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Jan 18, 2011 4:41 PMPublication: The East Hampton Press

School Districts Worried About State Property Tax Cap

Jan 18, 2011 4:41 PM

A statewide cap limiting the amount that school districts and municipalities can collect in property taxes each year has become the centerpiece of newly elected New York State Governor Andrew Cuomo’s agenda.

But the initiative is drawing fierce opposition from local school officials who warn that such a measure could spell dramatic cuts for education next year and beyond.

Sag Harbor, Eastport South Manor and Bridgehampton school district officials have already stressed that such a cap—which would be set at either 2 percent or the rate of inflation, whichever is lower—could have a devastating impact on their respective budgets, which are now dependent on two primary sources of revenue, property taxes and state aid, the latter of which they also think will be drastically reduced next year. School officials have been sounding off on the issue both before and after Mr. Cuomo’s election to office in November.

The region’s two state representatives, Senator Kenneth P. LaValle and Assemblyman Fred W. Thiele Jr., said this week that they are in favor of the measure that, if adopted, would prohibit school districts, as well as towns and villages, from increasing the amount of money that they can collect annually in property taxes, known as the tax levy, by more than 2 percent any given year. Both said that, as part of that initiative, they would support looking for ways that Albany could help the districts and towns trim costs and consolidate services.

The proposed cap would not mean that an individual’s tax bill would increase at most only 2 percent any given year. Rather, the legislation would limit at 2 percent how much a school district could increase its tax levy per year; for example, a district that collected $50 million from taxpayers in a year could collect only up to an additional $1 million—or 2 percent of $50 million—the following year, assuming that the rate of inflation exceeds 2 percent. If the rate of inflation is only 0.5 percent, school districts and towns would be able to collect only that much more in tax revenue.

The specifics of Gov. Cuomo’s proposal, as well as a timeline for when it could be carried out, are still unclear, but both Mr. LaValle and Mr. Thiele said they’re confident some kind of cap will be enacted before the end of the year. According to press releases posted on his website, Gov. Cuomo is calling for a cap on the property tax levy—the total amount in taxes that towns and school districts can collect to fund their operations.

The governor has publicly stated that he is interested in creating a 2 percent cap. With his proposal, that cap could still be pierced, but only with the endorsement of the local governing board and as long as 60 percent of voters sign off on the plan as part of a referendum. But even then, the cap could be pierced only if a school or municipal board encounters “extraordinary legal or capital expenditures,” according to a press release posted on the governor’s website.

Officials from the governor’s office did not immediately return calls seeking clarification regarding how those boards could legally work around the cap, if it is enacted.

A tax cap would drastically alter the tax landscape of Suffolk County, where residents, on average, pay the 11th-highest tax bills in the country, according to a report that analyzes 2009 tax figures produced by the Tax Foundation, a research group in Washington, D.C. The group identifies New York State as the fourth-highest taxing state in the nation. Those living in Suffolk County pay an average annual tax bill of $7,361, a figure nearly double the median state tax bill of $3,755.

Mr. LaValle pointed out that those figures fail to factor in other financial woes that Albany is weathering, such as the looming $10 billion state deficit caused, in part, by the dismal economy.

“We’re going to have to work as one family in New York to be part of the solution and understand the difficulty in the economy, difficulty that many, many families are having to stay in their homes, pay their taxes and put food on the table,” he said. “This is a very challenging time. And everyone should be treated in a fair and equitable way.”

East End school officials, meanwhile, are worrying about the potential impact of such a measure.

If a 2 percent cap had been in place this year, the Sag Harbor School District would have had to shave about $2.5 million from its $31.5 million 2010-11 budget, according to data produced by the New York State Council of School Superintendents. That’s a number that Superintendent Dr. John Gratto does not take lightly. He explained that such limitations would result in cuts in programs and staffing. A long list of things would have to be placed on the chopping block, he said, ranging from sport teams to the district’s kindergarten program. Numerous teachers would also lose their jobs, he said.

“It’s a noble effort to reduce taxes, but they also have to consider the consequences of doing so,” Dr. Gratto said.

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Tuckahoe's not worried. They wanted to spend 95 grand (would have been more like 200 and god only knows how much they pent already) for on-campus housing
By razza5351 (551), East Hampton on Jan 21, 11 9:56 AM
I have had to survive with a 20% pay cut i think our bloated school districts should be able to survive on a 2% increase. Soon those bloated pensions will be a thing of the past. Time for all the school administrators to sound the warning bell on how it will hurt the childred. Time to consolidate all schools into a county school system, then we can eliminate the excess, but wait that means that all the local power brokers won't be abble to run their fiefdoms into the ground.
By maxwell (169), speonk on Jan 21, 11 3:15 PM
Sounds good to me. The schools and the teacher's union will have to get serious about cost controls.
By goldenrod (505), southampton on Jan 21, 11 8:06 PM
Its funny how Sag Harbor is featured in this article and just signed a contract with the Teachers Union at over 2.5 % not including step increases..."...The base salary increase ranges from 2.5 percent to 2.7 percent during the six years of the contract, which is retroactive to 2007-08, the year the last teachers’ contract expired. Teachers entitled to seniority, or step, increases would see an average additional 2.7 percent...

We can only hope that other local districts...and their ...more
By fredlee (1), Qougue on Jan 21, 11 9:17 PM
I wonder if the insurance companies will cap their rates that they charge the schools?
By SHNative (554), Southampton on Jan 21, 11 9:56 PM
and of course the superintendents are already sounding off about "laying off teachers and eliminating kindergarden classes and student programs" How about cutting administrators and consultants and redirecting that money toward student services.

no, instead they will eliminate kindergarden and lay off good young teachers and continue to collect their bloated salaries, and blame the taxpayers.

ENOUGH- we are all taking pay cuts and/or paying more for insurance etc its time ...more
By CaptainSig (716), Dutch Harbor on Jan 23, 11 7:18 AM
4 members liked this comment
Well said, captain sig. The schools will always look to cut in ways that directly hurt students instead of eliminating wasteful spending on administrative costs. We must fight for quality education in this country. Teachers are not the enemy.
By razza5351 (551), East Hampton on Jan 23, 11 2:26 PM
What a dismal indictment on public education - that a school "will always look to cut in ways that directly hurt students." If I agreed and truly believed that, my kids would go nowhere near public schools. However, I find it to be completely opposite. The teachers AND administrators in my district are searching for INTERNAL ways to cut costs that, while they may inconvenience adults, they protect kids and kids' interests.
By BayFish22 (3), East Quogue on Jan 23, 11 7:06 PM
I agree we should fight for quality education k thru 12. And teachers are not the enemy but teachers unions should be watched very carefully
By joe hampton (3461), south hampton on Jan 24, 11 7:13 PM
In the case of California, limiting property tax rates has resulted in the performance of students in California public schools plummeting from the top ten to 48th among the states (since 1978, the date of the law's enactment).

I'm not saying that the same will happen here. However, it is well to note that in the one state where limitations were enacted, public education suffered greatly.
By highhatsize (4217), East Quogue on Jan 23, 11 9:45 PM
Capping property taxes limits revenues, not spending. Cuomo's proposed caps will hurt schools, especially those in low income districts.
By dagdavid (646), southampton on Jan 24, 11 2:24 PM
highhat size has no idea what he's talking about. Limiting property tax rates had nothing to do with school performance. CA's biggest problem is educating non english speaking students. Over 47 different languages are spoken in CA schools.
By EastEnd68 (888), Westhampton on Jan 24, 11 5:15 PM
1 member liked this comment
I for one am all for higher property taxes for nicer schools for legal residents k thru 12 and the equipment to run them.Its the teachers benefits and pensions that must be monitored as to commensurate with the private sector and what the budget can bear both now and in the future.
By joe hampton (3461), south hampton on Jan 24, 11 7:17 PM
How about just sending the illegal aliens and there kids home and keeping the taxes right where they are! There is a two bedroom apartment right near my house and there are two families living in it. I see that they send 4 kids to elementary school and two more to Jr High and I don't want to leave out the two little ones not in school yet. There is no way that the taxes paid on that apartment come close to covering those children's tuition. This is why the renters paying rent which covers taxes ...more
By ICE (1214), Southampton on Jan 25, 11 12:57 AM
1 member liked this comment
Hey, Ice, try finding a new scapegoat. Is there anything that is not the fault of "illegal aliens"? By the way, they pay the rent that enable landlords to pay the property tax.
By razza5351 (551), East Hampton on Jan 26, 11 10:35 AM
Hate to break this to you, but most of us think that we need to change the "rules".

Citizenship should require ONE native born, or naturalized citizen.

We cannot afford the "poor, tired, huddled masses" any longer...
By Mr. Z (11847), North Sea on Jan 28, 11 10:21 PM
to EastEnd68:

Property tax revenue, the main funding source of elementary and secondary public schools, fell 57% after Prop. 13 in California. To dismiss the causal effect of this phenomenon is to embrace ignorance.

to joe hampton:

In California, expenditures for public education have been cut to the bone in every area EXCEPT teachers' salaries. The same would happen here. There is one special interest group that can be counted on 24/7, generation after generation, ...more
By highhatsize (4217), East Quogue on Jan 24, 11 9:46 PM
Mr. Hat, you go on about what the cops get paid and how it comes from our taxes, yet here you worry about putting a lid on the EXCESSIVE spending the schools are doing. On my tax bill what the SHPD gets is less than 5% of what gore to the school. The bloated administrative ranks must be thinned for starters.
By ICE (1214), Southampton on Jan 25, 11 12:51 AM
to ICE:

Since public school teachers are civil servants, inefficiency is a given. However, we already have the means to limit school spending by voting down school budgets. We don't need a legislative fiat.

It is the effect of a "no" vote that needs to be changed. Currently, if the voters vote "no", an "austerity" budget automatically kicks it that the voters might not want either.

I don't know what other posters experience was in primary and secondary school but, speaking ...more
By highhatsize (4217), East Quogue on Jan 25, 11 12:09 PM
A high property tax will help keep it down to one family per house hold and provide the education a child deserves. Lets focus on cutting the Federal tax. Cut that by 45 % and stop throwing money down a black hole. The time for the fair tax in this country has come. If you don't know what that is folks, Please read up on It for yourself. The property taxes will take care of us locally. And lastly I believe The teachers are out of control they need to be cut back 15%. They also need to put cameras ...more
By joe hampton (3461), south hampton on Jan 25, 11 2:47 AM
It would also help if the teachers in the middle and high schools were forced to communicate with the parents through email and class web sites more. The technology is in the class rooms but many teachers refuse to engage with the parents on a daily basis
By joe hampton (3461), south hampton on Jan 25, 11 2:47 AM
I am tired of having to fight my property tax bill. It goes up every year. I live in Hampton Bays and 73% of my property taxes goes to the HB School District. We are in a tough economy and some hard choices have to be made. Teachers do a valuable job but the system needs to get more in line with corporate in terms of pensions etc. The administrators think there is no end to the well. Well guess what the well is dry. I am going to have to sell my property-if I can..and move to another town like SH ...more
By seashell823 (1), hampton bays on Jan 28, 11 2:09 PM
Found this interesting:

http://realestate.msn.com/slideshow.aspx?cp-documentid=27392629#1
Jan 28, 11 10:21 PM appended by Mr. Z
You know what I really loved about "Avatar"? The fact that it displayed our society, years into the future, as if we didn't change our main behaviors one bit. Like we always have, througout History...
By Mr. Z (11847), North Sea on Jan 28, 11 10:21 PM