Effects of 2% tax cap on New York public school budgets

by Grace

In the wake of New York’s new 2% property tax cap, Lower Hudson Valley taxpayers are learning that “not a single district is likely to seek a cap override when budget votes are held May 15”.  According to school officials, it’s simply too risky to propose a budget that would exceed 2% growth.

Under the new system, districts must keep the increase in their tax levy — the amount of money raised in taxes — below their cap. The “starting” cap for each district is 2 percent, but several exemptions will give most districts slightly higher caps in the 2 percent to 3 percent range.

A new twist is that if a district has two budget proposals rejected by voters, it will have to freeze its property tax levy at this year’s level — requiring deep spending cuts. So if a district goes for an override and does not get a 60 percent super-majority, it will have only one chance to pass a budget under the cap….

“If you try for a super-majority and lose, you only get one more chance and could wind up with a zero (percent tax levy increase),” said Anne Byrne, Nanuet’s school board president.

Taxpayers have no appetite for bigger increases.

It was clear from superintendents’ responses that given the economic climate — and with all the attention heaped on Cuomo’s much-publicized cap — there is a consensus that trying to leapfrog the cap in its first year could be a bad move.

“I have met with our Citizens’ Budget Advisory Committee, held Superintendent’s Coffee Hours, and held a Community Budget Forum, in addition to many internal meetings with administrators, staff and the Board of Education,” Mount Pleasant Superintendent Susan Guiney wrote, “and it appears that while everyone does not wish the school district to endure any reductions in staff or programs, everyone feels that we should respect the tax cap levy and present a budget that complies.”

Is this cap on spending sustainable?

Going forward, many officials said, it will be increasingly difficult to stay under the cap without making staff and program cuts that no one likes.

“It will be next to impossible to continue cutting our budget by these unsustainable amounts,” Putnam Valley Superintendent Barbara Fuchs said.

Schools are working on short-term solutions.

Meanwhile, many districts are pushing legislators to eliminate costly state mandates for transportation, special education and other areas that would produce short-term savings.

But ignoring unsustainable pension cost increases

Meanwhile, they seem to be ignoring the single most costly mandate that is hurting education – skyrocketing pension expenses.  In my local school district, pension costs alone have risen over 50% in the last two years.  Meanwhile, the entire budget has only increased 6%.  Talk about unsustainable.

You can read the entire article below the break.

Schools shy from ‘Russian roulette’ risk of challenging tax cap

Written by Gary Stern, Mar. 4, 2012

If Gov. Andrew Cuomo didn’t want school districts to even think about overriding the state’s new property tax levy cap, it appears that he succeeded.

School districts in the Lower Hudson Valley want nothing to do with the 60 percent “super-majority” public vote that would be required to jump the cap.

A Journal News/LoHud.com survey of superintendents in Westchester, Rockland and Putnam counties who have recently presented or are about to present budget proposals to their school boards — combined with other statements made by school officials — shows that not a single district is likely to seek a cap override when budget votes are held May 15.

“There is too great a risk of a budget going down,” said Jane Sandbank, superintendent of Brewster schools. “I don’t want to play Russian roulette with children’s education.”

Under the new system, districts must keep the increase in their tax levy — the amount of money raised in taxes — below their cap. The “starting” cap for each district is 2 percent, but several exemptions will give most districts slightly higher caps in the 2 percent to 3 percent range.

A new twist is that if a district has two budget proposals rejected by voters, it will have to freeze its property tax levy at this year’s level — requiring deep spending cuts. So if a district goes for an override and does not get a 60 percent super-majority, it will have only one chance to pass a budget under the cap.

Last year, when many districts voluntarily kept their tax levy increase around 2 percent, most garnered more than 60 percent support for their budgets. Statewide, 478 districts out of 678 — 71 percent — got more than 60 percent “yes” votes for their budgets.

In the Lower Hudson Valley, the results were somewhat tighter. Forty-eight out of 53 districts passed their budgets on the first try, with 33 of them — 62 percent — reaching the 60 percent mark.

“If you try for a super-majority and lose, you only get one more chance and could wind up with a zero (percent tax levy increase),” said Anne Byrne, Nanuet’s school board president.

Of the 34 superintendents who responded to the survey, nearly all said they would propose staying within the cap or that their school board was already leaning that way. Districts are in various stages of preparing their 2012-13 budget proposals.

It was clear from superintendents’ responses that given the economic climate — and with all the attention heaped on Cuomo’s much-publicized cap — there is a consensus that trying to leapfrog the cap in its first year could be a bad move.

“I have met with our Citizens’ Budget Advisory Committee, held Superintendent’s Coffee Hours, and held a Community Budget Forum, in addition to many internal meetings with administrators, staff and the Board of Education,” Mount Pleasant Superintendent Susan Guiney wrote, “and it appears that while everyone does not wish the school district to endure any reductions in staff or programs, everyone feels that we should respect the tax cap levy and present a budget that complies.”

Many schools chiefs said their districts will have to cut programs or staff to balance next year’s budgets with their allowable tax levies. Virtually all districts have made similar cuts over the past three years, holding down their overall spending increases despite having to cover growing salaries, benefits, pension costs, utility bills and various mandates required by the state.

Districts also have seen revenue drop due to declining assessments, steep cuts in state aid and the end of stimulus funds.

Many officials reported roughly how much their district may have to cut in spending to stay under their cap: Brewster, $2 million; Carmel, $2.3 million; Eastchester, $1.6 million; Elmsford, $656,000; Lakeland, $1.2 million; Mount Pleasant, $930,000; Pelham, $1.8 million; Port Chester, $2.3 million; Putnam Valley, $1.4 million; Somers, $3 million; South Orangetown, $2.3 million; and Valhalla, $600,000.

Going forward, many officials said, it will be increasingly difficult to stay under the cap without making staff and program cuts that no one likes.

“It will be next to impossible to continue cutting our budget by these unsustainable amounts,” Putnam Valley Superintendent Barbara Fuchs said.

A couple of superintendents said they would, for the sake of comparison, offer their boards alternative budget plans that would require overriding the cap. Carmel Superintendent Jim Ryan said that a budget under the cap would require cutting $2.3 million — or 19.5 staff positions — while a sample “override budget” with a 3.61 percent tax levy hike still would mean cutting 13.5 positions.

Many districts, while staying under their cap this year, may prepare their communities for the possibility of overriding the cap in a year or so, said Lisa Davis, executive director of the Westchester-Putnam School Boards Association.

“We’ll probably see districts talk about what’s on the horizon, that maybe they’ll try for an override in the next few years for certain reasons,” she said.

Meanwhile, many districts are pushing legislators to eliminate costly state mandates for transportation, special education and other areas that would produce short-term savings. Other districts are also lobbying for last-minute increases in state aid.

http://www.lohud.com/article/20120304/NEWS05/303040081/Schools-shy-from-Russian-roulette-risk-challenging-tax-cap

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12 Responses to “Effects of 2% tax cap on New York public school budgets”

  1. Maybe we’ll turn into Massachusetts, which seems to have fared better with their tax cap.

    Like

  2. “Well. we are going to turn into California, where no one I know dares send their kids to the public schools because after years of tax caps, they are simply a disaster.”

    The demographics of California have totally changed over the past 50 years. Even when I was in college in LA in the 90s, people called LA “capital of the 3rd world.” California’s K-12 population is a lot more difficult to educate than in the 1960s, when Southern California was essentially Iowa-on-the-Sea.

    Like

  3. I read some California real estate blogs, and another issue is the price of real estate in good school districts, which is often one million dollars in coastal California. Under the circumstances, it looks like a good deal to buy a much less expensive home and pay for private school.

    Like

  4. California has so many problems, with the schools being just one. Poor fiscal management by government has cities declaring bankruptcy amid businesses fleeing the state. The porous border with Mexico certainly caused its own problems. They needed to put the brake on government spending IMO, but it’s certainly ugly the way it’s happening.

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  5. I always get blown away by the percentage of California high school graduates who need remediation when they begin college–it tends to be in the 90s. 96% of the students at one LA community college need English and math remedial courses.

    http://www.latimes.com/news/local/la-me-colleges-20120221,0,3604326.story

    (Now, some people like Joanna Jacobs make the argument that the remedial classes just bog students down unnecessarily, but I tend to think that they’re needed for a highly cumulative subject like math.)

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  6. Sorry, Joanne Jacobs.

    Like

  7. “Joanna Jacobs make the argument that the remedial classes just bog students down unnecessarily”

    I hadn’t noticed that – I’ll have to read her more closely.

    Like

  8. About pay-to-play, I just learned that many (most?) high school drama clubs are self-sustaining, paying for themselves with ticket sales and ads.

    Like

  9. “I hadn’t noticed that – I’ll have to read her more closely.”

    http://communitycollegespotlight.org/content/colleges-place-too-many-on-remedial-track_8384/

    http://www.educationnews.org/commentaries/155496.html

    On the other hand, my dad teaches remedial community college math, and lots of those students belong exactly where they are, because they have large deficiencies in elementary-level math knowledge.

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