Fight Back Friday: Tax Cap

I’m fighting with myself to not type the line that start with “We” and end with “so.”

We knew the tax cap was bad for schools and communities. We knew it back on June 30.

Now districts across the state are finding just how bad it is.

Earlier this week I tweeted a number of comments about the cuts to the Broadalbin-Perth schools. Here’s a link to the Leader-Herald reporting about the program cuts happening to that district in Fulton County.

This is what $2.4 million in cuts to stay within the 2 percent tax cap looks like: Cutting art and music instruction in elementary schools, French as a foreign language offering, upper-level Spanish classes, social workers, and all interscholastic athletics and extracurricular programs. Reducing technology instruction at elementary and middle schools; health instruction at middle school; science, social studies and business electives at high school; career and technical education opportunities for high school students. The district will also revert from full-day to half-day kindergarten. Here’s a link to an open letter the superintendent wrote to the governor about the state of school funding.

It’s not just rural districts facing deep program cuts. The Buffalo News reports that Niagara Falls schools have a $6.8 million budget gap because they want a 0 percent tax increase (following 18 years of no tax increases there). The newspaper reports the district is still deciding its options and notes there are $2.5 million in reserves the district could use. Even if it uses up every cent of its rainy day fund, Niagara Falls could still be looking at 4.3 million in cuts – so almost double the cuts Broadalbin-Perth is considering.

Of course it’s not just the new tax cap. The fact that state aid to education is only going up 2.9 percent because of competitive grants is also an issue. (And if you haven’t signed the petition asking state lawmakers to fix that yet, well here’s a handy link to help you do that.)

Let’s delve a bit deeper into this whole tax cap issue, because perhaps there are ways you can fight it as well. Here’s a link to one of the best explainers I’ve seen inthe media. One very specific point the article makes: it’s specifically the tax levy that is capped at 2 percent. That might make a difference in your community as your “cap” might be higher than 2 percent. Here’s a link to the Syracuse Post-Standard’s more recent explainer and specifics on some central New York caps.

Here’s the formula I got from the office of state comptroller and State Education Department on how to compute a school district property tax levy cap.  Man, I hope I translate it to you all right. If not, I’m sure you’ll let me know.

  • Multiply the prior year tax levy to the tax base growth factor, (if any)
  • Add payments in lieu of taxes (PILOTs) receivable during prior year
  • Subtract taxes levied for exemptions during prior year (not ERS & TRS) to get the Adjusted Prior Year Tax Levy
  • Once you have that figure, multiply that by what is known as the “allowable levy growth factor” which is either the Consumer Price Index or 2 percent. Subtract those payments in lieu of taxes (PILOTs) receivable in the coming year and you have the tax levy limit.
  • In future years, you could add any carryover. What that means is let’s say a district’s tax levy under that formula was 3.74 percent. But the district fears only a 2 percent budget will pass so it only adopts a 2 percent budget. That means the district would have 1.74 percent carryover for the next year.

Is it confusing? Yes.

Things will be made much clearer after March 1. That’s the deadline for districts to provide their figures to the state Office of the Comptroller and the State Education Department. Those offices will provide districts with their tax levy cap number. We will seek all those numbers and make them public. (I will do a new post and link to the site when that happens.)

What can you do about it in the meantime?

  • Call your school board members. Do they know what their true tax levy cap is? Would they consider going up to the true tax levy cap?
  • Educate your members, parents in your district and all your allies about what this tax levy cap really means to the district.
  • Consider an override. This is a brave step because if 60 percent of the voters in the district do not support a budget that goes over that tax levy limit, then the budget increase is 0.
  • Get out the yes vote. The higher percentage yes votes you can get on this year’s budget may help convince your school board to try to override the tax levy cap in the future.

We’ll keep bringing you more details. You keep fighting.

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15 Comments

  1. Phil Cleary February 24, 2012 at 6:46 pm #

    Let’s not forget that the Gov’s budget adds cost increases for 4410 students (preschool children with disabilities) to local school districts. Nice guy huh?

  2. Amy February 25, 2012 at 10:45 am #

    Or the new implementation of APPR or Core curriculum which will cost districts $$$$$$$$$

  3. Sarah February 25, 2012 at 11:40 am #

    Let’s also allow for districts to fork over some funds to charter schools which are a blight on our society.

  4. Mike February 27, 2012 at 4:41 pm #

    Id like to see what NYSUT is doing about helping out by reducing the very generous benefits that the adults get working in these school systems. Maybe just a few percent decrease in raises or chipping in for a little more of their health care might help. That stuff never seems to be on the table though – Its always raise taxes or the kids suffer. Does anyone else see an issue with this? Property owners are already burdened to the HILT with massive taxes. They are the highest in the country. When is enough enough? These budgets have been bloated for years and years and now a fairly basic cap is in place and its causing quite a ruckuss. People cant afford anymore taxes. Most New Yorkers support tax caps and tax reductions.

    Why is this so hard for the school “leaders” to understand? Let them make concessions and cuts instead of the taxpaying public. We cant take it anymore.

    • Betsy Sandberg February 27, 2012 at 8:31 pm #

      Mike thanks for your comment.
      There are numerous instances of union members sharing in the sacrifice and the pain over the past few years and even recently here’s a link http://www.troyrecord.com/articles/2012/02/23/news/doc4f459c079909a933770242.txt to Watervliet union renegotiating so district saves $4 million.
      Also, it goes without saying that the taxpaying public includes the public workers.

      • T. Payne February 29, 2012 at 12:33 pm #

        I checked your link. Look at the last paragraph to see why the public is angry:

        “Watervliet teachers will receive raises in each year of the pact, 3 percent in each of the first two years, 2.5 percent in the third and fourth years and 2 percent in the final year. These raises are exclusive of step increments that are guaranteed by state law. Coach, advisor and club stipends will be frozen for the first year of the contract.”

        Raises EVERY year? Plus “step” increases, which we view as raises in disguise and a modest change to the health plan? Do you seriously view this as “sacrifice”? This, in my opinion, is why you have a public relations issue and are perceived as just not getting it. People who haven’t see raises in years or at most 1-2% per year, don’t have any pension and pay way more for less health insurance don’t understand why you can’t survive with a 2% tax cap reflecting our reality.

        Yes, public workers pay taxes, but at least you get something from them.

        Something tells me you’ll delete this comment as before, but I again try to engage in dialogue and discussion to test my thought process—and yours.

        • Betsy Sandberg March 1, 2012 at 12:19 pm #

          T. Payne,
          I try to keep up with approving comments, but I was covering the Small City and Rural Advocacy Day yesterday and then had to contend with the snowstorm.

          • T. Payne March 1, 2012 at 3:46 pm #

            I thank you for the courtesy of allowing a different point of view. I welcome discussion on these issues and posted not to be a “troll”, but to show how any why others think in ways your members may not understand. One of my other attempted posts was deleted, which is why I commented.

    • Colleen February 28, 2012 at 4:12 pm #

      OK Mike, let’s review these “very generous benefits” and the “bloated budgets.” The teachers working in these school systems have attended (and paid for) 6 years of a college education. When they are first hired, they probably barely make enough to get by and pay college loans. Many have second and third jobs to keep up. Once they remain teaching for 10 to 20 or more years, they are still far below others in different careers who have required a Masters Degree. I actually make less than my husband, who works a job that simply requires a high school diploma (FREE!!) His health care benefits are superior to mine as well. No, teachers do not enter the field to get rich!

      The budgets are so lean that I have watched colleagues retire year to year, and no one is hired to replace them. This results in classes being cut in the high school, and class sizes growing in our elementary school. Can you imagine the over 20 first graders in one classroom as we have? Our teachers have given the district back money to try and help. I reach into my pocket to provide school supplies, classroom furnishings, and so many of the things that private sector workers get from “the company.”

      About one thing you are correct, no one wants to pay more taxes. Sure, EVERYONE is for tax cuts; it means more money for themselves. But we live in the US with compulsory education. That education costs money. Money that also comes from me and other school employees. We are not the rich lining our pockets while tax payers go hungry, we are the ones working hard and paying too– to try and get by.

  5. Susanne February 29, 2012 at 7:15 pm #

    Mike, I think it’s important to get your facts straight. You would be hard pressed to find a district in which the union members have not agreed to concessions. As a teacher in a district that has given back in prior years, and is being asked to give again, I think I can speak with some authority on the issue. We gave up our raises, which were minimal to begin with. We agreed to increases in what we pay for our healthcare. I’m not saying that we shouldn’t try to help when the community is in need, but it Is very important to remember that public education is not “free”. You do get what you pay for, and if people aren’t willing to pay for it, then the system will suffer. It’s not a threat, it’s a fact. I also live here and am burdened by taxes. I have children in school. I certainly don’t want them to suffer, but I also don’t expect them to get an education on the backs of the teachers in my district. If I want my children to have a quality education, I am fully aware that it will cost me.

  6. Mike March 1, 2012 at 2:10 pm #

    Susanne and Colleen – I dont think the major problem is at the actual teaching level when it comes to the complaints. Its stuff like knowing there are 3-4 VPs in some high schools. Knowing that ther are plenty of other “hands-off admin” positions that arent teaching anybody anything. Alls they appear to do is rake in giant salaries and probably attend a lot of meetings all day. Great. In other words, planty of waste and bloat. Just look around – you gals probably see it first hand.

    And, education/college costs, while certainly burdensome were well known in advance by anyone getting into the field. None of that should be a surprise. Strating salaries are probably low by MS degree standards but they go nowhere but up. Plus, lets face it, there is quite a bit of extra time off that noone else gets. I know there is some evening work here and there but it must be considered a benefit to have extra time off. If this is factored into hourly pay, the pay does go up a bit. Not saying you dont put some extra “off” hours in…just pointing out the difference between the school schedule versus the standard private workers schedule.

    As for education costing money – I think everyone in any community sees that as a fact. However, lets be honest here: NYS is the highest taxed state on the planet. Our yearly per-pupil costs rival that of some private colleges. We already tallked about lots of bloat in the system . That eats up education dollars that should be getting to classrooms but it doesnt. It ends up(untaxed I might add) as a pretty lucrative pension and health care package for someone long out of the system by now. It also hurts YOU since they dont replace lost teachers since the retirees cost so much. People expect to pay some taxes but NY has the dubious distinction of being the highest and most onerous. Do you find that acceptable? Is that a good way to promote business in the area which expands the tax base? I would say no. This just isnt working… we keep paying and paying…and they want more. Young people leave this state all the time…not a good thing, IMO.

    • Betsy Sandberg March 1, 2012 at 4:56 pm #

      Mike,
      Sorry you feel this way. And I apologize in advance if this reply comes across as cranky. Is anybody else out there tired of the finger pointing at who makes what salary and what do they do to earn it?
      “some” evening work? how about almost every evening and several hours on weekends? My teaching friends can never go cross-country skiing with me because they have lesson plans to prep and papers to grade.
      Also, check your facts. Pensions are taxed on the federal level and not all retirees get health care packages.

      • Mike March 1, 2012 at 5:27 pm #

        Betsy – No issue on the reply, feel free to be cranky! :)

        Seriously, the reason people care so much is because the salaries and pensions are paid for by property owners, not some privately held company. Therein lies the “rub”. Thats why people care. The tax burden, which you also pay, is driven by these costs. When it starts to get high, which they are very much so in NYS, its only natural for people to say “hey, wait a second…”. Especially when the private sector hasnt been doing too well lately. Public sector jobs arent affected by bad business conditions or competition like private ones are. Thats another difference.

        There has to be a happy-medium where the taxes are reasonable enough for people to pay them and the school staff can earn a decent living. It just seems out of balance a bit at this point. Its those pesky taxes. They really hurt people and drive business out of the state. That means less people to fund schools, less workers, less taxes and eventually less schools. None of us win then, do we?

        Pensions are taxed at the federal level but not at the state level.

        • Betsy Sandberg March 1, 2012 at 5:42 pm #

          I live in Schenectady where General Electric started. They paid $0 in taxes last year. This was widely reported.
          There are a number of folks who have “won.” Taxes for the working and middle class have increased steadily, at the same rate as taxes for the rich, and corporations and hedge funds have decreased. Charter school operators are making large salaries with little accountability.

  7. Belastingschijven October 29, 2012 at 11:48 pm #

    Hi Betsy Sandberg, thanks for maintaining an interactive blog. Even though I am from netherlands, I found some interesting discussions in your blog about tax deductions. Taxation discussion are always intense and a bit emotional too.

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