Editorial: Time for tax cap in NY

This editorial appeared in the Schenectady Gazette on July 27, 2010 - www.dailygazette.com

One of the things for which Gov. Paterson has called back the Legislature — again — is to pass a local property tax cap for school districts and governments. Such a cap isn’t as significant as a “spending cap,” which is what’s really needed, especially for schools. But it would prevent the locals from sharply raising taxes as the state cuts back on educational and municipal aid, something that it must do, given the huge budget deficits it is facing.

School taxes outside New York City represent the largest chunk of the local tax bill, and not only as a percentage (62 percent). New York spends more than $18,000 per student for public education, more than any other state and 67 percent higher than the national average. Teacher salaries and benefits, 90 percent higher than the national average, account for most of the disparity.

The governor has proposed a fairly modest tax cap, along the lines of what Massachusetts has had for some years — limiting annual increases to the inflation rate or 4 percent, whichever is lower. In certain circumstances taxpayers would be able to “override” the limit if they were willing to pay for a larger increase, or “under-ride” if they believed the district can get by on less.

Even with record state aid increases in the last 10-15 years, school districts didn’t cut their property taxes. In fact, they used the state’s STAR property tax relief program to disguise the real size of the increases and raised them even more, with most of the money going to teacher salaries and benefits, which now cannot be reduced.

A tax cap is the best hope for at least slowing this runaway train, forcing some fi scal discipline and acceptance of economic reality by school boards and teacher unions.

The legislative leaders, beholden to those unions, don’t want it; but Paterson, with his revenue bills, seems to have found a way to get them to consider, if not accept, things they wouldn’t before. In terms of politics and fairness, it would be better if a cap were coupled with some needed mandate relief, such as special ed reforms and eliminating the Triborough Amendment, which takes away school district’s negotiating power by continuing with teachers’ step raises even after a contract has expired.