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School officials, legislators weigh in on property tax cap

By Samantha Brix | July 15, 2011 in Education, News

School districts across SunLand had been bracing for it.

Throughout the budget building process, board members continually pointed to a looming property tax cap coming from Albany. Such a cap would further choke school budgets already drained of state aid, they feared.

And alas, the cap has come.

The state Senate and Assembly passed a bill June 24 that caps property tax increases at 2 percent or the rate of inflation, whichever is lower. It also provides a way to appeal for relief from unfunded mandates.

The cap limits school district tax levy increases, but also includes a provision stating a school district can exceed the tax cap if 60 percent of voters choose to exceed it, or if 60 percent of representatives in a local legislature vote as such.

“It’s going to be very, very tough on the budget process to come in under the guise of the 2 percent tax cap,” said Glen Arcuri, director of finance and operations in the Shoreham-Wading River School District.

Mr. Arcuri said a number of district expenses that are out of a school board’s control increase more than 2 percent every year, including health insurance and utility expenses.

“I have to find an alternative to pay for those required expenses,” he said.

An especially cold winter requiring more oil for heat could easily send a utility bill soaring over 2 percent, he said, adding that school districts have no way to control that.

“The concept is going to please homeowners until it directly affects their children,” Mr. Arcuri opined.

But state Assemblyman Dan Losquadro (R-Shoreham) insists a fair amount of expenses are well within a district’s control, and can and must be reigned in.

“We’ve seen a lot of decisions school boards have made that haven’t made economic sense,” he said, noting the Shoreham-Wading River school board’s recent decision to pay its new superintendent $8,750 to start working two weeks before his contract kicks in. “We see examples all the time where decisions are made that are not in the economic interest of the district.”

He said the legislation will also likely force state representatives to address other exploding costs, like pension rates.

“Putting a tax cap in place is going to force the issue,” he said.

The bill includes the formation of a Mandate Relief Council, which is comprised of 11 unpaid members, seven of whom are appointed by the governor, temporary president of the Senate or speaker of the Assembly. Council members can identify mandates to eliminate or reform, with a goal of ridding districts of burdensome and costly mandates.

Longwood schools chief Alan Gerstenlauer said mandate relief hasn’t been quick to come so far.

“There’s been a lot of talk of mandate relief but I haven’t seen anything of substance,” he said.

Dr. Gerstenlauer says the tax cap will be particularly tough on low-wealth districts like Longwood/

“We’ve looked just about everywhere,” he said. “We have tried very, very hard to manage our expenses and it’s becoming more and more difficult with diminishing resources, particularly when it hits both ends of our revenue stream — the state aid end and the tax levy end.”

“And the demands aren’t any less,” he added. “If anything they’re greater than they were in recent years.”

Senator Ken LaValle (R-Port Jefferson), a strong advocate of the tax cap legislation, said school boards will simply have to, like everyone else, manage their budgets and “live within their means.”

“Today people are losing their houses, they’re unemployed, underemployed,” Mr. LaValle said. “I think school boards have to develop budgets that are consistent with people’s ability to pay for those budgets.”

Dr. Gerstenlauer conceded that the bill will moderate the tax burden on homeowners, but just how much, he isn’t sure.

“I don’t know that it’s going to provide as much relief as people think it might,” he said. “I’m hoping it will, but I just don’t see it being the savior that some people are believing it might be.”