The New York State Commission on Property Tax Relief, chaired by Nassau County Executive Tom Suozzi, issued its preliminary report and is calling for a cap on the property tax cap levy of school taxes at 4 percent or 120 percent of the Consumer Price Index (CPI), whichever is less.
The commission was formed by then-Governor Eliot Spitzer to take a look at the impact escalating property taxes in New York. Since school taxes make up the bulk of property tax bills, the commission chose to look at how property taxes fund school districts.
Indeed, property taxes in Nassau County and on Long Island have become a major problem for residents seeking to stay in their homes and young families who are looking to make their homes here. "New York State has the highest local taxes of any large state in America - 79 percent above the national average. High property taxes have the most negative impact on low and moderate income working families, seniors on fixed incomes and small business owners who must shoulder this burden regardless of their ability to pay," the commission's preliminary report stated. "New York schools outside of New York City spend more per pupil than any other state in the nation - an estimated $18,768 in 2008-2009."
In order to alleviate some of the burden of high property taxes when it comes to school taxes, the commission proposed the 4 percent tax cap on school tax levy increases. The cap would also do away with school budget votes as long as the proposed tax levy increase of the budget is 4 percent or lower. Districts that want to exceed that cap in a given year must seek voter approval by either a 55 or 60 percent majority.
Some wonder whether a cap would provide tax relief and question the impact it would have on the educational programs in New York State. "Imposing a tax cap while holding out the promise of mandate relief in the future does little to address the reasons behind rising property taxes," said Timothy G. Kremer, executive director of the New York State School Boards Association.
Kremer points out that when more state aid is provided to school districts, boards of education are able to control the increases on the tax levies of their budgets. "In the last two years, when the state provided record amounts of education aid, school boards were able to keep property tax levy increases to a reasonable 3.7 and 3.4 percent, respectively. Voters responded with passage rates of 95 and 93 percent," he said.
During a public hearing held by the commission in March, West Hempstead School Board member Martin Kaye warned of the ramifications of a tax cap. "By capping school spending with no regard to inflationary costs such as health care and heating oil, diesel fuel construction costs and retirement benefits, the pinch is often felt in educational programs where we would have to truncate these programs as well as extra-curricular activities, cut staff and services, and perhaps review an entire special-ed population to see where savings could be made," he testified.
Some Nassau County school boards, already conscious of school taxes, have an eye on tax levy increases when they put school budgets before the voters each May. For residents of the Elmont School District, Sewanhaka Central High School District and West Hempstead School District, the tax levy increases as part of the 2008-2009 budgets were all below 4 percent with Elmont's at 0 percent, the Sewanhaka Central High School District at 2.82 percent and West Hempstead at 0.77 percent. The tax levy increase for the Franklin Square School District was 6.89 percent for the 2008-2009 budget. However, 62 percent of the voters passed that budget.
Another initiative that the commission is recommending is to impose a "STAR Circuit Breaker" as opposed to the present system of STAR programs. The circuit breaker would allow those who have the least ability to pay to receive the most tax relief benefit from the STAR rebate. However, the preliminary report doesn't include what the income would be to trigger the circuit breaker. "The program should be realigned to target those who need it the most," the preliminary report stated.
A final report by the commission will be submitted December 1.
"Now that the report has been issued, New Yorkers will need to scrutinize the impact tax caps could have on less-wealthy school districts and on student performance. Given our current financial condition, I'm concerned about the state's ability to keep up its end of the bargain and continue to increase education funding," said State Comptroller Tom DiNapoli.
Governor David Paterson announced that he is accepting the commission's principle recommendation and plans to introduce legislation on a school property tax cap.