Cuomo's proposed tax relief puts pressure on schools

Courtesy of Spencer-Van Etten School District
January 15, 2014

Last week during the State of the State address, Governor Cuomo announced a plan to reimburse New Yorkers on their property taxes. But in order for residents to get the tax relief, their local governments must stay under a 2% cap on raising property taxes. The cap is already causing difficulties for some school districts.

The crowd cheered as Governor Cuomo promised to take action against New York’s high property tax.

“The main tax burden in New York State is not the income tax. It is the property tax. And that is the tax that you’ll hear New Yorkers complaining about from one end of this state to the other.”

The Governor said the purpose of the freeze is to help homeowners and to compel local governments to trim their budgets. 

But some educators are not joining in with the applause. Joseph Morgan is the superintendent of the Spencer-Van Etten School District.

“State funding is broken in New York. Education is broken and it needs to be fixed.”

He agrees property taxes are too high but says the Governor’s proposal will increase the pressure on already stressed school budgets.  It pits the voters against the schools.

“I think the funding formula has to change.”

Schools get their funding from property taxes and state aid.  But Albany is spending 5 cents less per dollar on education than it did a decade ago. 

And those cuts have shifted the burden onto local taxpayers, leaving rural districts, like Spencer-Van Etten, with few choices besides asking voters to go over the tax cap.

Morgan says that Cuomo’s plan makes that an even harder sell to the voters.

His district has gotten to the point where they’ve been using the district’s fund balance to keep the school running.

“We’ve done a long term projection of our fund balance and we can’t keep that up for more then a couple more years.”

But during his speech, the Governor made it clear that he’s convinced the property tax burden on New Yorkers is too high.

“So why are our property taxes so high? Because we have too many local governments and we’ve had them for too long.  10,500 local governments.”

In the second part of his proposal, Cuomo called for local governments, including school districts, to consolidate services.

Merging neighboring districts has been viewed as a way to help struggling schools stay solvent. Back in November there was a proposal to combine Spencer-Van Etten with nearby Candor school district.  It was overwhelmingly voted down.

Bruce Fraser heads the Rural Schools Association of New York. He says mergers often fail because one district assumes it will just end up subsidizing the other.

“8 out of 8 districts that have put that before voters this year have turned them down because tax rates are relatively different in their communities.”

Fraser says mergers haven’t proven to actually save districts money and the only way to fully fund schools is to come up with a new system.

“Good funding formulas provide students, regardless of district or zip code, relatively equivalent support for education, similar programs and opportunities. But they also provide relatively equal tax burdens.”

Fraser wasn’t clear on what the new funding formulas would look like.  He says that is a job for state legislators.  Fraser, along with other education advocacy groups, are lobbying the state to restore the 1.6 billion in cuts made in the last ten years.

He said that would diminish the need for local leaders to increase property taxes. And help them stay under the Governor’s 2% tax cap.