Waiting on the Levy; Boards Face Tax Cap
A dire prediction was heard Monday night on the effect of the recent state law imposing a 2-percent cap on tax levies for all municipalities and school districts.
Speaking at a meeting of local school districts with students in the East Hampton schools, Anthony Cashara of School Aid Specialists, a firm that works with schools on state aid and other revenues, said the new law would “change the way schools operate. It will slowly squeeze, and permanently reduce, the amount of money schools have to operate.”
The joint meeting, held at East Hampton High School, was called to review the ramifications of the cap. “It’s a brand-new world we’re entering,” the East Hampton School District’s interim superintendent, Richard Burns, said. “There is spotty and limited information from New York State.”
The biggest problem, Mr. Cashara said, is that “there have been no written guidelines for public schools on this, after having been passed four or five months ago.”
Using PowerPoint, Mr. Cashara told the representatives of the six school boards at the meeting that the new law nevertheless had “some wiggle room.” It isn’t “really a 2-percent property tax cap; there are certain things excluded based on how the numbers fall.”
Capital improvements and pension and retirement costs above 2 percent are exempt from the cap, for example. However, if voters defeat a budget twice and a district is forced to adopt a contingency, or austerity, plan, the tax increase is zero, Mr. Cashara said. “Any increases at all have to be absorbed through program cuts.”
However, a supermajority of voters in a district — over 60 percent — could veto a budget based on the 2-percent cap. Then, Mr. Cashara said, “there’s no limit. People are still voting on a budget, not a tax levy.” If a budget with a less- than-2-percent increase in the levy gets 60 percent of the vote, “you’re tied into it.”
Mr. Cashara noted that “the law might be changed, because when this hits Albany, with these different interpretations, the Legislature may say, ‘Wait a minute, this isn’t what we voted for.’ ”
Mr. Cashara explained that New York City and its school districts had been exempt from the cap, while at the same time it had been tied until June 15, 2016, to New York’s rent control statutes. Mr. Cashara said there was “no obvious reason” to link the bill to rent control “except to gain interest from New York City Democrats, to bring them into the discussion.”
During the following discussion, Kathee Burke Gonzalez, the president of the Springs School Board, asked, “If a budget doesn’t pass at 60 percent, but a proposition does, does the proposition pass?”
“The way this is written right now, no,” Mr. Cashara answered.
“What does this do to negotiations?” Laura Anker Grossman, the president of the East Hampton board, wanted to know. “If you have 4-percent steps, will contracts start including provisions for freezing steps for a contingent budget?” That was one of the issues on Mr. Cashara’s list, but it was one without an answer at the moment.
“Never has there been such a proposed change mandated with so little information,” he said. “Always beware of laws that pass at 2 in the morning. This law was introduced at midnight in Albany, didn’t go to the Education Committee, went right to the floor, and was passed,” he said.