ALBANY, N.Y.School budgets appearing on ballots across New York State next week would increase property taxes by twice the projected rate of inflation, a new "School Tax Watch" study by The Public Policy Institute finds.
School tax levies statewide would increase by a total of more than $740 million, or an average of 7.4 percent, according to data school districts submitted to the state Education Department in advance of the May 15 statewide voting day. That figure is some $300 million above the amount that districts would need to keep pace with enrollment and inflation trends.
"By raising property taxes at twice the inflation rate, school districts are effectively taking back millions of dollars that homeowners are entitled to receive under the STAR program," said Daniel B. Walsh, president/CEO of The Business Council.
Under the STAR tax-reduction program Governor Pataki and the Legislature enacted in 1997, school districts reduce each homeowner's property-tax bill by hundreds of dollars, with the specific amount linked to property values in a given community. This year's state budget devotes $700 million in new funding to STAR; the $300 million in above-inflation tax increases proposed by school districts represents the equivalent of 43 percent of that new funding being diverted into higher spending instead of returning to taxpayers. The state Budget Division warned earlier this year: "Although Governor Pataki has accomplished significant reforms to the school budget voting process and substantially improved the disclosure of school budget information to voters, school property tax levies continue to increase at rates well above the rate of inflation. If left unchecked, this spending and taxing growth could erode the property tax relief provided through STAR."
A number of school districts are openly pointing to homeowners' STAR savings as a benefit that reduces the cost of property-tax increases this year. The STAR program, however, was intended to reduce property taxes, rather than just cut the rate of increase. Because business property owners are not eligible for STAR, employers are forced to pay the entire cost of any new school-tax increase.
Residents of some 680 school districts in New York will vote on school budgets and elect school board members on Tuesday, May 15. Districts are required to prepare a Property Tax Report Card showing proposed totals for spending and property tax levies, and the percentage increase in each. The state Education Department publishes the data for all districts on the Internet. The "Big 5" school districts where residents do not vote on school budgets -New York City, Buffalo, Yonkers, Rochester and Syracuse-are not included in the SED data or in the Public Policy Institute study.
The Institute, the research affiliate of The Business Council, analyzed data for more than 600 districts with enrollment of more than 200 students. Among all the districts studied, per-student property tax collections are projected to increase an average 6 percent in the 2001-02 school year. Inflation in New York State is projected at 3.1 percent for calendar year 2001, and 2.5 percent for 2002, according to the state Budget Division.
The proposed property-tax increases come after Governor Pataki and the Legislature have increased state aid to public schools by fully one-third, or $3.4 billion, over four years. This year, the Governor has proposed another major increase, of $382 million. Both houses of the Legislature have proposed still further increases, totaling hundreds of millions of dollars, for the coming school year.
Fully 100 districts are asking voters for permission to raise taxes by double-digit percentages, on a per-student basis, according to the data they submitted to the Education Department.
School taxes make up the largest share of the local property-tax bill for most property owners in New York State, representing 58 percent of total property taxes statewide. New York's property taxes are fourth-highest in the country, at $1,330 per person, according to U.S. Census Bureau data. Public-school spending in New York is also among the highest of any state's, at $9,192 per student in 1999, according to the U.S. Department of Education's National Center for Education Statistics.
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