GNH Lumber February 2024

EDITORIAL: Phase out the tax cap


FLOOP! BLOBBLE g’vulsch ringadingding kahbluy. There, now you know as much as the rest of us about the process used to fund education in New York State. Actually, not. It’s more complicated than that.

Over the last two weeks Governor Andrew Cuomo has released his annual executive budget. It’s the basis for the final budget that’s supposed to be adopted by April 1. It calls for an increase of $991 million in additional state aid for education, bringing the total state education bill to $24 billion. The Regents say schools need more than twice that increase and there’s some talk in the legislature that funds will be added. But state budgets have won approval on schedule during Mr. Cuomo’s tenure and leaders in the Assembly and state Senate show no inclination to slug it out with the governor in year when all members of the state legislature must run for election.

What matters most to us voters are the district-by-district “school runs.” They’re the computer printouts of the amount state of aid each district would receive based on the governor’s proposal. There’s also a comparison to the current year’s funding. The six districts covering most of Columbia County are shown below:

District              Proposed state aid   % Incr.

Taconic Hills        $11,493,677            1.53%
Germantown       $ 4,953,990             1.40%
Chatham              $ 7,251,995              4.49%
Hudson                 $21,839,651           (-1.04%)
Ichabod Crane      $13,572,969             2.27%
New Lebanon       $ 3,473,744              1.10%

The largest aid category is something called Foundation Aid, which supposedly simplifies funding from the state… except that there are still 15 other aid categories. And state aid is only part of how schools pay the bills. The largest source of support for local districts comes from the school property tax. And that’s where the state tax cap applies.

You know about the “2% tax cap,” which is never really 2%. The state enacted it back in 2011 and it’s supposed to limit increases year-to-year in the total amount of property taxes. The law caps increases at a maximum of 2% or the rate of inflation, whichever is lower. Towns, villages and counties can wiggle out of the cap if 60% of the governing board votes to override it–all it takes is three members of a five-member board. But school boards are required to get a 60% majority of voters to approve any budget that exceeds the cap. School boards seldom dare to ask voters for more than 2%, and rarely win approval when they do.

Certain school district spending is exempt from the cap law, things like capital construction projects and certain contributions to employee pensions. Some years the exemptions and modest inflation has led to school districts with increases above 2% that comply with the tax cap.

Adjustments–okay, loopholes–like these have led to skepticism about the tax cap’s ability to bring down the cost of education. The governor admits as much in his budget message, saying that we still spend more per pupil than any other state in the nation. And this year there’s a looming problem for some districts that will test whether the tax cap as written is too blunt an instrument.

Inflation is so low that the cap on spending will be one-tenth of a percent for the 2016-17 school year, an amount too small to matter. In other words, school districts may face a budget year with no increase other than what the state budget offers. That’s fine for districts that have squirreled away enough reserves to comply with the cap and meet the expectations of students, parents and the community in general. But unless the state is ready to offer much greater levels of aid, districts will not be able to sustain our educational system for long.

The tax cap represents a small part of a numbingly complex school funding system. It has also become a potential flashpoint, where the goals of state and community conflict, and only Albany can restore the balance of power. It’s time the governor proposed gradually relaxing the cap and returning budget flexibility to school districts that have demonstrated their willingness to spend wisely and with restraint to improve public education.

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