Tuesday, June 03, 2008

First Read: Property Tax Panel Recommends 4% Cap

And That Provides School Property Tax Relief, How?

A cap on school property taxes of 4% annually.

No local vote on the school budget unless the proposed budget increase is greater than 4%.

The "banking" of the difference between the actual budget and the 4% cap, for possible add-on in future years (with the proviso that there be a cap on the cap).

Is this the NYS Commission on Property Tax Relief's idea of giving the taxpayer/homeowner a break?

Where's the "relief" here?

Quite frankly, we don't see anything to be gained by the proposed cap (most school districts on Long Island came in well under a 4% increase this year, anyway), and taking matters out of the hands of the voters certainly doesn't speak much for the much-touted local control.

Wasn't the whole idea of establishing this Commission in the first place to explore ways, and find the means to, LOWER school property taxes?

Has not the Commission simply sat on the ball, time having run out on the clock? Heck, a Hail Mary pass would have at least given us some hope.

To be fair, we've only given the Commission's rather lengthy Report a cursory review, having had little time to digest same in its entirety.

Many of the Commission's premises are valid, and the suggested remedies, reasonable.

This includes the recommendations to get a handle on those pesky mandates, both funded and unfunded, and to evaluate pensions, consider salary caps for superintendents, and the adoption of the recommendations of the NYS Commission on Local Government Efficiency and Competitiveness, all of which impact greatly upon school district costs.

That said, in gleaning the "highlights," we are left to wonder whether the State Legislature wouldn't be exercising prudent judgment in putting a lid on that proposed cap, this in favor of a more strident effort to come up with a way to fund public education other than the local property tax, and to provide something in the way of actual tax relief.

In short, the "reform" here leaves us wanting for more, and the "relief" proferred is but more of the same as suggested in years gone by, only by a different name.
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Summary of the Commission's Preliminary Report:

The Property Tax Cap: The Commission proposes capping annual growth in the
property tax levy at 4 percent or 120 percent of the Consumer Price Index (CPI),
whichever is less. New construction, which results in an increase to the tax levy, may be
added to increase the capped amount. Any levy not used may be “banked,” to be used in
future years at a rate not exceeding 1½ percent of the prior year’s levy. School districts
that do not exceed the cap would no longer be required to submit their budgets for an
annual vote. If a school district wishes to exceed the cap, a positive vote by at least 55
percent of the voters would be required to override the cap. If a school district has
received a 5 percent or greater increase in state aid, 60 percent of the voters would be
required to override the cap. This 5 percent number is not intended to suggest that 5
percent growth in state aid is sufficient for high need districts.

The STAR Circuit Breaker: The Commission recommends that, after a property tax
levy cap is adopted, the State reexamine the STAR program, which provides payments to
school districts with no relation to individual taxpayers’ ability to pay and has failed to
effectively reduce property tax growth. A new STAR circuit breaker, targeted to relieve
the tax burden on individual taxpayers based upon their income and ability to pay, would
be a much more equitable way of reducing an individual’s property tax burden. A levy
cap is necessary to ensure that property tax growth is restrained for all taxpayers,
including businesses. A circuit breaker implemented after a cap has been enacted ensures
that, in addition to limiting property tax growth, individual relief is targeted to people
most in need. The STAR circuit breaker is the only Commission proposal which has a
cost to the State. Recognizing the financial pressure faced by the State, the Commission
recommends redirecting at least $2 billion from the ineffective STAR program to a more
effective circuit breaker.

Changing State Law and Mandate Relief: The Commission recommends that the
State support school districts’ efforts to rein in the costs of salaries, pensions and health
care, as well as general operating and capital expenses by changing state law. There are
three categories of proposed solutions:

I. New Recommendations to address the root causes of high property taxes:
• No new legislative mandates without a complete accounting of the fiscal
impact on local governments, which must include full documentation, local
government input and proposed revenue sources to fund the new mandates.
• No new regulatory mandates from the State Education Department without
a complete accounting of the fiscal impacts on local governments, which must
include full documentation, local government input, and proposed revenue
sources to fund the new mandates.
• Mandate accountability through an annual report from the Office of the
State Comptroller, which should include the cumulative cost to localities of
complying with all new regulatory and legislative mandates.
• Amend the Triborough provision of the Taylor Law to exclude teacher
step and lane increments from continuation until new contracts are
• Centralize and streamline school district reporting.
• Create a Commission task force on other State mandates to research other
reforms between now and the Commission’s final report (December 1, 2008).

II. Adopt twelve recommendations from the Commission on Local
Government Efficiency and Competitiveness (LGEC), including:
• Regional collective bargaining
• Health insurance contributions
• Health benefit trusts
• Non-instructional service consolidation through BOCES
• School district consolidation
• Wicks Law reform
• Procurement reform
• Countywide property tax assessment

III. Recommendations supplemental to the LGEC report:
• Require school districts to report collective bargaining outcomes to the
Governor’s Office of Employee Relations and in their budgets.
• Convene a study to evaluate creating a new Tier 5 pension system.
• Rescind the BOCES district superintendent salary cap.
• Create a BOCES statewide energy program.
• Establish uniform statewide assessing standards.
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Click HERE to read the full Report of the Commission
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From Newsday:

Panel recommends capping school taxes at 4%

A state commission Monday recommended capping at 4 percent annual increases in school property taxes, and requiring the approval of more than half of voters to exceed this spending limit.

In a 113-page report, the Commission on Property Tax Relief urged the State Legislature and Gov. David A. Paterson to adopt the property-tax cap as a means of dampening homeowners' anger at their escalating property tax bills.

The commission said in return for increasing levies by 4 percent or less school districts would no longer be required to submit their budgets for voter approval. Such votes would only occur in districts that want to exceed the cap.

To do so would require approval by at least 55 percent of voters. And if the district received an increase in state aid of 5 percent or more and still wanted to override the 4 percent cap, 60 percent of voters would have to agree.

School districts that don't exceed the cap and increase taxes by less than 4 percent per year would be able to "bank" the percentage between their levy and 4 percent for use in future years.
However, districts could not surpass the previous year's tax increase by more than 1 1/2 percent.

"Our recommendations, if adopted, would control the rate of school tax increases, provide overall property tax relief based upon a homeowner's ability to pay, and amend state law to help manage expense growth for school districts and local governments," said Nassau County Executive Thomas Suozzi, the commission chairman.

"At the same time, we believe that reducing voter anger over school taxes will help redirect New Yorkers' attention toward maintaining and improving educational quality. Additionally, providing greater control over expenses to school districts and other municipalities will help redirect resources where they may most effectively impact educational quality."

The property-tax cap is similar to one instituted in Massachusetts and ardently opposed by school boards, superintendents and the powerful teachers union, New York State United Teachers. Assembly Speaker Sheldon Silver (D- Manhattan) has expressed reservations about a cap, saying improving the quality of instruction must be paramount.

After a property-tax cap is adopted, the commission suggested retooling the STAR rebate program to direct rebate checks to low- and middle-income homeowners. This so-called "circuit breaker" would be tied to residents' ability to pay property taxes. It would cost about $2 billion per year.

The commission also called for limiting new state mandates on localities and adoption of recommendations from another state commission aimed at consolidating some school operations such as purchasing and countywide property tax assessment.

Copyright © 2008, Newsday Inc.

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