Posted june 30, 2011
New York State Property Tax Cap Now Official
The New York State Legislature made it official this month in passing Governor Andrew Cuomo's campaign promise to enact a property tax cap on school districts and municipalities. The cap will take effect this coming budget season and affect district planning for the 2012-13 school year.
Adopted by the Legislature at the end of June in a flurry of end-of-session activity, the measure seeks to limit the annual increase in the tax levies of local governments and school districts. The legislation also included a package of items that legislators said was intended to offer districts some “mandate relief,” referring to state laws and regulations that drive up costs — and ultimately taxes.
As South Colonie leaders continue to analyze the new tax cap legislation, Superintendent Jonathan Buhner is projecting that next year will be another difficult budget year for the district. “These are difficult fiscal times for our taxpayers and moving ahead we will continue to focus on balancing the needs of our students with our community’s ability to pay,” Buhner said.
Mandate relief measures
The tax cap legislation was approved with a package of changes intended to help school districts and local governments control costs. These included the creation of a Mandate Relief Council to curb some of the laws and regulations that lead to escalating expenses for school districts and local government. The mandate relief items approved recently that apply to schools include:
This 11-member council will determine if a statute or regulation is unsound, unduly burdensome, or costly; establish procedures for repealing unfunded mandates in both statute and regulation; provide a procedure for direct appeals from school districts and other local governments on mandates; and require the state Comptroller to issue a detailed report on the cost and effect of unfunded mandates.
Student Transportation: The new law allows districts to base bus routes on patterns of ridership instead of having a seat for every potential rider.
Cooperative purchasing: The new law allows school districts greater flexibility in cooperative purchasing with other districts, and state and federal contracts. While this may lead to better deals on some goods and services, South Colonie already does as much competitive/joint purchasing as possible, including through state contracts, Albany County, and with other school districts via BOCES.
This gives districts the ability to finance up to 125 percent of their pension contribution increases incurred during the next three years. This would allow districts to smooth out sharp increases in pension costs from year to year without jeopardizing educational programs.
The new law also allows up to three districts with less than 1,000 students to share a superintendent. This does not apply to South Colonie, given its total enrollment of about 5,100 students.
Energy Purchasing: The new law also authorizes the Office of General Services (OGS) to provide centralized electricity purchases for schools.
Pre-K Census: Districts need only determine the Pre-K census every two years, rather than every year.
Arguments For and Against Tax Caps
The property tax is a major source of funding for public safety, schools, roads, libraries, and other services in most American communities. In recent decades, concern over rising property tax bills has led a number of states to impose some form of limit on the amount of property tax revenue that counties, municipalities, or school districts can collect. Several other states are considering property tax caps as well.
Proponents argue that tight property tax caps will force localities to provide services more cost-effectively, or to eliminate services that are not needed. Opponents contend that caps are more likely to force localities to cut necessary services. As an example they point to California, where education, health care, transportation, and other public services all have declined dramatically since the state adopted a tight property tax cap (Proposition 13) in 1978. California’s school system, formerly one of the best in the country, became one of the worst.
Similarly, some Massachusetts towns have had to lay off school and municipal employees (including fire and police), freeze wages, and close town libraries and senior centers in order to comply with Proposition _2 ½, that state’s severe property tax cap.
Looking ahead
In what was yet another challenging budget development process again this year, the South Colonie Board of Education adopted a proposed 2011-12 district budget in April totaling $91,177,000. The budget represents a 1.99 percent spending increase over the current school year and included $2.3 million in budget reductions and program adjustments.
This included the elimination of 27.43 positions: 6.8 FTE teaching positions, 4.0 FTE administrative positions, 1.0 FTE teaching assistant positions and 15.63 FTE support staff positions (13.63 library and building monitors and 2.0 bus drivers).
Residents approved the 2011-12 budget on May 17th by a vote of 1,548-1,061.
South Colonie is already bracing for another difficult budget planning process for the 2012-13 school year. In addition to the state's new tax cap, the Federal Education Jobs Funds aid, which is a federal grant that totals over $1.1 million, will expire in 2011-12 and state funding for education could again be reduced in the next New York State budget.
“Due to the overall uncertainty related
to the economy and state aid, the District will need to take a
multi-year approach to budgeting,”
Superintendent
Buhner said. “During this recession, and despite losing million
of dollars in state aid, we have worked very hard to keep our
tax rate as low as possible. Going forward in these difficult
economic times, we must continue to be thoughtful about how we
use every resource.”