New York should base school aid on sales and income taxes
We have just completed the dreaded season of school budgets and raising school taxes. This year nearly all local school budgets were passed — one exception being Niskayuna, which wanted too large a tax increase.
But even the budgets that passed were lose-lose situations. School boards, in order to minimize taxes, had to reduce programs and cut staff. Taxpayers lost by having to pay more, the schoolchildren lost programs for their education and some teachers lost their jobs.
These local consequences are largely the result of a state budget that decreased school aid in order to minimize its own expenses and hold the line on state taxes, thereby forcing localities to raise their taxes. Gov. Cuomo likes to say he produced a balanced budget without raising taxes. But who is he kidding? We all live in one school district or another and our taxes were raised.
There must be a better way.
There is an alternative to higher and higher property taxes. Why not fund our schools to a greater extent on income and/or sales taxes? That way the income earners and consumers who can afford to pay will pick up more of the costs of education. Also, these are the folks most likely to have children in school and would be more willing to pay for the schools.
Our neighboring state Pennsylvania has a proposal pending to eliminate completely the property-based school tax with an increase in both sales and income tax. The debate over that proposal has been on going for more than two years. Such large changes are always difficult to pass.
In New York, the state aid that schools get comes primarily from income and sales taxes. But it is a very small amount compared to the total cost of local school expenses. In the case of Niskayuna schools, of the $76 million budget, only $18 million is from state aid — only 23 percent of the total costs of our kids’ education.
Why are local town and school taxes so heavily based on property values?
It is because it has always been that way. But why?
Years ago when we operated one-room schoolhouses, taxes to support the teachers we needed were very low. Health care costs, pensions, teachers unions, state unfunded mandates, more administrators and bus transportation for the newly centralized school districts were not in the picture. Local folks had no problem paying land taxes to see the kids get an education, and the kids walked to school. Times have changed but the means of paying for our schools has not.
One negative consequence of local taxes based on property values is seen when folks retire. Their pension income is less than their salary was while working. Thus, what they can afford to pay for schools has been seriously reduced. Many feel they will be forced to move from their old neighborhood. Some move to a lower-priced home or another town or state.
Retirees have a history of voting down school budgets, as they can no longer afford to live in the home they lived in for most of their lives. But this doesn’t hurt just one segment of our society — we all suffer when school taxes rise and when education is cut.
Analyzing the present state budget shows that the New York government’s total spending is $157 billion. Included in that is only $26 billion for school aid. Not nearly enough for the education of the next generation of New Yorkers — our future.
I have a proposal — increase the amount of state aid to schools by about $5 billion each year for the next five years. New York state is in an economic turn-around and the income tax and sales tax revenue should easily increase by that $5 billion — it is only a state budget increase of 3 percent.
As a result, state aid to schools will be increased by nearly 20 percent ($26 billion plus $5 billion equals $31 billion) in the first year alone. Thus, a school like Niskayuna would be getting $1.8 million (20 percent) more. That would nearly cancel the tax increase needed to balance the school budget with no or little added local taxes. Each year thereafter the budget could be met with no cuts in programs or staff and an actual reduction in school taxes.
With the expected economic growth, it should not be a stretch to raise the total state budget by that amount without raising state tax rates. Thus, Cuomo can continue his statement that taxes were not increased. In five years, the amount available for schools will have doubled to $50 billion, giving relief to property taxpayers and ending cuts in school budgets.
Don Cazer lives in Niskayuna. The Gazette encourages readers to submit material on local issues for the Sunday Opinion section.