By Andrew Hackmack
The New York State Commission on Property Tax Relief is calling for school districts to cap their annual tax levy increases at 4 percent.
The tax levy is the major source of revenue for most school districts in New York state.
Paterson has proposed legislation to institute a cap of 4 percent, or 120 percent of the Consumer Price Index - whichever is smaller. If a district wants to exceed that cap, the commission suggested that a budget must be approved by more than just a simple majority. The governor agreed with that recommendation, and his proposal states that in order for a district to exceed the cap, 55 percent of voters must approve its budget. That figure climbs to 60 percent if a district gets a state aid boost of at least 5 percent.
"New York is the highest-taxed state in the nation," Paterson said, "and we can no longer afford to ignore the reality that property taxes are driving people and businesses out."
Dr. Anthony Singe, interim superintendent of Valley Stream District 30, expressed concern about a property tax cap. He said that if the district had been subject to such a cap over the past four years, the current school budget would be about $2.3 million smaller. "Those reductions can't be achieved without impacting the instructional program," Singe said.
In a K-6 district like District 30, reductions of that magnitude would be more difficult to make than in a K-12 district, he explained, because there are fewer programs to cut. Class sizes would almost certainly be higher, he noted.
District 24 Superintendent Dr. Edward Fale cited a tax cap passed by California voters in 1978. "Since that time, the quality of education in California schools has gone down drastically," Fale said. "We don't want to follow that example."
He added that if a cap is approved in New York state, it would put school districts in a very tough spot. Should a district's expenses rise by more than 4 percent, officials would have to either cut programs or pin their hopes on 55 or 60 percent of voters approving a higher increase.
Additionally, such a law would limit a district's ability to create new programs, Fale explained, because the cap would likely be eaten up by the rising costs of existing budget items. "You would be fighting to maintain the programs that you have," he said. "What you're not doing is improving education."
Fale said he also believes a tax cap would favor high-wealth school districts.
One significant difference between the report by Suozzi's commission and the governor's proposal concerns annual school budget votes. The commission recommended that if a school district sets its budget under the 4 percent cap, voter approval would not be required. The governor, in contrast, wants to preserve residents' right to vote on their school budgets every year.
State Sen. Dean Skelos (R-Rockville Centre) agreed with Paterson. "A school budget involves more than the tax rate," Skelos said. "Parents have a right to vote on how school districts are spending their money."
If a school budget is defeated twice, a district must adopt a contingency spending plan. In that situation, a district is restricted in how much it can raise its budget - usually to between 3 and 4 percent. However, that cap is on spending, and not on the tax levy.
Suozzi rejected the notion that contingency spending already acts as a tax cap. "A lot of times we vote against the school budget and the contingency budget is often higher," he said. "It's become a sham process, and often very few people vote."
Suozzi did acknowledge the pressure school districts face as a result of unfunded state and federal mandates. His commission recommended several steps to provide mandate relief, including a provision that would prohibit new education requirements without a thorough review of the financial impact on local governments. "After talking with school districts and taxpayers," he said, "I realized they were struggling with unfunded state mandates."
Another recommendation of the commission and the governor is a School Tax Relief Program (STAR) "circuit breaker." This would provide tax relief to certain people based on their income and their ability to pay property taxes.
Assemblyman Bob Barra (R-Lynbrook) said he is against the tax cap proposal because homeowners need even further relief. He said that school districts should have no increases for a few years to allow people's salaries to "catch up" to past years of rising taxes.
"We've got to push our schools to be as good with the money as they are at educating our kids," Barra said, adding that if a tax cap is approved, he would seek a requirement that a supermajority - 65 percent - of voters approve anything higher than 4 percent.
Barra acknowledged that school districts will face rising costs no matter what, and he said that state government must do its part every year to provide as much state aid as possible. He also said that the state should match every dollar school districts spend on mandates.
Frank Chiachiere, a member of both the Valley Stream Central High School District and District 13 boards of education, said he is glad to see the property tax issue finally being discussed at the state level. However, he does not believe that a tax cap is the solution. "I think the issue is much larger," he said. "We have to look at the whole question of school financing."
Chiachiere said a blue ribbon panel should be formed to review how schools are funded in New York. The panel should consist of lawmakers, Board of Education members, school administrators and citizens, and there needs to be input from Long Island to the Western Tier, he said.
Singe said that property taxes are a problem, but he agreed with Chiachiere that the issue needs to be examined thoroughly. "There are other ways to get property tax relief other than a tax cap," Singe said. "Something so significant needs more time for public discussion before the Legislature acts on it."
Judy Rattner contributed to this story. Comments about it? AHackmack@liherald.com or (516) 569-4000 ext. 265.
