By Andrew Hackmack
The New York State Commission on Property Tax Relief is calling for each school district to cap its annual tax levy increase at 4 percent.
The tax levy is the major source of revenue for most school districts in New York state. Gov. Paterson has proposed legislation to implement this cap of 4 percent or 120 percent of the Consumer Price Index - whichever is less.
If a district wants to exceed that cap, the commission suggested a budget should win voter approval by more than just a simple majority. The governor accepted that recommendation, too. His proposal says that if districts want to exceed the cap, 55 percent of voters must approve the budget, and 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 longer afford to ignore the reality that property taxes are driving people and businesses out."
There is one significant difference between the commission's report and the governor's proposal. Suozzi's commission recommended that if a school district sets its budget under the four percent cap, voter approval would not be required. The governor did not accept this idea, wanting to preserve the right of homeowners to vote for their school district budget every year.
Island Park schools Superintendent Dr. Edward Price said he is opposed to a 4 percent cap on the tax levy increase because the state continues to pass along unfunded mandates it expects the school districts to pick up. Without giving school districts the flexibility to increase their tax levy, these mandates could never be met, he said. Island Park's 2008-09 tax levy increase was about 2 percent on a $30.7 million budget. Without funding to meet these mandates, the school district "could end up holding the bag," said Price, who noted that about 50 percent of the increases in a school budget involve state mandates. Price added that he does not want to drive elderly residents on fixed income out of Island Park, nor prevent young families from moving into the community, by opposing a tax levy cap. "But we have to address the problem without hurting the quality of education," he said. Dr. Herb Brown, Oceanside schools superintendent, also expressed concern about a cap. "I think it's a mistake," said Brown. He said if the state were to adopt a tax cap, then it would have to adopt all the recommendations in the 112-page report issued by the State Property Tax Commission, which also suggests eliminating unfunded mandates. He said the proposal would hurt poorer school districts. "It's easier for wealthier school district to override the cap," said Brown, who added that his district was considered mid-level leaning toward upper wealth. "I think we, too, would have a tough time in Oceanside if the cap is adopted," said Brown. Even though Oceanside's tax levy increase for 2008-09 is 2.8 percent on a $122 million budget, the school district could not predict and often could not control what costs it will be faced with next year, said Brown, referring to rising fuel expenses. "Every year is different," he said. If school budget is defeated twice, a district automatically must adopt a contingency spending plan. In that situation, a district is capped in how much it can raise its budget -- usually between 3 and 4 percent. However, that cap is on spending and not on the tax levy.
County Executive 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 individuals based on their income and ability to pay property taxes.
Assemblyman Bob Barra (R-Lynbrook), said he is against the tax cap proposal because homeowners need further relief. He said school districts should have no increases for a few years to let people's salaries "catch-up" to past years of rising taxes.
"We've got to push our schools to be as good with the money," he said, "as they are at educating our kids."
Barra said he acknowledges that school districts will face certain rising costs no matter what and said the state government must do its part every year to bring in a record amount of state aid. He also said for every dollar school districts spend on mandates, the state should match it.
Judy Rattner and Jeff Lipton contributed to this story. Comments about this story? AHackmack@liherald.com or (516) 569-4000 ext. 265.
