Schools gripe about tax cap, but few go past it

May 18, 2014 by

ALBANY – Just 3 percent of school districts in New York plan to seek an override of the property-tax cap at the polls Tuesday, even as educators warn that the cap is crushing programs and services.

Implemented in 2011, the property-tax cap has become increasingly difficult for schools to try to override. This year, Gov. Andrew Cuomo and the Legislature added another enticement: Homeowners in districts that stay under the cap will get a rebate check — essentially a state subsidy to keep taxes flat.

“A reasonable person could infer that is somewhat of a payment to encourage voters to vote down their budget” if the district seeks an override, said Christopher Prill, assistant superintendent at the Dover Union Free district in Dutchess County.

Dover is one of 23 districts in the state seeking an override of the property-tax cap out of nearly 700 school districts, according to the state Education Department. The fiscal year for schools starts July 1.

Districts can seek a 60 percent vote from the public at the polls to override the tax cap. The tax cap this year, because of a lower inflation rate, is 1.46 percent. It’s the first year the cap has been lower than 2 percent — putting an even tighter financial squeeze on schools.

But the lower cap is being partially offset by a $1.1 billion increase in school aid, to nearly $22 billion statewide aid, the most per capita in the country.

“School boards worked diligently to craft budgets that balance the needs of students with their taxpayers’ ability to pay,” said Timothy Kremer, executive director of the state School Boards Association.

Cuomo has touted the cap as a way to tighten the reins on taxes because New York has among the highest property taxes in the nation.

It’s worked: 96 percent of school budgets passed last year on the first vote, and 98 percent of those stayed under the cap.

Of the 27 districts that sought to override the cap last year, only 30 percent were successful. So fewer are trying this year.

And those that are trying may be breaking from conventional wisdom. When the cap was enacted, critics said that only wealthy districts would be amenable to spending more than the tax-cap limit.

But this year, no schools in Westchester or Putnam counties are seeking an override. Most of the districts seeking an override are suburban districts, such as West Irondequoit and Brighton; small, rural districts, such as Long Lake in the Adirondacks; or small cities, like Ithaca.

There are a few wealthy districts, though, going for an override, including districts out in the Hamptons on Long Island.

Lisa Davis, executive director of Westchester Putnam School Boards Association, predicted that no area of the state will be able to abide by the tax cap for long.

“It is inevitable,” she said, “given the fact that there’s no mandate relief, the tax levy cap and this new freeze.”

Schools statewide are proposing an average tax levy increase of 1.98 percent, the lowest in five years, according to state School Boards Association. Spending would increase 2.6 percent compared to 2.9 percent last school year.

But to keep taxes down, districts are using up their reserve funds, the group said, proposing to use about $1.2 billion from their savings.

Schools are grappling with higher pension costs, in particular. School pension costs in New York are set to increase 7.8 percent in the coming school year — the fifth year in a row of rising retirement costs.

In this current school year, pension costs shot up 37 percent.

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via Schools gripe about tax cap, but few go past it.

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