaveABall

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

addai1516's avataraddai1516

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

Cletu$2's avatarCletu$2

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.

time*treat's avatartime*treat

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.

dpoly1's avatardpoly1

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

HaveABall's avatarHaveABall

Quote: Originally posted by time*treat on May 30, 2012

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!"

mediabrat's avatarmediabrat

Quote: Originally posted by dpoly1 on May 30, 2012

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.

JAP69's avatarJAP69

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.

time*treat's avatartime*treat

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.

sully16's avatarsully16

Quote: Originally posted by time*treat on May 30, 2012

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

sully16's avatarsully16

Quote: Originally posted by time*treat on May 30, 2012

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.

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