By Clare Walla
As school budget season approaches, an issue that’s come to the surface for school districts across the state of New York is Governor Andrew Cuomo’s proposed two-percent cap on property tax levies. The legislation seems to be gaining momentum in Albany, as it was recently passed by the senate. And while the cap, if passed, would not go into effect until the 2012 school year, it’s already prompted East End school districts to buckle down and prepare for the worst.
To address the issue, Southampton Town Supervisor Anna Throne-Holst organized a discussion on the topic last Friday, February 18, with State Assemblyman Fred Thiele, Jr. and school district officials from across the East End.
“I am convinced there is going to be a tax cap in some way or form this year,” Thiele said. In addition to the fact that the senate overwhelmingly passed the legislation 45 to 17, Thiele said the governor has made the tax cap one of his top priorities.
“My recommendation is not to stand on the sidelines and throw rocks at the cap and hope that it goes away, because it’s not going to,” Thiele added. “There’s going to be a cap.”
The governor’s plan calls for a two-percent cap on property tax levies or the cost of living, whichever is less. (However, according to the proposed legislation, the levy growth factor shall never be less than one.) Such a cap could be overridden if a supermajority of 60 percent of taxpayers in the school district vote to ignore it.
Sag Harbor School Board members Chris Tice and Ed Drohan—who were at last week’s meeting—challenged this component of the legislation.
“That’s discrimination against the people that vote,” Drohan remarked, noting that the Sag Harbor School District has historically been very divided when it comes to the budget, which only passed last year by 50.3 percent of the votes.
“It’s allowing the minority to decide,” he added. “I don’t believe in a supermajority. Period.”
Tice said she was surprised at how Thiele could support a law that would take away the public’s right to decide.
“I’ve never heard of any other public vote that requires 60 percent to pass,” she said. “This is about what citizens want to give, it’s not about taking state money.”
A two-percent tax cap would be cause for alarm for the Sag Harbor School District, which, according to District Business Manager Janet Verneuille, is set to see its fixed costs go up by about five or six percent as it is. In other words, even if the school district keeps expenditures exactly where they are now, costs will rise due to employee pensions, health insurance costs and step salary increases.
“The district’s greatest cost is labor,” Verneuille explained. “You’re probably looking at staffing cuts.”
She continued, “When your labor costs are contractually going up by six percent and health benefits are going up by double digits, it doesn’t add up. Everything’s going to be on the table.”
Thiele mentioned the governor has already offered a few plans to help districts financially over time, one of which allows districts to tap into their reserve funds—something they are currently barred from doing by law. However, as Verneuille put it, “that’s just going to kick the can down the road.” Should Sag Harbor dip into its reserves now—which are already only half of what the state requires—Verneuille said it would only create problems in the future.
According to Thiele, Governor Cuomo would ultimately like to open up discussions regarding mandate relief. One hot topic of debate among school districts has been the Triborough Amendment to the Taylor Law, which mandates schools to pay step increases for teachers in periods when contracts are still under negotiation.
“The governor wants to bring all of the unions back to the table for concessions,” Thiele added.
In this sense, Thiele said this legislation could prove to be a good thing.
“This is a climate in which there’s going to be structural change in the way things are done. Nobody in Albany thinks that we can cut your state aid, cap property taxes and continue business as usual.”
As for Thiele’s presentation, Verneuille said “I do agree on one thing: the environment’s right for change.”
And while mandate relief is necessary, should the tax cap go into effect, Verneuille added that this would only be long-term solutions for a plan that, come 2012, would have immediate effects.
At this point, Verveuille emphasized the need for more open discussions within the community.
“There has not been an open and fair discussion on this,” she said. Tice explained she does not feel the average citizen knows enough about the possible consequences of a two-percent cap. Thiele said polls show the public supports the cap. However, Tice believes the issue hasn’t been adequately presented to the public. If people knew how a two-percent tax cap would affect local school districts, she added, “I do think most citizens would be against the law.”