October 02, 2008

Testimony to the NYS Commission on Property Tax Relief

Source: NYSUT Legislative Department

Testimony of Alan B. Lubin, Executive Vice President, New York State United Teachers, to the New York State Commission on Property Tax Relief, Thomas R. Suozzi, Chair, on October 2, 2008.

lubinGood afternoon Chairman Suozzi and honorable members of the New York State Commission on Property Tax Relief.

I am Alan Lubin, Executive Vice President of New York State United Teachers.

NYSUT is a statewide union representing more than 600,000 members. Our members are pre-k to 12th grade teachers, school related professionals, higher education faculty, and other professionals in education and health care.

Thank you for the opportunity to address you today regarding property taxes in New York state. As both taxpayers AND educators our members support property tax relief while preserving vital programs and services. It is well known that high property taxes have the most negative impact on low and moderate income working families and on seniors with fixed incomes. These populations must shoulder the burden of property taxes regardless of their ability to pay. Whether your concern is making the provision of educational services more efficient, increasing education spending, addressing inequities in school funding, or improving programs, virtually all agree that working families and seniors on fixed incomes need immediate relief. NYSUT has supported this relief in the form of additional state and federal aid to schools, as well as through a property tax circuit breaker.

Federal Funding Falls Short

Improving the education of our nation's children should and must be a much higher federal priority. America's public schools are struggling to provide quality services to increased numbers of disadvantaged students and students with special needs, while also implementing accountability and testing mandates. Specifically, federal funding for IDEA and NCLB have fallen short of promised commitments. This is one reason that so much of the burden is being placed on local property taxpayers. State leaders should press for full federal funding of these programs.

Individuals with Disabilities Education Act (IDEA)

Year after year, the Bush administration's budgets have continued to fall short of the Congressional commitment to IDEA. In fact, the federal government's share of New York's total costs for special education has been dropping annually.  Nationwide, the federal government only provides 17 percent of the cost of educating students with disabilities – less than half of the 40 percent “full funding” level that Congress committed to paying when the IDEA was first adopted 33 years ago.  Because of inadequate federal support, schools are often unable to provide the full spectrum of services mandated under IDEA. In addition, administrators must sometimes cut other critical programs to fund mandated IDEA services.

NCLB/Title I

Title I Grants to local educational agencies are the largest component of the NCLB legislation and are designed to help raise student achievement in the most impoverished communities. New York's share of the program was about $1.238 billion in FY09. This falls far short of fully funding the No Child Left Behind Act.  While No Child Left Behind stands to be reauthorized this year, the budget shortchanges New York state by nearly $1 billion compared to the level set in the law for FY09.

BOCES – Cost Effective for Property Taxpayers

BOCES, or Boards of Cooperative Educational Services, have a long history of providing cost efficient services to school districts, services that oftentimes they would not otherwise be able to access. They are a driving force in expanding equity in learning opportunities – especially to our most at-risk students since they provide services which include special education and alternative education. Rural school districts also gain from the economies of scale that BOCES provide.

Over 300,000 students in New York are currently benefiting from one such program -- Career and Technical Education (CTE). The combined elements of a high school education and integrating academic and technical education - offered through demanding coursework, has had extremely positive results. Students gain work-related skills, can access entry level employment while working to graduate from high school and prepare for college. Students who complete their CTE programs at BOCES graduate at rates significantly higher than the state average (91 percent vs. 66 percent). CTE students also attend colleges at rates that are comparable to their general education counterparts. These programs are a smart investment and we must increase the number of these types of CTE programs, especially in the Big 5 school districts.

BOCES should be empowered to pursue regional approaches to back office functions that would benefit from larger economies of scale, including payroll, procurement, transportation, food service, and other support services.

We should remove statutory, regulatory and policy impediments that prevent them from the goal of providing the most effective cost sharing services and savings in local government programs and operations. For instance, two underutilized bus garages shouldn't be located a few miles away from each other. Also, there shouldn't be three separate snowplow contracts to plow a short stretch of road just because of overlapping jurisdictions. The state must establish policy directives to encourage intergovernmental cooperation that will achieve the greatest cost savings possible.

NYSUT recommends the following:

  • Repeal provisions of Education Law Section 1950 that restricts BOCES authority to provide services to all general and special purpose local governments. BOCES would provide services and savings to towns, villages, cities, counties, colleges and universities, libraries, museums and not-for-profit organizations with educational purposes;
  • The state should provide BOCES aid to large city districts and allow Buffalo, Rochester, Yonkers and Syracuse to purchase BOCES programs and services. This would provide the same incentives for these school districts to share services when it makes sense to do so;
  • Eliminate the cap on the amount of BOCES aid that is paid to school districts for staff shared through BOCES to strengthen the incentive for school district participation in BOCES programs and expand inter-municipal cooperation;
  • The state should fully fund and require each BOCES, with public input, to undertake a study to determine how to implement a regional school transportation system in that BOCES region with the objectives of maximizing cost efficiencies and conserving fuel.

Charter Schools - An Unfunded Mandate

As we prepare to enter the 11th year of the charter school experiment, evidence has shown that the process is deeply flawed on many levels and that our students and taxpayers are paying the price, most notably in Albany and Buffalo.

Let's take a look at charter school payments and property taxes in Albany. In 2007-08 payments to charter schools increased by $3.83 million. The Albany tax levy only increased by $2.54 million. Increases in charter school payments far exceeded the increase in taxes but voters were unable to vote on charter school payments. The charter school process is unaccountable to the local community that pays the taxes to support these schools. This truly is taxation without representation resulting in significant funding losses for the school district while property taxes continue to rise.

Charter schools are also creating huge inefficiencies that cost property taxpayers money. Overhead costs, administrative cost, and management fees that go to for-profit companies are coming straight out of property taxpayers pockets. In Buffalo there are such inefficiencies that city school district officials estimate they could educate the same number of pupils that currently attend charter schools for $35 million LESS than it is costing to run charter schools annually.

What's more, studies have shown that approximately 30 percent of the costs transferred to charter schools are fixed costs that can never be recovered by the sending public school district. In part, this is because one twenty-fifth of a teacher cannot be laid off each time a child leaves to attend a charter school. Our public schools must always stand ready to take back any and all students should a charter school close at the last minute. This has happened around the state. The sending public school must therefore maintain a certain level of extra capacity should these students return.

We believe there is sufficient evidence to impose a moratorium on the approval of any new or expanded charter schools in Albany and Buffalo. Educational research indicates that the transfer of 10% of a school district's student body through either vouchers or charters will create debilitating circumstances for a school district. We have already reached this point in Albany and Buffalo.

We cannot continue to force school districts and property taxpayers to absorb the fiscal impact of charter schools in their community for only a handful of children at the expense of most of the state's students.

Investments in Special Education Save Taxpayers Money

In New York state, our investments in special education are paying off. Special education students are succeeding at greater rates and investments in pre-k and early intervention programs are lowering referral rates for high cost services in the future. In the 2006-07 school year, over 11 times as many special education students earned a Regents high school diploma compared to a decade earlier. Test scores for this population have improved in grades 3-7 in English Language Arts and Math. In addition, data has shown us the long term cost effectiveness of pre-k and early intervention programs. These services and programs have kept students appropriately placed in the least restrictive environment, at a savings to property taxpayers.

There is no doubt about it, special education programs and services are expensive. This is because every child has individual needs and we must offer programs and services to address each child's individual challenges. It does not matter who provides the service – whether it is the school district itself or a school sending a student to private providers or BOCES – providing this education is a costly venture, but a necessary one. We cannot return to the days where we abandon these students and do not expect them to learn. More students with special needs are entering into two year community colleges and the workforce than ever before, proving that they can succeed if given the necessary tools. The state should continue to take proper cost effective steps to ensure that all students with special needs have the best possible educational and social experience.

Health Care Costs – Finding solutions

As I've mentioned in previous testimony, we have been just as concerned as employers about the increases in health insurance costs. That is why we have supported universal health care to achieve a federal solution to this problem. We have also supported the development of a coordinated bulk drug purchasing program for all state agencies after observing double digit increase in the cost of pharmaceuticals most commonly prescribed. New York state should evaluate its current participation in the multi-state Medicaid drug pool and explore these and other purchasing strategies employed by other states in order to maximize savings. That's why we've partnered with Jeffrey Lewis, President of Heinz Family Foundation--this foundation has worked with states such as Oregon and helped them achieve significant savings in procurement of pharmaceuticals while protecting employee benefits.

Energy Initiatives

Last year New York state spent approximately $9 billion on energy to run government buildings, schools, hospitals and other institutions – not including SUNY and the Department of Corrections. These costs include gas, electric, oil, diesel fuel and, in some cases, coal. This year that cost will increase dramatically.

In 2005 New York consumers spent a total of $57 billion on energy. A full 90% was provided by sources outside the United States. This is a tremendous amount of money annually shipped to other nations, some of whom do not have our best interests at heart.

It now costs the Southampton school district $12,000 each time they fill up their bus fleet. In Oceanside, they are presently $100,000 over budget on bus fuel and $300,000 over on heating oil. Monroe-Woodbury is facing a $1.2 million charge for energy budgeted at $720,000.

Energy costs are treated as an uncontrollable expense for school districts and these costs are driving up local property taxes faster than any other budget item NYSUT believes there are alternatives that will not only control costs and cut property taxes, but benefit the environment by creating healthier schools.

Invest in Energy Savings

In 2004 the Legislature approved a program called Power to Schools to assist K-12 schools with energy conservation and cost saving options. Under the New York State Power Authority (NYPA), this program has assisted primarily New York City schools and buses with building technologies and alternative fuels. The authority recently spent $2.1 million on upgrading the power plant in Albany High School.

NYPA is a state authority that actually offers a product for sale – energy. Their electricity rates are the lowest in North America. They also hold the highest bond rating of any public authority. NYPA also has an existing program that dedicates $100 million to help “green” government buildings.

NYSERDA (The New York State Energy Research and Development Authority) was created in the 1970's to help the state reach energy goals. It is an integral part of Governor Paterson's “15 by15” Plan to cut state energy use by 15% below the predicted levels by 2015. These two authorities, in concert with school authorities, could save property taxpayers million of dollars a year.

NYSUT believes that with the oversight and cooperation of SED, goals could be set to:

  • Commit to at least a 25% reduction in school energy use with each building receiving an energy audit from NYPA to identify specific targets.
  • Allocate lower cost NYPA power to regional consortia of districts that agree to energy standards. This could be done via the existing BOCES system.
  • Finance school district energy conservation projects through NYPA.
  • Mandate energy and environmentally sustainable building standards modeled after the Collaborative for High Performance Schools (CHPS) standard.
  • Waive utility bill surcharges for stranded costs and system benefit charges.
  • Approve net-metering for school facilities where on-site devices could produce enough energy to give back to the grid.
  • Provide through NYPA and NYSERDA training for school district energy managers and building personnel.
  • Provide seamless, one stop technical assistance from audits to installation and financing through NYPA and NYSERDA.

Green Schools

It has become economically sound to be environmentally friendly. NYSUT believes that the state must commit itself to the creation, retrofitting and maintenance of green schools.

There are about 5,410 acres or 8.45 square miles of mostly flat roofed school buildings in New York state. The roofs of most school buildings can easily accommodate solar panels to offset the cost of heat and hot water. Solar power generated by that much space could yield 12,550,900KWH per day – about $1.25 million worth of energy daily!

The “green roof” programs that use soil, plants and trees are multiplying throughout the nation. These roof gardens provide additional insulation, cleaner air and reduce the carbon footprint of the building itself. They also create perfect science laboratories.

Beside the obvious long term savings, the initial retrofits will be a boon to local employment. Construction workers, plumbers, electricians, horticulturists and energy experts would benefit immediately. Long term jobs would be created to maintain and monitor the equipment.
The initial costs can be offset by existing programs within the Power Authority. Energy bond issues by the authority could cut costs drastically. Additional assistance from NYSERTA and the Regional Greenhouse Gas Initiative should be expected.

School DistrictConsolidation

School district consolidation in New York state has nearly stopped. Only a few districts have opted to consolidate in the last 10 years. Many possible consolidations do not get approved because of parochial issues rather than lack of cost effectiveness. In order to avoid the issues surrounding closing of schools and loss of the school as the center of some smaller communities or changes to sports programs, the Legislature should consider regionalizing certain school district functions. Our staff has estimated that this could bring in savings of over $440 million annually. This approach would provide cost savings at the local level without having an impact on parents, students and local schools.

NYSUT believes that consolidation of services must include energy saving ideas. Bulk buying of fuels and an increase in shared services is a good start. . These programs and other initiatives are a perfect fit for BOCES especially if they create a regional energy manager to oversee costs, purchases and energy saving devices. Our research shows that only SUNY Buffalo employs an energy manager. We strongly suggest that each SUNY campus and BOCES create a similar position.

More importantly, we must determine if this state can continue to support over 712 individual school districts. Aside from energy costs, the administrative expenses are spiraling out of hand. In most districts it requires a separate building to house administrative functions – another building to heat and cool. We believe that functionally consolidating districts will have an immediate and beneficial effect on tax payers while maintaining local control.


The commission has the grave responsibility of recommending ways to appropriately reduce costs while upholding every child's constitutional guarantee to a sound basic education. The challenge is to focus resources on services to children and reduce the non-instructional and administrative service costs through appropriate economies of scale and efficiencies.

We believe that these proposals are a starting point from which we hope new ideas, new commitments and new approaches will help change the public debate and offer a better future for education in New York.


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