By Nick Buglione
McDonough, a Republican of North Merrick, recently introduced legislation in the Assembly that would amend the current education law to make it mandatory that school districts provide residents with tentative tax rates when disclosing their spending plans.
A Nov. 25, 2004, Herald editorial ("Schools need to be more forthcoming"), prompted the assemblyman to introduce bill A. 4047, he said. "It brought out the fact that when people look at the school budget, it doesn't tell them what it will do to their [taxes]," McDonough said. "At least give the people that warning up front, that if you vote for this budget, this is how much you're going to pay."
The tax rate is expressed in cost per $100 of a home's assessed value, which enables residents to estimate how much they'll owe in school taxes if they vote in favor of a budget.
School districts are only required to disclose the tax levy, which informs homeowners only of the percentage increase needed to generate enough taxes to run the schools. But that number is deceptive, because if a school district plans to raise the tax levy, say, 7.5 percent, that doesn't necessarily mean individual tax bills will be going up 7.5 percent.
Without the projected tax rate, a formula that the vast majority of school districts voluntarily provided up until two years ago, homeowners have no way of knowing what their tax bills will look like when they're mailed in the fall.
School districts claim that a few factors have now made it impossible to offer tentative tax rates. "The danger in a district trying to project a tax rate is the other variables that are not in our control," said Leon Campo, deputy superintendent of the East Meadow School District.
Two years ago, Nassau County complicated matters by changing the way a home's assessed value is calculated, which in turn drastically changed the way tax rates are figured, Campo said. Up until 2003, the county based assessed value on 1938 construction costs, with 1964 land values added in. Having dumped that antiquated system, the county decided to set assessed value at 1 percent of a home's market value. That part of the tax equation is simple enough: A house worth $400,000 has an assessed value of $4,000.
Under the old methodology, however, that same house most likely carried a much larger assessed value - of $5,000, $6,000 or more. But a decrease in assessed value doesn't mean a drop in taxes, because the district still needs to raise significant revenue from the community. So homeowners are now simply taxed more for every $100 of their homes' assessed values, and tax rates have ballooned. In some districts, homeowners now pay upward of $170 per $100 of assessed value.
This year, the county has again changed how it will determine assessed value, making it .5 percent of a home's market value. This will only further increase tax-rate figures.
Since the formula is always changing and has become so confusing, school administrators reason that it no longer holds any meaning. "How do we explain to a resident that last year the tax rate was $80 per every $100 and this year it's $160 per every $100, and that they essentially mean the same thing?" Campo said.
Critics argue that the real reason school districts don't want to provide tax rates, is that the huge numbers will scare residents into voting down their budgets. B.A. Schoen, a trustee on the Baldwin school board, says that's not the case. "I am not deceptive, and my colleagues are not deceptive," Schoen said. "To project a tax rate without the proper information could be deceptive. Certainly, it would be speculative."
Complicating any attempt to offer a tentative tax rate is the fact that school districts often don't know how much state aid they'll receive until well after the budget vote, administrators say. They argue that until they receive that figure, they aren't sure how much they'll have to tax homeowners.
Annual shifts in the base proportion, which determines how the tax burden is distributed among the four classes of property in a community - homes, apartments, businesses and utilities - makes figuring a tax rate even more difficult, school districts claim. Since the value of residential properties has outpaced commercial, homeowners have had to absorb more of the tax burden in recent years. So, in districts where taxes were supposed to be going up 8 percent, for example, homeowners experienced increases much larger than that.
And since school districts don't know what the base proportion will be until well after they've crafted their spending plans, it's hard for them to provide residents with formulas that will give them an accurate idea of what their tax bills will look like, they say. "The base proportion has shifted dramatically every year," Campo said. "Every year, they have been determining that homeowners should pay more and commercial and utilities should pay less, and that changes the tax rate."
But despite all these varying factors, Nassau County Assessor Harvey Levinson maintains that it is well within a school district's ability to project a tax rate when presenting its budget. Levinson has been working with school officials on this issue ever since his office was inundated with phone calls last fall from irate taxpayers shocked at the size of their tax bills.
"They felt that they had been had, because they voted for a budget with a 7 percent increase in spending and they wound up with a 10 percent increase in taxes," said Levinson, adding that he has lobbied school districts to be more forthcoming, and has made progress. "I think McDonough is on the right track. I think legislation is OK."
McDonough's bill has already been co-sponsored by a number of his colleagues, including Assemblyman Harvey Weisenberg, a Democrat of Long Beach. It will first go before the Assembly Education Committee, and then, pending approval, to the Rules Committee, which will decide whether it should be brought to the full Assembly floor for a vote. If the bill passes there, it will move on to the Senate, and then the governor's office.
Given the nature of the issue and the push to reform the way bills are passed in Albany, McDonough said he thinks the legislation has a good chance of becoming law.
