Cuomo: School Tax Cap Working Better Than Expected

12:14 AM, May 5, 2012   |    comments
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New York Governor Andrew Cuomo

Albany Bureau Chief

ALBANY - Nearly 92 percent of schools are proposing budgets at or below the new property-tax cap, and Gov. Andrew Cuomo couldn't be more pleased.

Cuomo said the cap is producing better results than he imagined. He made controlling property taxes a top issue when he took office in January 2011 because New York has among the highest taxes in the nation.

"It's great," Cuomo said in an interview Thursday in his office. "It's worked better than I would have hoped."

But school districts say the tax cap is forcing them to lay off teachers and cut programs. They said the tax cap comes after schools dealt with several years of either frozen aid or cuts.

This year, schools are getting a 4 percent increase in state aid, or about $805 million more. The state's teachers union says the increase is still about $1.1 billion less than schools received in the 2008-09 fiscal year.

"This year, the cap is being used as hammer to force school districts to increase class sizes, lay off teachers, slash programs -- or all three," said Carl Korn, spokesman for the New York State United Teachers union. "Students -- and educational quality -- are suffering, and many parents are already questioning whether the tax cap is worth it."

School-budget votes across the state will take place on May 15. The state's largest city schools don't hold budget votes.

Records from the state Education Department show that only 51 of 669 school districts plan to ask voters to override their tax-cap limit. A 60 percent vote is required to exceed the cap.

Cuomo and state lawmakers last year adopted a tax cap that limits the growth in property taxes to 2 percent a year. But some costs were exempted -- such as spikes in pension expenses -- that gave districts on average a 3 percent tax-cap limit.

The average proposed tax levy increase is 2.2 percent, state data show.

Cuomo said school aid, coupled with tax increases, is growing more than the rate of inflation, which is about 2 percent.

The tax cap has been knocked by schools and local governments, which had to live under the cap starting in January. About 80 percent of local governments came in under the tax cap in January, according to the state Comptroller's Office.

Cuomo said the cap has started a dialogue about taxes and has held local officials more accountable. If they want to override the cap, they still can, but they need voter approval for school budgets, he said. Sixty percent of a local governing board can override the cap for a municipality.

"This is all common sense here. You don't need a fancy calculator to figure this out," Cuomo said. "You can't spend more money than you have."

The average spending increase proposed by schools is 1.7 percent, the state Education Department data show. It was a 1.3 percent spending increase last year.

Last year, though, the average increase in the tax levy was 3.4 percent. The six-year average tax levy increase was 4.2 percent, according to the state School Boards Association.

"School boards worked hard to comply with the cap and respond to continued economic hardships in their communities," said Timothy Kremer, the association's executive director, in a statement April 27.

Westchester County has ranked first in the nation in property taxes paid. Upstate counties, such as Monroe, pay among the highest property taxes compared to home values, according to the Tax Foundation, a fiscally conservative Washington D.C.-based group.

Cuomo has made education reform a top priority, often pitting him against powerful teachers' unions. He got lawmakers and unions to agree to a new teacher evaluation program in February; on Monday, he created an education reform panel that will look to overhaul the system.

"That's what the people of the state asked me to do in my election," said Cuomo, who was elected in 2010. "It's probably the single most important issue, or one of the two most important issues, to households all throughout this state. It's about our children, and it's not working nearly as well as it should be."

Cuomo said he's not anti-teacher or anti-school, mentioning that his mother, Matilda, the state's former first lady, was a teacher.

"I believe in teachers. I think it's a great profession. I honor the people who dedicate themselves to it," Cuomo said. "That has nothing to do with the system and the economics that they are employed in."

Whether schools will be able to permanently sustain tax levies under the cap is uncertain, said Brian Sampson, executive director of Unshackle Upstate, a Rochester-based business group that lobbied for the tax cap.

He said state officials need to address the unfunded mandates -- such as growing health-care costs -- that are putting pressure on schools to raise revenue to offset higher costs.

Schools, Sampson said, dipped into reserves and made cuts this year, but that may not be sustainable.

"Without mandate relief, schools will be faced with one or two choices: Go well above the cap or start slashing or burning programs and teachers," Sampson said. "And as we all know when it comes to our schools, slashing and burning programs and teachers is unacceptable."

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