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Tax caps could decimate school districts

Jan 10, 2011 6:20 am
Catskill Superintendent of Schools Kathleen Farrell is quoted in a story about Andrew Cuomo's lightly-proposed property tax cap in today's Daily Freeman saying that if the tax cap is set at 2 percent, as is presently being discussed, school districts will automatically run at a minimum 10 percent deficit.

Her sentiments are matched by other school administrators, as well as most town, city and county officials interviewed, with only a few key Republican state legislators supporting the tax cap measure without considerable qualifications.

The big beef? That school districts and municipalities have no control over retirement and health care benefit costs — fixed costs that Farrell said make up 10 percent of state school budgets. If those costs rise 8 to 12 percent, and tax hikes are capped, “that doesn’t give us a lot of options” other than cutting programs, she added.

Area school districts, the story goes on to report, make up the largest share of property taxes paid by most homeowners, and have already seen their employment rolls cut by more than 250 jobs in the current school year, alongside reduced services and increased class sizes as state aid has shrunk and contractual expenses continued to rise. But even with those cuts and an infusion of federal stimulus money, the property tax levy among 18 local school districts grew by an average of 4.335 percent. Furthermore... the story notes how the weak economy has already led local governments and school districts to begin restructuring their operations, with everywhere from Kinderhook to Hunter-Tannersville starting to talk about school closures and cross-district consolidations for the future. Add the proposed cap on property tax hikes, and school districts across New York face a potential shortfall of $815 million per year over the next four years just to meet personnel costs, according to a recent report by the state School Boards Association.

State legislators, meanwhile, are pointing out that the governors tax cap proposal is still not detailed, and should include mandate relief elements. But that, in turn, has raised concerns about how you work against employees and hard-earned labor benefits enshrined in law, as well as nine state mandates - Medicaid, public assistance/Safety Net, child welfare, preschool special education, indigent defense, probation, youth detention, early intervention and pensions - that will be hard to impossible to dismantle.

For the full story click here...
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