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NYSSBA Report: Major Changes Ahead for Schools Under Tax Levy Cap

The state’s new property tax levy cap promises to bring sweeping changes to New York’s public school system–including more school closings, greater sharing of teachers among districts, and a renewed push for consolidations, predicts a new report from the New York State School Boards Association.

The report, entitled The New 3 Rs: Reducing, Restructuring and Redesigning, found that if the tax levy cap had been in place during the current school year, 74 percent of school districts surveyed would have had to exceed the cap in order to meet expenses. That would mean putting forward a budget that requires a 60 percent “supermajority” approval or cutting deeper into school programs.

“School districts and the tax cap are on a collision course,” said NYSSBA Executive Director Timothy G. Kremer, who pointed out that statewide, projected expenses for health insurance and pensions alone would have exceeded the maximum allowable property tax levy increase this year by $103 million.

The NYSSBA report, based on an analysis of expenses and revenue from 121 districts around the state, comes as school districts begin preparations on their 2012-13 budgets, their first under the property tax levy cap.

The report concludes that schools will have to move beyond temporary salary freezes, attrition and retirements and look toward longer-term, structural changes that will provide lasting savings. That includes such options as realigning building configurations, privatizing or sharing services, and restructuring salary schedules.

“When it comes to budget cuts, the low-hanging fruit has already been picked,” said Kremer. “School leaders must now challenge the status quo and budget from a new perspective.”

While school officials can exceed the tax levy cap, to do so they must obtain 60 percent voter approval on their budgets or face a zero percent cap on the tax levy. “In many districts, a zero percent cap on the tax levy–on top of previous cuts in personnel, transportation, extra-curricular activities and electives–would be very damaging to educational programs and services,” said Kremer. “Moreover, many school board members expect more contentious budget votes.”

The report highlights the need for school district mandate relief– leveling the playing field in employee contract negotiations, setting a ceiling for school district health insurance contributions, easing special education requirements and creating lower-cost pension options, to name a few. It also calls attention to the need for lawmakers to support school district innovation and efficiency by allowing upstate districts to establish regional high schools and authorizing regional transportation of students.

“Unless we all make fundamental changes in the way we deliver educational programs and services, school districts will no longer be able to provide their students with a sound, basic education,” said Kremer. “State lawmakers need to make adequate state education aid and mandate relief their top priority in 2012. Recent changes to the state’s tax code should help ensure schools receive a planned increase next year, and they will need every bit of that and more to make up for the loss of federal jobs funding and limits on local tax revenue.”

To read the report, visit the NYSSBA website at www.nyssba.org
Submitted by the New York State School Boards Association.