January 2016 Issue
- School Finance
December 20, 2015

Why we fight the tax cap, tax freeze

Author: By Richard E. Casagrande, Esq.
Source: NYSUT United

No one likes paying taxes, but we all want good police and fire services, clean water, safe roads, decent health care and retirement security. And, we want good public schools. In fact, most New Yorkers agree that we have the right and the duty to provide a good education to New York state's children. Good schools, like all good public services, cost money. NYSUT is fighting the property tax cap and freeze because it perpetuates New York's grotesquely unequal public school finance system, and because it interferes with the right and duty of parents, voters, and school boards to have a fair say in their children's education.

New York state's public schools have always been rated among the nation's best. But, New York leads all other states in income inequality. New York's richest school district is 250 times wealthier than its poorest. The wealthiest decile of New York school districts spend 80 percent more per student than the poorest decile. (All of these facts are taken from NYSUT legal filings, available at www.nysut.org.)

This matters — really matters — because the vast majority of academic research concludes that to succeed in school, children in poor communities need expanded educational services as compared to students in average or high-wealth districts. This is not because children in poor communities are somehow inferior. Rather, the grinding poverty in their communities negatively impacts their ability to learn.

Poverty often means overcrowded, noisy, substandard housing; exposure to violence; poor nutrition; inadequate health care; lack of exposure to modern educational resources; transience; family insecurity or trauma — all of which can cause physical, emotional and mental health difficulties and interfere with learning.

Why does New York state provide the fewest educational resources to the children with the greatest need? In 1982, our state's highest court, the Court of Appeals, ruled that unequal public school funding is lawful so long as children in each school district get a sound, basic education. The court held that because parents, voters and school boards have the right to provide enriched educational opportunity to students through school budget votes, inequality was a permissible result of the exercise of local control.

Much has changed since 1982. Income and funding inequality has multiplied and state aid to public education has fallen, widening the disparity between wealthy and poor districts. The state has failed — by billions of dollars — to fund schools according to the Legislature's 2007 Foundation Formula. Gap Elimination Adjustment cuts fell most heavily on high-need, low-wealth districts. Then, in 2011, the state enacted the tax cap, under which school districts are prohibited from raising property taxes beyond the rate of inflation, or 2 percent, whichever is less, absent a 60 percent supermajority vote. This allows high-wealth, low-need districts to raise vastly more money than high-need, low-wealth districts.

In 2014, the state doubled down by enacting a tax freeze, under which eligible taxpayers in districts that stay within the tax cap get a tax credit for any cap-compliant increase. In districts that exceed the cap, taxpayers are denied any tax credit. Because wealthy districts can raise much more money within the cap, the lion's share of tax credits go to taxpayers in wealthy, low-need districts.

All of this is bad education policy. We also think it is illegal.

First, both the U.S. Supreme Court and state Court of Appeals have said unequal public school funding is constitutional when it is the product of local decision-making, but neither court has addressed the legality of unequal funding when the ability of a school district to raise funding is capped and frozen by state law. Within the tax cap, the wealthiest decile of districts can raise more than five times as much funding as the poorest decile.

Second, it is one thing to have an unequal funding system as a result of local control, it is quite another to arbitrarily cap and freeze that inequality into place by force of law, all without any regard to student need, achievement, current funding or existing local tax effort. In 2014, under the cap and freeze, some 96 low- and average-need school districts were unable to raise the local share of funding expected by the state.

Third, our Court of Appeals has said that local control of education funding is a constitutional right. That right is impaired by the tax cap's undemocratic supermajority requirement. Worse, communities that exercise local control by overriding the cap are punished through the denial of tax credits. So, in 2014, under the freeze, taxpayers in the richest decile of districts received more than six times the tax credits received by taxpayers in the poorest decile.

We have seen the impact of underfunding and disparate funding on the state's public schools: the loss of thousands of teachers, counselors, nurses, School-Related Professionals, academic programs, extracurricular activities, art, music, sports, basic transportation services and, most tragically, the loss of precious educational opportunity for our most vulnerable students.

Winning the tax cap/freeze fight will not solve all the problems of poverty and unfair funding. But, it will help level the playing field and restore the right of parents, voters and school boards to do the best they can for their children's education.

That's a fight well worth fighting. NYSUT's appeal of the tax cap, freeze ruling will be heard Jan. 14 in the Appellate Division, Third Department.