Regional Task Force on School Property Tax Reform

Organized by Greg Ball NY State Assemblyman

Panelists: Nancy Calhoun, Alice Roker, Ifay Chang and Mark Drexel

Held on Oct. 20, 2007 at Mercy College in Yorktown

 

Introduction

This fall Assemblyman Greg Ball hosted a non-partisan, apolitical, public forum and work session as part of his Regional Task Force on School Property Tax Reform. The event, covering 6 counties, was held at Mercy College in Yorktown NY on October 20th, 2007. Four panelists were invited to respond and listen to issues. Representatives in attendance came from Dutchess, Orange, Westchester, Putnam and Rockland counties, as well as other regions of New York.

 

Background

Property taxes in this region are among the highest in the nation. Action must be taken as a community to address the underlying causes for the ever increasing burden of combined property taxes. It is imperative that the communities work together to confront this pressing issue.

 

The current system is flawed and we must push forward not as a political divided body but as a community united. The single most devastating reality holding any chance for comprehensive reform back is the lack of consensus in Albany, and at home. The objective of this planned series of forum is to reach a general consensus not on the problem, but the solution.

 

Purpose

The goal for this initial forum was to develop a community based solution at the grassroots level for this complex problem, or at the very least begin the dialogue. This “Suburban Initiative” has begun the process that will lead to consensus on an alternative to the regressive property tax model for funding our schools and bring the School Tax Reform debate to produce concrete action items.

 

Agenda

o          Welcome

o          Panelists Remarks

o          Public Comment

o          Unfunded School Mandates

o          Income Tax System

o          Rockland School District Mandate Findings

o          Legislative Initiatives

o          Next Steps

 

 

 

Panelists’ Remarks

o          Greg Ball, Assemblyman

·        Welcome to the Public Form and acknowledge Mercy’s Support

·        State the Purpose and Important Issues to Be Discussed

·        Seek Public Opinion and Reduce to Legislative Action

o          Nancy Calhoun, Assembly Woman

·        The current Albany agenda

·        Past legislative work related to Tax Reform

·        New proposals under consideration

o          Alice Roker, Acting Yorktown Supervisor

·        Residents’ concerns

·        Looking forward to an impartial discussion on issues

o          Dr. Ifay Chang, School Board Member, Somers Central School District

·        Fundamental Principles on Taxation, Attitudes Leading to Taxation Problems, Roots of Over Tax and Tax Burden ( distributed a document at www.mwsearch.com/schooltax)

·        School Tax Issues, Unfunded Mandates, Various Proposed School Tax Models and Citizens’ Concerns

o          Mark Drexel, School Board Member, Yorktown School District

·        Presentation on State Unfunded Mandate (See Below)

·        Issues Related to Tax Burden

·        Encouraging Debates

 

Subjects Addressed during Public Comment

o          After school costs

·        Need of extracurricular activities?

·        Alternate funding model – user fees

·        Cost burden

o          Unfunded legislative and state education department (SED) mandates

·        State wide funding option

·        Eliminate mandates

·        Require state fund mandates >$10,000

·        Income based funding

·        State control may result in increased cost, constraints and loss of local control

·        Effectiveness of rebates (STAR)

·        Unfairness of non property owners lack of contribution to funding

o          Cap on School Budget Increase

·        Massachusetts Model and Super Majority Power of Override

·        Feasibility in New York

o          Special education program costs

·        Benchmark Florida’s 100% reimbursement of education costs

·        Cap special education costs

 

 

o          Locked box lottery

·        Revamp process that funnels lottery funds into general fund

·        Administrative costs excessive

o          Transportation costs

·        State wide contract

o          Consolidation of services

·        Explore opportunities

o          Funding mechanism options

·        Funding incentive to classify special education students

·        Require business official to be elected

·        Encourage more state reimbursement

o          Current Bill on the Floor

 

 

Unfunded School Mandates

State mandates comprise a major influence on school budgets. The average school budget increase in Westchester County has been 7.97%. While in Putnam County, the average school budget increase has been higher at 8.25%. Unfunded mandates can account for as much as 5% of the average increase. Without the mandates, the average increase in school budget would be under 3% in Westchester and approximately 3.25% in Putnam. Possible avenues to accomplish mandates relief are:

o                   Requiring any bill that enacts or amends any expenditures or appropriations shall state the estimated cost.

o                   Requiring that any state mandated program imposed on school districts, be funded by the state.

o                   Reviewing all existing non curriculum mandates to determine financial impact and educational benefit to determine the need to continue the mandate.

o                   Requiring all future mandates be optional unless approved by the State Legislature and signed by the Governor.

 

Alternative Tax System Proposals

The property tax, used to raise school revenue, is egregiously unfair because it is not based on the ability to pay. The options are an income based system or a sales tax based system.  The former would eliminate the property tax and replace it with a percent surtax on the federal adjust gross income of New York State taxpayers. The latter suggests funding through sales tax. Both require further discussions.

 

 

 

 

 

 

Rockland School District Mandate Findings

The cost to taxpayers of unfunded mandates, non-reimbursed, but required programs and required increases in pension fund contributions for Rockland County totals $170,272,398 or 27.5% of taxpayer portion of the county’s public school budget. Big ticket items deserve more attention and legislative action.

 

Items for further legislative action

  1. Obtain the costs associated with after school activities including transportation
  2. Explore the option of the locally levying taxes based on income tax.
  3. Explore how commercial property would be handled under an income tax based system.
  4. Obtain state funding figures based on the average cost per student.
  5. Commission a comparison study of a property tax system versus an income tax system.
  6. Obtain figures for the amount the state collects in school tax levy.
  7.  Obtain cost figures for contracted bus transportation versus a district owned fleet.
  8. Explore the approach of using the inflation rate as a benchmark for tax increase limits.