Long Islanders, enjoy your property tax rebate from Governor Andrew Cuomo – it’s blood money, paid for by the slashes and cuts at public schools, cannibalistically eating our young and capping our future.
This year, with the tax cap set at 0.17% (that’s 17/100th of 1%, less than one tenth of the supposed 2% cap), limiting the increase in Great Neck, Long Island schools’ tax levy to $346,000, the school district had to find $3 million in cuts.
The ramifications are that this year, Great Neck schools – now widely considered the envy of public education nationwide – will cut the equivalent of 13.77 full time teaching positions, eliminate before-school enrichment programs and intramurals, early morning drop off-elementary schools and charge for the Academic Intervention Services summer program, among other cuts (future columns will go into greater detail).
But the way the cap works, it makes permanent the reductions because it becomes the threshold to set the following year’s budget. Next year, it is projected the property tax cap will force $7.5 million more in cuts.
This is after year after year of systematic cuts since 2012, each time coming closer and closer into our classrooms.
“It’s untenable,” said Great Neck Public Schools trustee Lawrence Gross, a member of the school board’s finance committee.
The property tax cap is a politically popular idea, but it is the same as paying for a contract killing.
People don’t realize that the formula calls for a maximum 2% increase in property tax revenue or the inflation rate, whichever is lower – not higher. The cap does not take into account increases or changes in enrollment or demographics of the student population – whether there is a shift in the numbers of secondary school students (more expensive to educate than elementary school, which is why for-profit charter schools focus on elementary school), or the numbers of students requiring (mandated) Academic Intervention Services, or the numbers of special needs students or students needing ESL services.
Gross pointed to “the fallacy of the formula,” saying, “what is used to calculate the tax cap does not reflect what causes increases in our costs, so the costs that are going up are not reflected in the formula, but the district must reduce its program in order to live within the cap. We believe it important for government bodies to be frugal and prudent in managing costs, but we are exceptionally opposed to an arbitrary formula which can result in having to cut back on services because of maximum limit imposed beyond actual increasing costs.”
But the way the property tax cap is imposed, it gives strong incentives for the public to demand their municipalities stay under the cap – literally cannibalizing its public schools – and in the case of schools and libraries which are uniquely required to put their budgets to a vote, gives the minority (40%) the power to overturn the will of the majority should a district have to pierce the cap.
For the past 2 years, the state has tied rebate checks as a reward to municipalities which stayed within the cap, each year requiring more and more onerous conditions. The present rebate is only in force if the school district combines with other districts and promises multiple years of reductions.
Instead of an arbitrarily set tax cap – and incentives which make it politically dire to pierce the cap– it should be enough for residents to see precisely how districts are spending money, and have mechanism to participate. That’s what we have had in Great Neck, well before processes were mandated. We elect our neighbors to take up this responsibility – they are the ones who live with the impacts of the budget every day. They practice zero-based budgeting, each year justifying every dollar of allocation or reduction, which we can see during the Budget Review session, held on a Saturday morning (this year’s took place March 19), well publicized on mailings.
We shouldn’t begrudge paying a fair tax – all of us, regardless of whether we still have children in our schools – benefit from a high-quality public school system, and especially those of us who have put one, two, three or more kids through 12 years of school. If we had to pay private school tuition, putting one child through 12 years of school would cost $20,000 a year x 12, or $240,000, multiplied by the number of children.
All of us benefit by good schools – not the least in the value of our homes, but also, ultimately, the priceless reward of our children having the opportunity to fulfill their potential, and what that means for our society. No room to rehash here, but when you consider the number of truly successful people who have come out of our small community of 43,000, it is absolutely remarkable, but not accidental.
The property tax cap should be repealed – it is destructive to public education and local control. It disrespects the community and education professionals, and most of all, it harms our students.
But if it is not politically satisfying to repeal the cap (declare victory and withdraw), at very least, the formula has to be changed:
- Instead of the lesser of 2% or inflation, it should be which is higher.
- It should accommodate increases in enrollment, or changing demographics including the enrollment in secondary schools (more expensive to educate), special needs students, ESL students.
- It should remove from the formula the increases in spending due to mandates, such as mandated contributions to the Teachers Retirement System and health insurance, mandated testing and academic intervention services.
- It should allow a 1-2% cushion to cover unanticipated expenses (such as recovery from Superstorm Sandy or delayed payment by LIPA of its taxes).
Even before there was a mandatory cap, the school district kept its increase to the 2%, and after the mandatory cap, there was at least one year when the budget increase stayed below the cap – a decision for which the board was criticized because it set a lower threshold for the budget that created more challenges the following year. The budget cap perversely discourages school districts (which account for 60-65% of the property taxes we pay) from budgeting only the exact dollar amount it needs, and also to delay year-to-year improvements in favor of a larger bond issue (because debt service is not counted toward the cap).
But the state’s cap isn’t the only squeeze on school budgets. Another is the change in tax structure in the County –the changes in the assessment system.
Which is why the 2% (or less) tax cap is a fiction.
So, over the years, Nassau County has continually been shifting the burden of paying the property tax pie from commercial, utilities and multi-family dwellings (condos, coops), onto single-family property owners. Even if the school budget did not increase a solitary penny, your school taxes would rise 3%.
If the school district did not increase the budget a penny, individual homeowner would still see 3- 3.5% increase in taxes because of shift in the “base proportion” of the assessments away from commercial property owners onto single family residential owners.
Also, about 65% of your neighbors regularly sue for reductions in their assessment, winning “tax certioari.” Guess what – the pie of total property tax that still has to be collected (since unlike income taxes, the schools and special districts put out a budget of what they need to pay for, and your tax rate is your share of that total tax pie). That means that every ones’ taxes go up, even the tax cert winners, though the ones who don’t sue for a reduction pay more (you feel like a chump if you don’t seek a tax cert). It’s an exceptionally non-virtuous cycle.
It is important to recognize that 95% of Great Neck’s school budget is funded through property tax. We get a scant 5% from state and federal aid (compared to NYC and Hempstead which have 50% of their operating budget paid for by state aid). In some ways, that makes us more immune against cuts in state aid. On the other hand, it means that we are more impacted by the restriction of the tax cap – something else the formula does not account for.
When it comes down to it, what people are most upset about government is bureaucracy, its inability to be responsive to “the people”. And yet, that is what the property tax cap does. It replaces the ability of our elected representatives (who serve as volunteers, without any compensation) and our professional administrators and teachers, parents and students to make appropriate decisions for our community in favor of an arbitrary formula.
Repeal or replace the property tax cap.
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