April 22, 2014
The New York state budget includes a plan to encourage local governments and schools to merge and share services, in an attempt to lower property taxes. But according to a study by school administrators, attempts at school district mergers in recent years have failed, partly because the public doesn’t want them.
Governor Cuomo and the legislature recently enacted a multi-year plan that would reward taxpayers in local governments and schools with a tax freeze, if the governments and schools agree to share services and even merge two or more school districts together.
Cuomo’s been giving a series of speeches about the state budget all over the state, touting the plan, and making the case for consolidation.
“It is a plethora of bureaucracy,” Cuomo told an audience of business leaders in New York City recently. The governor maintains that even the two percent per year property tax cap enacted in 2011 has not been enough.
“There’s so many of them that whatever the annual reduction, it winds up being a staggering cost,” Cuomo said.
But the New York Association of School Business Officials, whose members will have to administer the new program, say 30 school districts have tried on their own since 2010 to merge, and have failed. The group’s Michael Borges says there are many barriers, including fears of community loss of identity, and very long bus rides for children in rural districts that want to consolidate.
“There are other issues besides tax rates that are obstacles to merging,” Borges said.
In four of the proposed mergers, the school board of one district decided not to vote on the deal. In seven other cases, the districts took a straw poll and found that voters did not want the consolidation, and in four other proposed mergers, some district residents initially expressed interest, but the mergers ultimately failed at the polls.
Borges says in some cases, the merger would have resulted in the property taxes going down for one school district, but increasing for the other. He says the plan in the new state budget would help with that problem by phasing in any tax changes over a period of years.
The Cuomo Administrations’ Department of Taxation and Finance is holding a webinar to help school administrators comply with the new property tax rebate program. Borges says they will have lots of questions, but he says the program is fundamentally flawed.
“It doesn’t get at the underlying reasons why mergers haven’t happened as frequently as the governor would like,” he said.
He says schools must obey numerous state- mandated regulations on pensions, health care, and transportation requirements that drive up labor and other costs.
“There’s a litany of mandates driven by the state that drive up our expenses,” Borges said. “If they were addressed, we wouldn’t be the highest taxes state in the country.”
Borges says mergers CAN be beneficial to smaller school districts, who are often unable to offer extras to students, like advanced placement courses. And he says the schools who have successfully merged in the last couple of decades have done so partly to enrich the student’s learning experience, not solely because of money and taxes.