|
SENATOR SALAND
AND
ASSEMBLY-
WOMAN
NOLAN
TESTIFY AT
SUOZZI
COMMISSION
HEARING |
The Suozzi Commission held a hearing on
February 12th on Real Property Tax Reform (Tax Cap). Senator
Steven Saland (R-C, Poughkeepsie), Chair Senate Education Committee and
Assemblywoman Catherine Nolan (D, Queens), Chair Assembly Education
Committee gave testimony on this issue. Below are transcripts of their
testimony.
SENATOR SALAND: Thank you, Chairman Suozzi and members of the
commission. I don't envy you your charge and I am sure it will be
conducted to the best of your ability. As the Chairman of the Senate
Education Committee, it is my utmost concern that the students of our
state, the great State of New York, receive a quality education which
prepares them for opportunities in high education or directly for the
workforce. Of equal concern is the need to reform the current system by
which we fund K-12 public education, relieving the burden of the onerous
real property tax by providing a system that emphasizes state funding
and the supplanting of local dollars with state revenues. While historic
increases in state aid to schools and the STAR program have alleviated
widespread rejections of school budgets statewide to date, it is almost
certain that without relief and reform, rising real property taxes will
translate into school budget defeats. I am concerned that an imposition
of a cap without removing unfunded mandates and without a corresponding
commitment by the State to be primarily responsible for funding K-12
education with state revenues will compromise the quality of education.
If you currently believe, as many do, that your property tax bill is
excessive, whether it is $8,000, $10,000, $15,000, $20,000 or more, why
would you want to accept paying 3 percent or 4 percent more than that?
Wouldn't you prefer that amount be reduced or eliminated that burden by,
again, the state revenues? The Commission has been charged with the task
of studying and recommending a method by which a real property tax cap
may be imposed. Without question, spending at the district level needs
to be addressed. We should not, however, deal with district spending
without addressing the subject of unfunded mandates imposed on school
districts. I call to your attention to a number of factors which drive
the most spending increases. I would hope the Commission would consider
these multitude of costs which are beyond a district's control. Energy
costs, for example. Districts have been faced with record increases in
fuel and heating costs. Schools must heat their buildings. For most
districts, the state mandates that they transport the students. Pension
costs. Districts are obligated under state law to contribute the
employer share of pension costs which is determined by the public
retirement system. It is a cost that fluctuates depending on the
performance of the funds. I offered legislation that has passed in the
Senate one vote short of being unanimous which would have the State
assume the responsibility of that mandate phased in over a three-year
period. It's an enormous burden in both districts in large cities, small
cities, urban districts and rural districts. They all would do well by
such relief.
Health insurance. Health insurance costs continue to skyrocket as
employers, districts are absorbing a great deal of the increase. Special
Education. School districts across the State are faced with rising
special education costs. Since the Federal Government adopted the
Individuals with Disabilities Act in the early 1970s, they have never
met their fiscal commitment to fund at 40 percent. In fact, the federal
government's share today is closer to 10 percent and those dollars go
directly to our local school districts. They don't stop here at Albany
to be waylaid. That would be a difference of roughly in excess of $2
billion. The most recent numbers I saw were '04-'05, $2.3 billion. I
heard earlier mention of No Child Left Behind. Talk about the tail that
wags the dog. For an eight percent share of funding the federal
government basically is dictating what goes on in our backyards in each
of the 50 states. You are reducing the NCLB funding, at the same time
expanding on requirements. The issue of charter schools is now a
reality, siphoning off money from school districts in which they are
located. Simple fact of the matter is that the pot doesn't get any
bigger. Money follows the student.
Wicks, there's much talk of Wicks reform this year. Now, I'm going to
suggest to you that for years school districts have requested reform of
Wicks Law. Requires separate bids, as you know, electrical, plumbing and
HVAC. New York City Construction Authority and two or three others have
been exempted from their requirements for Wicks. Cost savings in the
City supposedly is 13 percent. The time period has been significantly
reduced in terms of completing these deals. And these contracts in the
areas in which they have been afforded that option it's estimated the
savings could be as high as 30 percent. 30 percent on $1.7 billion
according to '03-'04 numbers, most recent numbers, that's without Excel,
so that number would be higher. I'm going to suggest a bit further the
proposal to reform Wicks leaves a lot to be desired. $500,000 threshold
through 90 percent of the state, everything north of Putnam or Orange
counties, doesn't do a heck of a lot to help the school district receive
the barest relief. The idea that $3 million in the City and one and a
half million I believe it's on the Island and Westchester may work, I
can't address that. I suspect, however, it won't provide a heck of a lot
of relief. These costs represent among the most often described by
districts as burdensome and largely out of their control. This
Commission needs to examine all mandates, and I am certainly confident
in doing so, it will reach the conclusion that any recommendation for a
cap must take into consideration spending that is state mandated and
obviously federally mandated as well. To do otherwise would jeopardize
the quality of education provided to our State's students as districts
would be forced to make deep cuts in spending that is not mandated by
the State. We would undoubtedly see beneficial programs and services
eliminated in order to work within the confines of a cap. Schools have
long requested some form of school aid that we provide them with a sense
of what to expect from the state for budget planning purposes from year
to year. Last year, we agreed on a foundation aid formula that would
provide districts with a four-year plan. In the world of school aid, it
was a tremendous accomplishment which districts lauded statewide.
Finally, they could create fiscal plans with a general idea of what was
to be expected by way of state aid. The Executive, however, abandoned
the agreed upon formula and districts are now back to square one for
purposes of fiscal planning. Their budget plans will be due in late
April of this year and they have no better idea of what to expect in
state aid than they did two years ago. All that was accomplished by
providing predictability to the formula was erased by the Governor in
this year's Executive Budget. Schools on save harmless are projected to
get less than the guarantee of three percent promised to them for four
years. Additional schools that weren't on save harmless last year were
placed on save harmless this year. Without predictability as promised
last year, school districts are asked to plan budgets in the dark.
Should school districts have to work within a cap, it is essential that
they are able to forecast school aid for budget planning purposes.
Predictability must be restored in the foundation aid formula to better
assist districts with their planning efforts. To be fair, guesswork
needs to be removed from the budget making process. With record
increases in school aid last year, the State adopted Contracts for
Excellence designed to hold schools accountable for their spending
receiving in excess of $10 or $15 million in foundation aid and who also
did not meet certain academic performance levels. Certainly the idea of
accountability is one which cannot be overstated; however, the manner in
which it's been imposed certainly can be overstated. Districts earmarked
as Contracts for Excellence schools have extremely limited flexibility
in how their increase in foundation aid is spent and may not, under the
current statute, use their foundation aid to offset the local tax
effort. Should a cap be imposed, Contract schools' inflexible spending
constraints need to be taken into consideration so as not to further
penalize their efforts to improve academic performance. The Senate
remains committed to providing relief through the STAR rebate program.
Last year, we initiated a proposal to double and triple the STAR rebates
for those qualifying for the enhanced STAR and those qualifying for
middle class STAR. Since its inception, STAR has provided probably
somewhere near $25 billion or so in real property tax relief. Without
STAR, many homeowners, particularly seniors, would have lost their
homes. This relief measure needs to be continued and enhanced. A cap is
designed to control spending but does not advance relief as does STAR. I
would like, in closing, to ask you if you might please ponder several
questions. Property taxes certainly are too high. It is essential that
we deal with that issue and deal with it soon and deal with it in a very
broad based way, but to operationalize a cap is not easy. Here are
several questions which I would like to raise for your consideration as
you go through your deliberations. One, how do you apply a tax cap to
the Big 4 upstate cities that don't levy a direct tax for schools? Two,
what about schools that receive sales tax dollars from counties, and
what about small city school districts that impose utility tax? How is
that accounted for? Three, how do you protect from educational program
cuts when fixed costs--pension, health, energy--cause the overall budget
of districts to increase beyond whatever cap is set? Four, how do you
ensure that poor districts don't take the brunt of a cap when state aid
does not meet expectations, or is cut during a recession? Poor districts
are disproportionately dependent on state school aid to run their
schools, so a poor district may need to increase a tax levy by as much
as 10 percent to replace a two percent hole on the state aid side. The
rich district may only need to increase their levy by two percent to
replace a 10 percent shortfall in school aid since such a small portion
of their budget comes from the state, yet a uniform cap of two and a
half, three or four percent, or some other number, wouldn't take that
into account. Last one. How do you ensure that all school districts are
providing a sound basic education if their spending is capped and
overall growth in educational costs is exceeding that cap for long
periods of time? This is of particular concern where low wealth
communities may not vote to authorize additional tax levy to fund
educational programs for many years, leaving those districts with large
reductions in educational programs and staff. As I said when I started
off telling you I didn't envy your charge, I certainly wish you well and
hope that when the dust settle on or before May 15th we have a
resolution that's equitable, fair and doesn't result in pain on school
districts and helps real property taxation.
ASSEMBLYWOMAN NOLAN: I'm really pleased to be here. I apologize I ran a
little late. I know Paul and the other members on the commission know we
are actually on politicians' time, so we run a little bit later. I
apologize for that. I kept my Chairman Mr. Farrell waiting so I really
have to move quickly now. So, I will just read my testimony. And it's
really great to see all of you. It's always a pleasure, and there's a
lot of distinguished good folks here.
So, good afternoon to Chairman Suozzi and distinguished members of the
commission. For the record, I am Assemblywoman Catherine Nolan and I am
fortunate enough to chair the Assembly's Standing Committee on
Education. Before I deliver my testimony to the important and august
Commission, I just want to take a moment to thank Speaker Silver for
allowing me to represent the majority at these proceedings. It is an
honor to be here and to serve as the Education Chair. This commission
was formed, as I understand it, and we are here because New York State
property owners pay among the highest property taxes in the nation. We
know that's indisputable. But I want it to be very clear about this.
Speaking for my colleagues in the Assembly Majority, and speaking as a
property tax paying citizen, we support providing real and significant
property tax relief to the hardworking men and women of this state.
Speaking as the Assembly's Education Chair, and speaking as the parent
of a child in public school, you will have to demonstrate to me how we
pay for a property tax cap without backing away from our obligations;
the foremost of which is the provision of a sound, basic education to
each and every child in this state. I think Regent Tisch is here, and
probably no one knows that better than her, but I want to repeat it
again. It's about the sound basic education for every child in our
state. So, therefore, my testimony this afternoon will focus on our
programmatic concerns as they relate to an imposition of a property tax
cap. Within our leadership, within Shelly's leadership, Denny Farrell's
leadership, our Assembly Majority, New York State has made enormous
strides forward in the education of our children. We led the effort, we
believe this and we feel very proud of this, we led the effort to raise
academic standards in this state, and recently, those who follow
education issues, Education Week proclaimed that New York leads the
nation in education standards. That's a very high accomplishment for our
state by a very well respected publication. Our majority fought and won
a state commitment to universal pre-K for every four-year-old, smaller
class sizes, all day kindergarten, school construction and
rehabilitation, professional development for our teachers, more and
better learning tools for our students, and safer schools for everyone.
When the previous gubernatorial administration cut funding to education,
the Legislature restored it. When Governor Pataki increased funding to
education, it was the Legislature that made sure that those extra
dollars were targeted to high needs school districts. Year after year,
we pushed and prodded the Pataki Administration to stop fighting CFE in
the courts, and to embrace its principles and stop saying that an eighth
grade education is all we need in our state. We feel proud of that
record and we know that we challenge your commission to make sure that
those kinds of principles are upheld. CFE is the solution to funding
education for children throughout this state, especially for those
children in our poorest communities. Finally, when New Yorkers elected
Eliot Spitzer as our Governor, the Legislature and the Executive reached
agreement and established a timetable to fully implement those CFE
principles. I want to stress CFE is a statewide solution. At last we are
closing the funding gap. We are closing the achievement gap. We are
delivering the hope of a quality education to the children in our
poorest communities. Again, statewide. The communities with the highest
need children are eligible to receive free lunch. We cannot go back on
the promises that we have made to our children. We must not and I know
that you will not, but I do challenge you on that because it's going to
be a very difficult road. That is my concern about a property tax cap.
In states that have them school districts have had to resort to cutting
back programs and reducing the level of services they provide to
children. Let's look to the State of California. According to the Public
Policy Institute of California, the famous Proposition 13, the state's
tax cap resulted in larger class size, lower per pupil spending, and
lower pupil achievement. Since Proposition 13, school districts in
California have been forced to cut programs such as music, phys ed and
art; reduce class offerings; and eliminate positions, including
librarians and counselors. From 1991 to 2000, the cumulative gap in
construction spending, in year 2000 dollars, was roughly $890 less per
pupil in California than the national average. When it comes to the
adequacy of school buildings and per pupil construction, California lags
the nation. Where are the bulk of those inadequate school buildings?
Rural areas and in central cities, both of whom serve a disproportionate
number of minority and low income populations. Let's take it one step
further. If you average for each of the 50 states the 4th and 8th grade
National Assessment of Educational Progress scores--my son is a fourth
grader who just got through some of the tests, very stressful for
parents--in reading and math, California finishes below every state
except Louisiana and Mississippi. Quoting the Rand Review, "Widely
regarded as one of the best systems of education in the country as
recently as 30 years ago, the California public school system has since
become, according to most measures, one of the worst". So, Members of
the Commission, I am sure that you understand my concern. That is not
the future we want for New York. At a time when there is a renewed focus
on closing the funding and achievement gaps, I question whether a
property tax cap will require cutbacks in instructional expenditures at
the state or local levels. Consider the needs of our most vulnerable
population, the children who require special education services, for
both pre-school and school-aged children. Recognizing that special
education is essential, state and local governments over the last 20
years, particularly the last 10, have worked in partnership to address
those needs. Now the Governor is proposing in his budget cost shifting,
to shift certain pre-school special education costs to our school
districts. These costs grow significantly year to year. My concern is
the impact a property tax cap will have on our ability, on our
obligation, to provide excellent special education to our school-aged
children. This is another huge question. You can't look at education in
sort of the macro version. You have to look at the micro version of what
happens in special ed. I want you to keep in mind, I know many of you
know this, that our school districts already vote on their budgets. If a
school district votes down its proposed budget, that district goes on an
austerity and contingency budget, which many of us have talked about the
parameters of that for years. We have a process in place for controlling
costs. Freezing districts would leave them where they are, not where
they should be, and that can become inherently inequitable. Now, I just
want to remind the commission that the federal government has imposed
what's really a largely unfunded mandate: No Child Left Behind. Where we
go with that as we move forward is a question that I think you have to
consider. I'm also concerned about property tax caps that include
override provisions because studies have shown that the high wealth
school districts--I know this came up in an article today, but override
positions, the studies of override provisions have shown that the high
wealth districts are more likely to override their caps than the low
wealth school districts; will further exacerbate and highlights the
resource disparity among them. So, I don't think that suggestion
addresses the issue because now you have a chance the wealthier
districts will say, all right, we will pay a little more, but the poorer
ones can't do it. So, it's an issue. There is a lot to consider here.
You have a very unenviable task. It is indisputable that New Yorkers
need property tax relief; but it's also indisputable that money does
matter when it comes to our children's education. Our mantra in the
Assembly Majority, Shelly leads us, is that reform plus resources equals
results, those are our three R's, and we are seeing those results in
school districts across the state. We will not ask the next generation
of school children to take a step backward. My son right now is in
school. He attends a school with no gym, no auditorium. His is
considered a good school. But I just point out whenever there is talk
about funding public education, I do want to use a point from Bob Chase,
who is the former President of the National Education Association, once
said. A public school is not a charity school. A public school is a
place where the children of all of our citizens can learn how to read
and write, to solve mathematical problems, and to think logically.
Public schools are where we make sure every child--immigrant or native
born--learns what it means to be an American. And that's I think a key,
key thing. When children learn these lessons we all benefit. Our
communities, our economy, and our nation. I think it's important to
speak of public education as an investment, because we expect
investments to yield returns. And since every American taxpayer invests
in public education, we must make sure that every American understands
that they benefit from quality education. If we can cap property taxes
and maintain our investments in our children's education and in our
future, who wouldn't support it? But for the children in our classrooms,
all I ask is that you show us how would it be funded. Answer the
questions and many more that will be posed today. I do want to thank you
for allowing me to come and testify. |
