Here are some alarming trends in funding education in New York State:
Gap Elimination Adjustment (GEA): Introduced by Gov. Paterson in 2010-2011 as a way of reducing the State’s then-$10 billion deficit. A portion of the funding shortfall was divided among all the school districts in the State and reflected as a reduction in State aid. This reduced funding to public education by $1.6 billion.
To make up the loss in funding, districts could reduce program or raise taxes.
Tax Cap: In 2011, New York State passed property tax legislation that placed a cap on the growth of school property taxes at two percent or the Consumer Price Index (CPI), whichever is less. A community must vote 60% in favor to exceed the cap. However, due to a complicated formula to calculate allowed tax increases, in some years a district cannot raise taxes at all, even with a simple majority vote.
Campaign For Fiscal Equity and Maisto et al. V. New York State: Because the State violates in own formula in determining State aid, it has been defending itself against lawsuits brought by school districts and parents since 2008. So far, it has lost every decisions and has not complied with a court’s order to properly fund all schools—particularly small city school districts like ours—as required by the State constitution.
Investment Tax Credit: By any measure, the State has cut funding and available funding streams via taxes increases to public school districts. Now the State proposes a first come, first served tax credit that would take $150 million of available funds from education in year one and $300 million in year two, and use that money provide a tax credit to individuals who donate money to schools,including private and charter schools—up to $1 million. NYS Senator Liz Kreuger explains it this way:
“Under this new tax credit the 'charitable contribution' would be deductible on federal and state individual taxes, and wealthy donors would get money back on their federal income taxes. That is, wealthy donors will make taxpayer-funded' profit' on any contributions made under this provision, in addition to getting back the entire amount of their contribution. At the top marginal federal and state income tax rates, a wealthy tax payer could end up with a 'profit' of nearly $300,000 on a contribution of $1 million. “
She continues: “This is not philanthropy, it is tax avoidance for those who least need tax reductions and it will leave a permanent hole in the state budget.”
Under some versions being considered, a donor could own a building, rent space in that building to a charter school, donate an amount equal to the rent to that school, claim the tax credit, take the amount of the donation off his or her tax bill, AND get a refund of that amount on federal taxes. That’s a triple benefit to the building owner.
Philosophically, it is problematic because it allows wealthy people to cherry pick what level of education will be available which students, because some schools will be better funded than others. Cities like Niagara Falls are not likely to benefit from any such donations. Where does that leave our children? Moreover, the funds for the credit will come from monies previously earmarked for public education.
Look Around: The crisis in funding public education is not only a concern for the Niagara Falls School District. Consider these facts:
In May 2013, N-W came perilously close to scrapping its full day kindergarten after a serious budget fall resulting from unfunded mandates and, the biggest blow to its finances, the Gap Elimination Adjustment. This year, NW students themselves held rallies demanding the State increase funding.
Lewiston Porter: In 2013-2014, Lew-Port eliminated 43 positions despite a tax levy increase of almost 4 percent for residents. This year it is facing a reduction in aid of 1.67%. Said Superintendent Christopher Roser, “I’m speechless. It’s huge setback.”
Utica Schools laid off 95 people in March 2014, after having to slash $7million from the budget due to insufficient aid.