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PRESS RELEASE

Statewide School Finance Consortium Video Defines How Proposed Property Tax Cap Will Significantly Harm New York’s Low-Wealth School Districts

Cap is especially insensitive to public education disparities in Upstate districts and communities
Upstate economic development success tied inextricably to ability of region’s public schools to compete with others in NYS and nation

CONTACT: Dr. Rick Timbs, 315-749-3637 or rtimbs@statewideonline.org

East Syracuse, NY (May 25, 2011): The Statewide School Finance Consortium (SSFC), an Upstate New York coalition representing half of the state’s public school systems has produced a brief video (http://www.youtube.com/watch?v=HGOt9yyQR6A) that directly explains how harmful a property tax cap would be to smaller, less wealthy school districts in the state.

“As it appears that the key players in Albany are close to reaching an agreement on a tax cap bill, it is vital to point out the serious consequences that will be inflicted on public education should it become law,” said Dr. Rick Timbs, SSFC Executive Director.

Among several points raised, the SSFC video particularly underscores the consequences for low-wealth communities by comparing how a 2 percent property tax cap would impact two school districts, each with a hypothetical annual budget of $20 million.

Wealthy School District A has plenty of commercial businesses, homes that are above average in cost and value and residents of significant income. Twenty percent of its budget comes from state aid; the rest is locally funded.

Poor School District B has little commercial business, housing of moderate to low value and residents who struggle financially. Eighty percent of its budget comes from state aid and the rest from local taxes, but its tax rate is 25 percent higher than the wealthy district. Its residents have far less income and property value to support schools.

With a law in place limiting school district tax increases to no more than 2 percent a year, School District A would be able to raise $320,000 (2 percent of $16 million) to sustain its already considerable educational offerings. Meanwhile, School District B would only be allowed to raise $80,000 (2 percent of $4 million) to support the basic offerings it provides its students.

“We all agree that New York’s taxes are staggering – the second highest in the nation, according to our governor, who proposed the idea of a 2 percent cap on property taxes,” Dr. Timbs said. “And it’s a politically popular idea that sounds good on the surface. Who wouldn’t want a guarantee that their local and school property taxes won’t rise more than 2 percent a year?

“You wouldn’t, if you knew how a 2 percent tax cap would hurt, rather than help, the educational opportunities your children would be denied in your smaller, less wealthy Upstate school district. That’s the point of our video campaign – people need to know what will really happen to their communities if a tax cap becomes law.”

Those in Albany also need to know. As stressed in the SSFC video, our governor and Upstate legislators must:

• Ensure fair and equitable distribution of state aid to school districts based on ability of residents to support schools.

• Stop promising state mandate relief, but actually start passing some real laws that eliminate or reduce the high costs of mandates for schools.

• Address the reasons for the staggering, inflexible expenses school districts face that cause budgets to escalate.

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SSFC Executive Director, Dr. Rick Timbs is available to speak with reporters and editors about the video, the governor’s proposed tax cap and what it means for New York’s schools. Contact him at rtimbs@statewideonline.org or call 315-749-3637.