Thiele Grilled Over Tax Cap

Posted on 27 April 2011

walter tice

By Kathryn G. Menu


A town-hall style meeting convened by New York State Assemblyman Fred W. Thiele, Jr. at Rogers Memorial Library in Southampton last week was meant to cover a number of issues including the state budget, the MTA payroll tax, the future of Southampton College and the safety of the Millstone Nuclear Power Station.

However, with nearly half the two-dozen people in attendance members of various school boards and administrations, the conversation quickly became focused on a proposed two-percent tax levy cap – a cap that Thiele said will likely be approved in some form this year and that school districts and local governments alike need to begin preparing for.

The proposed cap currently in front of the state legislature has the full support of Governor Andrew Cuomo, who has made it one of his top priorities in his inaugural year. The state senate has already approved it.

The law would cap the amount of money  – not the tax rate, individual tax bills, or spending – that any school district or local government can collect in property taxes at two percent or the rate of inflation, whichever is less.

“Which means this year if you collected $100, all you could collect next year would be $102,” explained Thiele.

School districts and libraries – the two entities affected by the cap which require voter approval for their budgets – can ask voters to override the cap, said Thiele, but would need a 60 percent vote in favor of any spending plan that would increase the tax levy by more than two percent.

If they fail to gain support after two budget votes, they are then limited to a zero-percent increase in the amount of taxes they collect from their district.

On the town or village level, said Thiele, an override can occur if four of five board members approve it.

If adopted the tax levy cap would take effect in 2012.

Thiele said while the assembly is debating the bill, it has a good chance of being approved, in part, because a majority – many from New York City – appear willing to strike a bargain allowing a cap in return for the continuance of rent control in the city.

“There are those of us, including myself, who feel the governor’s proposal needs some work,” said Thiele.

Thiele said he would like to see the cap tied to a provision that state school aid is increased each year based on the rate of increases in personal income and that no new unfunded state mandates on school districts be allowed once the cap is in place. Thiele said he also will look to cap the cost of existing unfunded mandates, with the state having to pick up the bill on anything beyond that cap.

Thiele added he would like to see school districts able to override the vote with a simple majority, or 51 percent.

“To create a situation where 40 percent of the population can veto what the majority wants is absurd,” said Springs School Board President Chris Kelley.

Kelley added he believes the cap is being proposed as an alternative to the state dealing with the teachers’ union.

“Rather than deal with the true costs, you are telling school districts, ‘You deal with it,’” he said.

“Given the undeniable damage the tax cap will have on East End schools and students, how can you support the tax cap,” asked Walter Tice, a former president of the Sag Harbor Board of Education.

Thiele said he would only support a measure that would institute the cap along with the promise of increased state aid and decreased unfunded mandates, and a return to a simple majority override of the cap.

“We already have a system where the majority approves our budgets,” said Sag Harbor School Board member Chris Tice, questioning why the cap is needed at all if a majority of voters can limit the spending of a school district.

“People support education, but they don’t necessarily support the use of property taxes as a way to fund quality education,” said Thiele.

Thiele added the downturn in the economy has only made it worse and he is looking for a way to continue to provide quality education, but to keep property taxes more stable.

“The property tax cap is a blunt instrument,” he allowed.

Thiele said if he “ruled the world” he would prefer a system where the state provides a basic, quality education to all of its school districts with each district responsible for funding anything additional. However, he said, that scenario is not currently on the table.

Chris Tice said one of the concerns she has is the sense amongst the populace, evidenced by the Governor’s own speeches, that the tax cap will not be as painful for school districts because they have large reserves on hand.

She added the school district has worked hard at becoming more efficient, moving its transportation in-house to save money among other initiatives. To say school districts are not being efficient enough is “insulting,” said Tice.

Thiele agreed that any concept of using reserve monies to offset the tax levy is shortsighted and not advisable as it only provides relief for one year, leaving a school district back at square one the next year.

“In Sag Harbor, we don’t have a large reserve,” said Chris Tice. “We look to build between two and four percent as the state recommends.”


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