Representatives from New York State school boards, superintendents and teachers warned state senators that public education would be undermined unless school districts get relief from unfunded mandates before enacting a cap on local property taxes.
They were witnesses invited to address a hearing, “The True Path to Reducing New York’s Real Property Tax Burden: Mandate Relief and Tax Caps,” co-hosted by state Sen. John Flanagan, chair of the Senate Standing Committee on Education, and state Sen. Jack M. Martins, chair of the Standing Committee on Local Government, held at the Nassau County Executive Building in Mineola, Thursday, Feb. 17.
The two senators were joined by as many as five Senate colleagues (including three Democrats) plus an aide to Senate Majority Leader Dean Skelos – but only the two senators and the Skelos aide were on hand in the afternoon to hear the testimony from the school representatives.
The stated aim of the hearing was “protecting the quality of education throughout New York State.”
In fact, the question that should be raised is why a tax cap would be needed at all, if the state gives relief from unfunded mandates.
But the senators seemed to be uninterested in anything but imposing the new mandate of a tax cap first, then looking for ways to mitigate the impact of unfunded mandates.
No school district, not even Great Neck, would be immune to savage cuts under that regimen.
The witnesses said that capping school district revenues to 2 percent increases or the CPI (whichever is less) was a mathematical impossibility, given the trend in mandated increases in the three biggest areas: pension contributions, health insurance and special education.
These three categories are local government’s equivalent of the federal government’s quandary over Social Security, Medicare and Medicaid.
By while these issues are complex and entrenched, the education advocates instead offered a list of ways to significantly and immediately reduce the local property tax burden – the “low hanging fruit” of property-tax relief.
Great Neck Public Schools Superintendent Tom Dolan, who noted that unfunded mandates took up 13 percent of his district’s budget, even provided a list of an even dozen that could be put into effect almost immediately, without adversely impacting students.
There is wide agreement, for example, for the state to repeal the Wicks Law, something that school districts have sought for years. Wicks Law adds about 30 percent to the cost of every major capital project. Eliminating it would not just relieve a significant cost burden on districts, but would help unleash pent-up demand for new construction that could benefit the Long Island economy.
And what about new building? Aging school buildings are hazardous to teachers’ and students’ health and also waste a fortune in energy. Schools spend about $1 billion in energy costs – saving even 25 percent of that, through installing solar panels, motion detectors, better insulation, and so forth would make healthier, more efficient environments, reduce costly absenteeism and save money on utilities.
Ah, but this is the era of breaking down, not building up.
More difficult, perhaps, but widely supported by most of the speakers during the day was repealing the Triborough Amendment to the Taylor Law, a 1982 law which allows an expired labor contract to continue with automatic step increases, until a new contract is agreed upon, which, they say, provides a disincentive for public unions to negotiate.
New York, which still has a Democratic governor, is not going the way of Wisconsin, Ohio and other Republican strongholds that have targeted public unions in order to weaken their political clout. This proposal is aimed at leveling the playing field.
On pension reform, the representatives for the schools urged a change that exempts public employees from paying into the pension program after 10 years.
Mineola Schools Superintendent Michael Nagler said that if this provision were overturned, $900,000 of the $1 million increase in Mineola district’s mandated contribution to pension fund would be paid for, and the district would only have to find $100,000 more, “a manageable amount” he said.
Speakers, though, pointed to entrenched, structural reasons why the cost of funding public schools – which account for 60 to 65 percent of local property tax bills – rises every year, and particularly on Long Island, which is routinely shortchanged on state aid.
“Long Islanders are asked to carry an extraordinary and unfair local tax property tax burden,” Lorraine Deller, executive director of the Nassau-Suffolk School Boards Association, reminded the senators.
New York State, she said, ranks among the lowest in the nation in percentage of state share of funding public education – countering Gov. Cuomo’s claim that New York State spends the most on education but still ranks in the bottom third in outcomes, the disparity being in the numbers of students in the state. But even with this low share of state aid, Long Island doesn’t get a fair share.
This year, Long Island’s state aid as a share of expenses may sink to an historic low, dropping from 32.2 percent in 1989-90 to a projected 21.0 percent in 2011-12. There are but a handful of Long Island school districts that have regained the percentage of expense aid they received in 1989-90. Over this 21-year span, property taxes and budget cuts, along with a brief infusion of federal funding, have backfilled that drop in state support.
Long Island is also discriminated against because of the Regents’ Foundation Aid formula, which will add $1 billion to needy districts while taking away 60 percent of the so-called High Tax allocation to wealthy districts, reducing that funding from $200 million to $80 million.
Former Nassau County Executive Tom Suozzi lobbied Albany to get our fair share until he became more interested in waging a war on local governments and instituting a property tax cap.
In fact, for the past three years, most school districts have struggled to keep budgets within a hypothetical property tax cap.
“Mineola is excellent example of achieving self-imposed 2 percent tax cap – but even through these efforts, we would not be able to reach 2% cap without cutting programs,” Nagler noted.
But while local governments – villages, towns, counties and cities – have ways to raise revenue through imposing fees, violations, licenses, permits and sales tax (which accounts for 40 percent of Nassau County’s revenue) to compensate for a cap on property taxes, public schools are entirely dependent on property taxes and state and federal aid.
While Long Island gets 21 percent of its school budget from the state, Great Neck gets less than 4 percent, and must raise 95 percent of its school budget from property taxes, that’s why a property tax cap would be even more devastating than cuts in state aid. But the state’s law purposely does not take into account differences in districts – it’s designed to be a “blunt instrument.”
Deller challenged the property tax cap, saying that it was incompatible with the goal that the senators claimed, of protecting the quality of public education.
But she also challenged the Senators to consider the impact on the regional economy if school districts are forced to lay off workers.
“School districts comprise one of the largest industries on Long island. They represent 9.2 percent of Long Island’s Gross Regional product. School districts employ approximately 78,000 persons. The ripple effect in spending in the local economy from these workers’ salaries is a reported $17 billion. In turn, these public sector jobs support an additional 53,000 jobs.
“In Year 1, the Cuomo/Senate tax cap, coupled with stagnant revenues, could easily result in the elimination of 3,000 jobs and an indirect loss of an additional 2,600 support jobs.
“School workers and related additional jobs pay federal and state taxes of $5.7 billion. Sales taxes paid to both counties in 2009 were $345.9 million.
“It does not take an economist to comprehend the negative impact massive reductions in employment will have on local businesses, real property values, sales and income tax revenues and the still fragile Long Island economy,” Deller said.
She also challenged the property tax cap and declared the requirement for a super majority to override it “undemocratic”.
“The right of a community to determine its educational priorities through its locally elected board of education must be respected” Deller said.
“In imposing its super-majority requirement, the Cuomo/Senate tax cap would wrest local decision making from the community’s voters and turn it over to minority dissidents.
In a slap at democracy and in direct contradiction to the spirit of the Voting Rights Act, the Cuomo/Senate tax cap would assign greater or lesser value to each individual’s vote. A supporter of increasing school support beyond the state’s imposed limit would be assigned a vote worth two-thirds. An opponent of increasing school support would be assigned a vote worth full-value.”
“When pollsters measure support for a cap on property taxes, it should come as no surprise that a majority voice support,” Deller said. “However, when asked whether caps should result in cuts to education, the tide turns.
Last May, Long Islanders took part in the most official of polls – the annual school budget vote. May 2010 saw an increase in voter turnout of nearly 5,000. The options put before them were clear. They were provided with the ability to turn down their school budgets and opt for what was the equivalent of the current Cuomo/Senate Tax Cap – 120 percent of the CPI, which last year was zero. Voters faced the reality of your tax cap and rejected it overwhelmingly.
But Senator Martins did not seem moved.
“We all are well aware of current fiscal state- multi-billion deficit,” he said. “Here on Long Island, we are grossly and unfairly taxed, property taxes among the highest in the country.
He also said he was unconvinced that cuts to school budgets would impact educational outcomes.
“Money is not the sole barometer of success in the educational system. Certainly at some point we reach a plateau where not just adding money into system, but have to evaluate how we are spending money,” Martins added, using the rhetoric of the Heritage Foundation and other right-wing groups.
Karen Rubin
