Final Report toGovernor David A. Paterson

December 1, 2008

Thomas R. Suozzi
Chairman

Cassie M. Prugh
Executive Director

Commission on Property Tax Relief
Commission Members
Thomas R. Suozzi, Nassau County Executive
Shirley Strum Kenny, President, Stony Brook University
Nicholas Pirro, Former Onondaga County Executive
Michael Solomon, Director, Merrill Lynch
Merryl Tisch*, Vice Chancellor, New York State Board of Regents
Paul Tokasz, Former New York State Assembly Majority Leader
Special Advisers**
Lisa Donner, Co-Director, Center for Working Families
Elizabeth Lynam, Deputy Research Director, Citizens Budget Commission
Sandra Parker, President and Chief Executive Officer, Rochester Business Alliance
Karen Scharff, Executive Director, Citizen Action of New York
Robert Ward, Deputy Director and Director of Fiscal Studies, Rockefeller Institute of Government
Staff
All members of the staff were loaned part time from other state and local entities.
Cassie M. Prugh, Executive Director, August-December 2008
John C. Reid, Executive Director, January-August 2008
Lee Kyriacou, Policy Director
Dino Amoroso
Kathy Bennett
Patricia Billen
Wendy Burns
Jim Dunne
Stacey I. Epifane
Joseph Gerberg
Geoffrey Gloak
Nancy Gutterman
Philip Hembdt
Shannon HittDianne Malone
Sybil McPherson
Morris Peters
Jennifer Richardson
Amelia Stern
Clarissa Wertman
Interns
Rachel Ainspan
Catherine D’Ascoli
Conor McSweeney
Glenn Pichardo* Commission Member Tisch elected to abstain from the recommendations herein.
**Special Advisers participated in all Commission meetings, offering invaluable advice in their areas of expertise.
The policy recommendations herein are those of the Commission only.

December 1, 2008
The Honorable David A. Paterson
Governor of New YorkState Capitol
Albany, New York 12224
Dear Governor Paterson:
This final report produced by the Commission on Property Tax Relief is a blueprint for how tosolve New York State’s property tax problem. The debate is no longer whether or not there is aproblem, or what caused the problem. The debate is instead over how to address the crushingschool property tax burden our State faces.
Your leadership, particularly in proposing tax cap legislation soon after our preliminary report, is
not only greatly appreciated, but has been essential to what is now a recognition that property
taxes are not just a local dilemma, but rather a statewide systemic problem.
The fiscal crisis we now face demands that the State Legislature accept your challenge to work
together to reduce State spending. Our school districts also need to reduce spending, but to do so
the State must enact the historically difficult to achieve changes in state laws and mandates. The
Commission respectfully requests that you now join your property tax cap effort with a mandate
relief effort to empower school districts statewide to reduce costs. We will support your efforts topersuade the State Legislature to act.
These surely are difficult times. We must provide New Yorkers with property tax relief and wemust improve educational quality. To succeed in both efforts, we must give schools theflexibility to redirect existing resources towards educational quality. Mandate reform is essential
to that effort.
We are honored to have had the opportunity to develop solutions on behalf of New Yorkers andstand ready to support you and your efforts to address the property tax problem we face in thisState. Excelsior!

Respectfully submitted,

Thomas R. Suozzi
ChairmanTABLE OF CONTENTSEXECUTIVE SUMMARY..................................................................................... 1
PREFACE .......................................................................................................... 8
INTRODUCTION............................................................................................. 12
PART INew York State’s Commitment to Quality Public Education ..................................... 15
PART II: THE PROBLEM
Property Taxes Are Too High .............................................................................. 20
Why are Property Taxes So High? ....................................................................... 26
Why High Property Tax Growth is bad for New York State ...................................... 48
PART III: RECOMMENDATIONS
Property Tax Cap .............................................................................................. 52
Recommendation: School Property Tax Cap....................................................................58
Why a “STAR Circuit Breaker” would be better than STAR ...................................... 61
Recommendation: STAR Circuit Breaker..........................................................................65
Changing State Law and Mandate Relief............................................................... 66
Cost Evaluation of New Mandates……………………………………….................……………………….67
Personnel and Other Operational Expenses.....................................................................69
Special Education...................................................................................................... ……..73
Seeking Economies of Scale and Enhanced Educational Opportunities...........................85
School District Consolidation………………………………………………………………………………………..86
Shared Service Delivery………………………………………………………………………………………………..87

Big Four City School Districts............................................................................................89
Additional Recommendations..........................................................................................91

SPECIAL CONSIDERATIONS
Rural School Districts ......................................................................................... 93
APPENDICES
Appendix A: Executive Orders ....................................................................... 95
Appendix B: Summary of Recommendations ................................................ 98
Appendix C: School District Funding, Expense and Pupil Counts Outside of
New York City .............................................................................................. 103
Appendix D: White Papers Received by the Commission ............................ 104
Appendix E: Hearings and Testimony ......................................................... 106
Appendix F: References Cited in Report ...................................................... 113
Appendix G: Bibliography ............................................................................ 114

EXECUTIVE SUMMARYThe New York State Commission on Property Tax Relief was established in January 2008 by
Governor Eliot Spitzer’s Executive Order No. 22 and continued by Governor David A.
Paterson’s Executive Order No. 1 in March 2008. The Commission, assisted by an excellent
staff, has held 14 public meetings, received formal testimony from hundreds of people, received
45 white papers from outside parties, prepared 24 major working papers, held 9 regionalroundtables, and numerous informal and formal meetings with subject experts, elected officials,
stakeholders, and members of the public. The Commission issued a preliminary report on June 3,
2008. Building on that effort, this final report recommends solutions to the State’s unsustainableproperty tax burden.
This report is organized as follows:Part I:New York State’s Commitment to Quality Public Education

Part II:

The Problem
Property Taxes are Too HighWhy Are Property Taxes So High?
• New York spends more per student than any state in America
o Personnel costs are higho Compliance with mandates is costly
o New York’s system of special education has many
expensive requirementso There are too many school districts• State aid as a percentage of total cost is below the national
averageWhy High Property Tax Growth is Bad for New York StatePart III:

Recommendations
Property Tax Cap
Why a “STAR Circuit Breaker” Would Be Better than STAR
Changing State Law and Mandate Relief• Cost Evaluation of New Mandates• Personnel and Other Operational Expenses• Providing Alternatives in Special Education• School District Consolidation• Shared Service Delivery• The Big Four

1Part I: New York State’s Commitment to Quality Public Education
This Commission believes that the education of our children must not be compromised. New
York State has, in the two most recent Enacted Budgets, made an enormous and historicinvestment in school funding. Pursuant, in part, to a court ruling and new State policy, school aid
investment has been targeted to ensure a “sound basic education” and to encourage smaller classsize, full-day pre-kindergarten and kindergarten, and other educational initiatives to improvestudent achievement. Paramount in all of the Commission’s deliberations has been therecognition of New York State’s and, specifically, the Governor’s and State Legislature’s
continued commitment to quality education. At the same time, the Commission believes that
reducing voter anger over school taxes will help redirect the attention of New Yorkers toward
maintaining and improving educational quality. Finally, during this time of fiscal crisis it iscritical to work together to craft solutions and to evaluate in a cooperative and innovative spirit
the options for restraining spending at all levels of government. The Commission urges school
districts to focus on directing resources where they will have the most effective impact onacademic performance, and urges the State Legislature to do more to provide mandate relief byacting on the recommendations made in this report.
Part II: The Problem
Property taxes are too high: New York State has the highest local taxes in America – 78
percent above the national average. Property taxes account for most of the local taxes levied
outside of New York City, and New Yorkers pay some of the highest property taxes in the nation– especially school property taxes. In national comparisons, three of the ten counties where
households paid the highest property taxes, eight of the ten counties with the highest property
taxes as a percentage of home value, and four of the ten counties with the highest property taxes
as a percentage of personal income, are all in New York State.

High property taxes have the most negative impact on low and moderate income working
families, seniors on fixed incomes, and small business owners, who must shoulder this burden
regardless of their ability to pay. Whether your concern is decreasing education costs, orincreasing education spending, or addressing inequities in school funding, or improving
programs, virtually all agree the answer cannot be to continue to increase property taxes at thecurrent rate. The rate of increase in property taxes over recent years is unsustainable, and simply
unfair to those who cannot afford to pay.

2

Why property taxes are so high: New York State property taxes are too high for two basic

reasons:
Expenses are high. New York schools outside of New York City spend more per

student than any state in the nation – an estimated $18,768 in 2008-09.1 New York’s perstudent spending is more than 50 percent above the national average. This results fromhigh personnel costs; the number and complexity of mandates and expense ofcompliance, especially those that govern special education; and the large number ofschool districts, many of which are small.
New York is a proud State with a progressive history and a social compact devoted to
improving the quality of life for all New Yorkers. Generations of New York’s leaders,committed to maintaining its status as a national model of social responsibility, haveadopted laws and regulations that require local school districts and local governments toprovide certain functions in certain ways. The unintended consequence is governmentthat is very expensive. The thorny challenge is to help school districts and other local
governments reduce these expenses, while remaining faithful to our social contract.
State aid as a percentage of total cost is below the national average. It must be

noted that New York State spends a great deal on public education, well above thenational average. In fact, the State has dramatically increased spending over the past
several years. However, the State’s contribution represents, as a percentage of the total
cost, only 44 percent, which is below the national average of 47 percent. Given the severe
economic crisis facing the nation and New York State’s current fiscal challenges,
significant increases in state aid to education are not anticipated. Therefore, it is crucial
that action be taken to reduce expenses.
To the extent that the costs to maintain the most expensive schools in the nation are not coveredby State aid, they must be paid by local property taxpayers. This report examines why school
district costs are so high and how New York State compares to other states regarding statefunding.
Part III: Recommendations
The remaining sections of this report discuss proposed solutions to the property tax problem in
New York State. There are only three options to address the ever increasing cost burden of the
New York State education system: 1) decrease expenses (or at least decrease the rate of growth),
2) increase state aid, or 3) increase property taxes. These options involve hard choices, but thisCommission concludes that, regardless of any other factors, it must be a priority to limit property
tax increases above a capped amount.

1

2008-09 New York State Education Department Property Tax Report Card.

3

After months of public testimony and intensive study, the Commission identified acomprehensive approach that begins with a principal recommendation – a cap on the growth ofproperty taxes. Once that critical priority is addressed, two other key recommendations can
supplement the first in important ways: individual relief based upon need – a “STAR circuit
breaker,” – and reform of state laws and mandates, where compliance causes an unwarranted
growth in costs, a crucial concern during this period of fiscal crisis.
The Property Tax Cap: The Commission proposes capping annual growth in the property tax

levy at 4 percent or 120 percent of the Consumer Price Index (CPI), whichever is less. New
construction, which results in an increase to the tax levy, may be added to increase the cappedamount. Any levy not used may be “banked,” to be used in future years at a rate not exceeding
1½ percent of the prior year’s levy. School districts that do not exceed the cap would no longer
be required to submit their budgets for an annual vote. If a school district wishes to exceed thecap, a positive vote by at least 55 percent of the voters would be required to override the cap. If aschool district has received a 5 percent or greater increase in state aid, 60 percent of the voterswould be required to override the cap. This 5 percent number is not intended to suggest that 5
percent growth in state aid is sufficient for high need districts. Following the submission of theCommission’s preliminary report on June 3, 2008, Governor Paterson proposed legislation
creating a property tax cap. The legislation was substantially similar to the Commission’s cap
proposal, except that the Governor’s bill retained the requirement of a vote on the schoolbudgets, even if their proposed increase was below the cap. The Commission supports thislegislation.
The STAR Circuit Breaker: The Commission recommends that, after a property tax levy cap

is adopted, the State reexamine the STAR program, which provides payments to school districts
with no relation to individual taxpayers’ ability to pay and has failed to effectively reduce
property tax growth. A new STAR circuit breaker, targeted to relieve the tax burden on
individual taxpayers based upon their income and ability to pay, would be a much more equitable
way of reducing an individual’s property tax burden. A levy cap is necessary to ensure thatproperty tax growth is restrained for all taxpayers, including businesses. A circuit breaker
implemented after a cap has been enacted ensures that, in addition to limiting property tax
growth, individual relief is targeted to people most in need. Recognizing the financial pressure
faced by the State, the Commission recommends redirecting at least $2 billion from theineffective STAR program to a more effective circuit breaker.

4Changing State Law and Mandate Relief: The Commission recommends that the Statesupport school districts’ efforts to rein in the costs of salaries, pensions and health care, as wellas general operating and capital expenses. These recommendations address the root causes ofhigh property taxes by adopting the following proposed solutions:
Reduce the Burden of Excessive Mandates•

No new legislative or regulatory mandates without a complete accountingof the fiscal impact on local governments, which must include full documentation,
local government input and proposed revenue sources to fund the new mandates.
•

Mandate accountability through an annual report from the Office of the State

Comptroller, which should include the cumulative cost to localities of complying
with all new regulatory and legislative mandates.
Decrease School District Personnel Costs•

Adopt regional or statewide collective bargaining agreements.

•

Increase health insurance premium contributions by employees andprovide health insurance coverage jointly with other public employers or school
districts, including increased use of health benefit trusts.
•

Convene a study to evaluate creating a Tier 5 in the pension system for

new employees.
•

Amend the “Triborough” provision in collective bargaining to exclude teacher

step and lane increments from continuation until new contracts are negotiated, andcentralize reporting of school district collective bargaining outcomes.
Limit Other School District Operational Costs•

Repeal the Wicks Law, or significantly increase the threshold amounts fordetermining when separate contracts are required in construction projects.
•

Increase threshold amounts for purchasing under competitive bidding

requirements.
•

Increase participation in statewide energy efficiency programs throughcollaborative efforts of state entities.
•

Centralize and streamline school district reporting to decrease personnel

and other costs associated with sometimes duplicative and unnecessary forms andother filing requirements.
•

Simplify or eliminate other individual education mandates.
5

Improve Special Education•

Shift the emphasis of the State Education Department from regulatory
enforcement to outcome-based accountability through targetedintervention to promote best practices in school districts.
•

Dramatically accelerate the integration of special education withgeneral education, improving and increasing opportunities to benefit

students who need extra help within the general education setting.
•Decrease special education classification rates by requiring the State

Education Department to review those school districts with classification rates
20% higher than the state average and determine whether assistance is needed.
•

Reduce the cost of litigation by promoting alternative dispute resolution,

improving the consistency and effectiveness of hearing officers, and by shifting
the burden of proof back to the plaintiff except when the family is unable toafford counsel.
•

Increase collaboration to enhance local and regional service delivery to

students.
•

Secure additional federal funding to reduce the pressure on the property tax.

Seek Economies of Scale and Enhanced Educational Opportunities
School District Consolidation•

Require consolidation of school districts with fewer than 1,000
students and grant the Commissioner of Education discretionary
authority to order consolidation of school districts with fewer than
2,000 pupils to achieve economies of scale and to increase educational

opportunities through expanded course offerings.
•

Restructure state reorganization aid to ensure that it is used predominantly

to pay for reorganization expense or to provide needed services, and temporarilysuspend building aid for districts being consolidated.
•

Amend State law to simplify consolidation by removing anachronistic
distinctions between, union free, central and city school districts.

6

Shared Service Delivery•

Eliminate State Education Department approvals for participation by
BOCES in agreements with other local government entities to provide
non-instructional services, and remove the BOCES district superintendentsalary cap to ensure qualified candidates for this leadership position.
Grant Mayoral Control and Provide Funding Flexibility in the “Big Four” Cities•

Exempt the Big Four city school districts from the proposed property
tax cap.

•

Adjust the maintenance of financial effort requirements to reflect
declining student populations.

•

Grant mayoral control for the Big Four school districts, with a sunset

provision.
Encourage Efficient Delivery of Social Services•

Provide social services to students in schools by directing appropriate

agencies to collaborate and coordinate with each other and with school districts.
Address Other Equity Concerns for Property Taxpayers•

Create countywide property tax assessment and uniform statewide

assessing standards.

7

PREFACE
Context for the Report
In accordance with Executive Order No. 22 of Governor Eliot Spitzer and Executive Order No. 1
of Governor David A. Paterson, the New York State Commission on Property Tax Relief has
closely examined the local property tax burden in New York State, and considered measures toprovide property tax relief. The Commission reviewed property tax relief measures throughout
the state’s history, and evaluated the experiences in other states that have adopted restraints onproperty tax.
Meetings and Regional Roundtables throughout the State
This Commission and its Special Advisers have traveled throughout New York State. From
Buffalo to Mineola, from New York City to Plattsburgh, the Commission held 14 public
meetings and hosted 9 regional roundtables. Commission members have listened to all who
wished to be heard, and actively sought the wisdom of the best minds on subjects relevant to theCommission’s charge.
The Commission benefited from a broad diversity of views. Over 260 individuals provided
formal testimony at public hearings. More than 45 white papers were received from around theState and from national sources. Commission staff wrote 24 major working papers, each
representing an in-depth analysis of a subject within the charge of the Commission. We havecarefully reviewed these submissions, and consulted with many of those who prepared thosereports.
In addition, Commission members participated in scores of formal and informal meetings, phone
conversations, and e-mail exchanges with the subject-matter experts, stakeholders, and elected
officials – all with the specific purpose of understanding the many facets of this complex issue.
Many of these contacts related to the work of the task forces established by the Commission after
the release of its Preliminary Report. Between the release of the Preliminary and Final reports,
the Commission focused on special education, mandate relief, consolidation, and Big Fourdependent school districts.
Building on the Recommendations of Prior Commissions
In addition to the wealth of input received from external sources, the Commission was also able
to stand on the shoulders of previous State commissions. The New York State Commission on
Local Government Efficiency and Competitiveness (LGEC) was established by Executive Orderin April 2007 “…to examine ways to strengthen and streamline local government [including
school districts], reduce costs and improve effectiveness, maximize informed participation in
local elections, and facilitate shared services, consolidation and regional governance.” Over a 12­8month period, the LGEC gathered and analyzed information from public hearings, government
documents, academic research, consultant studies, and reviewed 200 local initiatives tostreamline local government. This effort produced over 70 recommendations to make New YorkState’s local governments more efficient and effective.
The LGEC’s final report, issued on April 30, 2008, was carefully reviewed by this Commission
for issues of mutual concern. 2 This Commission endorses several of the LGEC recommendations
because of their potential to reduce school district costs through mandate relief and more
efficient service delivery systems. If enacted, these recommendations will help to relieve thepressure to increase property taxes.
The Commission also studied the December, 1993 report of the New York State Special
Commission on Educational Structure, Policies and Practices, titled Putting Children First. That
Commission was appointed by Governor Cuomo under the Moreland Act, and was charged witha broad mandate to study the operations of school districts. Even then, Commission members
heard public anger about escalating property taxes, and concluded: “Residential property
taxpayers are becoming increasingly alienated as property taxes for school purposes rise andincomes stagnate.” 3
Several of the recommendations made in Putting Children First have been adopted into statepolicy. Notably, the 1993 Commission found New York to have a “dual system of education”
where schools in predominantly middle class districts offer their pupils far greater program
resources than schools serving lower income children. In the 15 years since the report, State
policies have shifted to significantly improve the equity of school districts finances. Now, thepoorest ten percent of school districts spend, on average, the same amount per pupil as the sixth
wealth decile. Thus, with the support of the Legislature and the Governor, the recommendationsof State commissions can lead to dramatic improvements.
Conversely, several of the recommendations of 1993 Commission report were never acted upon.
Some of them, such as repeal of the Wicks Law and greater flexibility for school districts
through mandate relief, are recommended again in this report. The Commission feels strongly
that leaving these problems for another 15 years, to be studied by the next commission, cannot be
an option.

2

New York State Commission on Local Government Efficiency and Competitiveness. 21st Century Local
Government. Albany: 30 April 2008.
3
New York State Special Commission on Educational Structure, Policies and Practices. Putting Children First.
Albany: December 1993. 25.

9Five Peer States that Serve as Comparisons
The Commission committed itself early in the process to learning from the experience of otherstates – both to emulate successes and to avoid mistakes. Commission staff analyzed all fifty
states, and presented to the Commission a view that five of them, labeled “peer states”, werecomparable to New York in terms of size, complexity, and diversity. In addition, each had
important approaches to property tax relief that warranted close scrutiny. Those states are
Massachusetts, Illinois, California, New Jersey, and Michigan. If a state outside the set of five
was identified by experts as having an approach worth considering it, too, was evaluated closely.
Considering the Special Circumstances of Low Income Families and theElderly
The Commission was mindful of the fallacy of averages – of designing solutions for average
citizens who do not exist. For this reason, in addition to viewing the State region-by-region, theCommission examined many matters through the lens of low income families, where a property
tax increase can force difficult choices about basic necessities of life; and of the elderly on fixedincomes, where a property tax increase destroys a carefully balanced budget. This led to a fuller
understanding, for example, of the assistance that an improved circuit breaker mechanism could
provide these citizens. It also led to a fuller understanding of how vital State aid is to all school
districts, but especially those where the property tax base simply is too limited to support thequality schools that all New York children deserve.
Considering the Range of School Districts, from Wealthy to Most in Need
The Commission instructed staff to examine school districts in all of their complexity. The
sorting of school district revenue and cost data, separating all school districts in the State into ten
deciles, ranging from the poorest to the wealthiest, proved highly beneficial in, for example,
evaluating the impact of State aid policies. While this report often cites statewide averages, theCommission notes that actual amounts, such as per pupil spending, may vary widely in different
regions of the State, and among school districts of differing wealth.
Considering the Big Four Cities and their Legal Status of “Fiscal Dependency”
The Commission took note of the unique legal status of the “Big Four” cities – Buffalo,
Rochester, Syracuse and Yonkers. These cities have school districts that are fiscally dependent,
and therefore cannot independently levy property taxes. That function is reserved for the city,which must also levy property taxes for municipal services.

10

The Challenge Before Us
Our findings on these issues, taken together, present daunting challenges. This report addresses
these challenges in all of their complexity, with a focus on the desire shared by all for quality
schools and the need to address the burdens of the property taxpayer.

11

“I signed my oath of office, and the next thing I did was sign the executive order to keep thiscommission going, because we want to find a solution to property taxes in this state.”- Governor David A. Paterson
March 20, 2008

INTRODUCTION
New York is proud of its schools, but the property taxes that support
those schools are growing at an unsustainable rate
The Commission heard over and over again, downstate and upstate, on Long Island and in
Buffalo: New York has a problem. This State is proud of its schools, but the property taxes that
support those schools are growing at an unsustainable rate.
New York has a problem…
the property taxes that
support its schools are
growing at an
unsustainable rate.

The debate is not about the problem, nor is the debate about
why the problem exists. The debate is about exactly whatshould be done about it.

The Commission traveled throughout the State to conduct
14 commission meetings and 9 regional roundtables –taking testimony, receiving white papers, and discussingthese complex issues with mayors, senators, assembly members, superintendents, school board
members, and community leaders.
Most importantly, we heard from local taxpayers – taxpayers who are concerned, and sometimes
even angry.
For example, we heard from a young mother from Malta who waited with two of her children forover an hour to testify before the Commission. Her story was like so many others. The property
taxes on her home had risen $2,100 in one year. Even household repairs had become
unaffordable on her husband's modest salary. She wanted us to know that they feared losing theirhome if their property taxes continue to rise.
Hundreds of additional stories – many called them nightmares – poured in through letters andemails from homeowners statewide. One senior citizen reported that his private sector pension
had increased only 7 percent during a time when his property taxes had more than doubled.
Another, a retired utility lineman from Saranac Lake, reported that when he first retired in 1994,
property taxes were 8 percent of his fixed income. Last year, despite the STAR exemption, histaxes were $12,274 and consumed 22 percent of his income.
An 80-year-old widow from Woodstock told us that when she and her husband built their house,
the combined school, town and county property taxes were $500. Her property taxes haveincreased ten-fold to more than $5,000 while she struggles to pay her bills with half of her
husband’s pension and social security. She wrote, “It was always the American dream to own
12one’s own home. Now it has gotten to the point where the home owns you. There has to be abreaking point, and I think we have reached it.”At the Commission’s Yonkers hearing in October, Ronnie Cox of Mount Vernon told us about
her efforts to expand opportunities for students beyond what tax dollars and state aid could
provide. Because the property tax burden is so high in Westchester County, taxpayers in her
school district had voted down the school budget, thereby cancelling all sports, as well as otherprograms. As President of the Mount Vernon Educational Foundation, Ms. Cox led efforts toraise funds to restore these programs – raising nearly $750,000. She told us, “Yes, we arefinding a solution for this year, but it’s only one shot at the well; we will not be able to go backto the public and generate this kind of support again. What are we going to do next year, what
are we going to do year after year after year? This is where we need to look to our elected
officials and our leadership for some relief.”…the property tax
burden is one of
the State’s mostpressing problems– and it is only
getting worse.

Many expressed similar messages in their testimony – that the
breaking point has arrived. Homeowners are “voting with theirfeet” – selling their homes and moving to escape the high property
tax burden. Indeed, census data consistently show New York
leading the nation in the number of residents migrating to otherstates. Almost universally, we heard that the high property tax
burden is one of the State’s most pressing problems – and it is only
getting worse.

This is the reason that Governor Paterson has asked the Commission on Property Tax Relief totackle this issue. Historically a local issue, today it is clearly a statewide issue. Indeed, theGovernor’s Executive Order asks the Commission to consider the systemic, statewide nature ofthis issue, and to recommend appropriate policies for consideration by the State’s leaders.
What should be done? The reflexive response of most New Yorkers is this: If local communities
are taxed to the limit, then the State, with funds from the income tax, must do more. This
Commission notes that the State has recently committed to do more. Just two years ago, state aid
to school districts was $18 billion. The State has increased school aid to $22.2 billion – anincrease of $4.2 billion and 23 percent – in just two years. This is real progress.
What more should be done? Many would respond: stop, or slow, the spending growth. In goodyears, the State’s economy has grown 5 percent, and most observers consider anything above 5
percent growth to be unsustainable. In years of economic strain, growth at a rate much lower
than 5 percent may well be essential. In light of that reality, is there a way to halt school district
spending growth that most observers believe is unsustainable?
The question is answered differently depending on where one sits.

13

If you are a school board member or a superintendent – and the Commission heard from many –the question is answered: Allow me to control my own destiny and perhaps I can rein in thisgrowth. A school district has too many masters, they say. School districts must adhere to
thousands of pages of regulation. They point to “mandates,” particularly “unfunded mandates,”
as a costly usurpation of their authority, asserting that these mandated costs are responsible formost of the spending growth.
If you are a citizen struggling to make ends meet – and we have heard from many – you say: “Ifonly I had 5 to 7 percent more every year to live on. If I did, life would not be as tough as it is.”In this regard, the Commission has heard much criticism of what were viewed as extravagant
salary raises and benefit increases that fuel unchecked spending.
If you are an observer – in a national research center, or
It might be a good idea toa think tank, or a university – you may point out certain
examine our structure.
fundamental facts about our school districts that mightraise obvious questions about efficiency. For example,-Robert Bennett, Chancellor, NewYork State Board of Regents
there are almost 700 distinct school districts in New
York State. Approximately 200 of these districts enroll
fewer than 1,000 children. Excluding New York City, New York’s average school district sizeof about 2,500 ranks 32nd among states, just below Alaska, and substantially lower than thenational average of 3,400 students.
The Commission has listened carefully to all of these voices. We have concluded that the State
must adopt solutions that address taxpayers’ anger, and redirect that anger to advocacy forincreased educational quality. And, we must support school districts by providing administratorswith greater control over their expenses and operations, so that their focus, too, can be on
improved educational quality. We believe that there is a way to strike a balance – a balance that
supports both continued enhancement of our children’s educational opportunities and real relief
for property taxpayers.
That is the subject of this report.

14

Part INew York State’s Commitment to
Quality Public Education

“The Legislature shall provide for the maintenance and support of a system of free common schools,
wherein all the children of this State may be educated”
New York State Constitution

New York State’s Commitment to Quality Public Education
The education of our children cannot be compromised
This Commission believes that the education of our children must not be compromised. Further,
this Commission believes that there is a consensus on this point among all citizens and leaders
throughout the State.
Governor Paterson has strongly advocated for public education, and has expressed his
administration’s support for continuation of recent educational progress. Majority Leader Skelos
and Speaker Silver, together with elected officials from both sides of the aisle, have all madeclear that they share Governor Paterson’s commitment.
In doing so, our leaders reinforce a proud and historic tradition. Since 1884, the New York State
Constitution has required that: “The Legislature shall provide for the maintenance and support ofa system of free common schools, wherein all the children of this State may be educated.” (NYConstitution, Art XI Sec. 1).
There have been exciting advances:•

State aid to schools. In its most recent budgets, the State substantially increased its

investment in education. 4 The 2006-07 budget provided $18 billion in school aid. The
2007-08 budget enacted an increase of $2.3 billion, and the 2008-09 budget provided for
an increase of $1.9 billion. Thus, in just two years, the State has increased its
commitment to schools by $4.2 billion to over $22.2 billion, an increase of 23 percent –very significant progress by any measure.

4

In 1995, the Court of Appeals held that the State Constitution required the provision of a sound, basic education to
New York’s students, Campaign for Fiscal Equity vs. State of New York, 86 NY2d 307 (1995). See also Campaign
for Fiscal Equity vs. State of New York, 100 NY2d 893 (2003). The Court required a calculation of the actual
expense of fulfilling the guarantee of a sound basic education in New York City. See Campaign for Fiscal Equity,
Inc. vs. State of New York, 8 NY3d 14 (2006).

15

•

Funding school districts most in need. The Commission has studied school aid

funding in the poorest and wealthiest school districts across the State, and finds that theState’s policy of directing more funds to districts with high needs is working. Under thefoundation aid formula, the highest percentage growth in funding is directed to the school
districts most in need. These policies, formulated to support schools and children, also
support the taxpayers most in need, as high-need districts, in general, have limited andalready over-burdened, property tax bases. When school spending grows in such highneed districts, state aid offers significant and important property tax relief.
•

Targeting and Accountability. State policy targets school aid investment to ensure a“sound basic education,” to address disparities in school district wealth and to encourage
proven programs to improve student achievement. These programs include class size
reductions, increased time on task, teacher and principal quality initiatives, full-day pre­kindergarten and kindergarten, support for English language learners, middle and highschool restructuring and other education quality improvements.
These policies have helped move the State towards a more equitable education funding system as
can be seen by examining per-pupil funding across the wealth spectrum. When the State’s nearly
700 school districts are divided into wealth deciles we see that the average revenue per pupil
from all sources for the first six wealth deciles is essentially equal. 5
The following chart demonstrates that the poorest ten percent of school districts receive, on
average, about the same total revenue per pupil as the sixth wealth decile of school districts. 6
New York City schools receive about the same per pupil funding as the 7th and 8th wealth deciles.
This chart also highlights that the wealthiest districts receive most of their school funding
through their property tax bases and that State aid per pupil is weighted towards those districts
with insufficient capacity to raise local revenues through methods such as the property tax. The
poorest ten percent of school districts raises the least amount of funding through local sources
and rely the most on State aid, while the wealthiest ten percent of school districts raisesignificantly more from local sources and rely on State aid to a much lower degree.

5

The state has close to 700 school districts. The “lowest” decile includes the roughly 70 districts with the lowest
property and income wealth per pupil, the “2nd” decile includes the roughly 70 districts with the next lowest property
and income wealth per pupil, and so forth. New York City is treated separately. The rankings of wealth are basedon the Combined Wealth Ratio, which measures property and income wealth in relation to the state average andconsiders both as being equally weighted.
6

Adjusting for pupil need by using Total Wealth Pupil Units (TWPU) instead of pupil counts, this “leveling” ofrevenue per pupil regardless of district wealth remains true, both in terms of wealth deciles and Need/Resource
Categories.

16

School Funding Per Pupil, by Wealth Decile
2006-07 (NYC Considered Separately)$25,000$20,000

State Aid
Federal Aid
STAR Payments
Local Revenue$15,000$10,000$5,000$Lowest

2nd

3rd

4th

5th

6th

7th

8th

9th

HighestNYC

Source: State Education Department ST-3 filings.

While New York’s progressive use of State aid helps to equalize funding, equal revenue does notnecessarily lead to similar outcomes. Lower wealth districts tend to have more high-needs
students, whose education is more expensive. The State Education Department categorizes eachschool district into one of six need/resource categories – New York City, the “Big Four”
dependent school districts of Buffalo, Rochester, Syracuse and Yonkers, high needurban/suburban districts, high need rural districts, average need districts and low need districts.
These categories reflect both the ability for a school district to raise local revenue and themagnitude of need in the district.
The following chart shows how the growth of State aid revenues since 1993-94 has become moreprogressive when considered by need/resource categories. Since 1993-94, State aid has grown ata faster rate for the “Big Four” school districts, as well as for New York City, high needurban/suburban districts, and high need rural. In terms of linking State aid need to the ability toraise local funds, New York has improved dramatically over the last fifteen years.

17

State Aid Per Pupil by Need/Resource Category
1993-94, 2005-06, 2007-08 est.
$16,000
1993-94
2005-06
2007-08 est.

$14,356$14,000$12,000$10,635$9,807$10,000$7,893$8,000$6,387$6,000$4,997$4,975$4,496$3,507$4,000$3,119$3,052$1,883$2,000$Big 4High Need
RuralHigh Need
Urb/Sub

NYC

Average Need

Low Need

Source: State Education Department ST-3 filings.

The Commission recognizes the State’s commitment to providing a quality education to ourchildren as reflected in recent school aid appropriations. The Commission notes that, since thesubmission of the preliminary report, there has been a very substantial deterioration in thisState’s – and the nation’s – financial circumstances and outlook. The Commission previously
acknowledged the essential relationship between State aid and local property taxation – the local
taxpayer funds what the State does not fund. Local property tax rates continue as a concern, andlocal taxpayers are now personally bearing the additional financial burdens of greater expense
for many essentials, including food, health care, energy and motor fuel, and may also be facing
challenges such as job loss and home foreclosure. It is crucial to remember that these local
property taxpayers also pay taxes to the State government, which has been forced to reevaluate
its current and future spending plans in light of budgetary realities.
As this report points out, New York spends more per pupil than any other state. Overall
expenditure growth has increased at a compound annual growth rate of 6 to 7 percent in recent
years. At the same time, student population has been declining. This pattern is not sustainable.
At this time of fiscal stress, it is critical that all parties work together to craft solutions, and theoptions for restraining spending at all levels of government must be evaluated in a cooperativeand innovative spirit. The need to provide a quality education to our students remains
paramount. The Commission urges school districts to focus on efforts to ensure that limited18

resources are directed where they will have the most effective impact on improved academic
performance, and urges the State Legislature to do more to provide mandate relief by acting on
the recommendations made in this report.
This report provides some suggestions for addressing the need to curb the growth of
expenditures, which is essential to long term property tax relief. Economies and efficiencies
implemented in response to current constrained fiscal circumstances will ensure that school
districts are on a firmer footing to respond to property taxpayers’ concerns when financial
prospects improve. Thus, the recommendations in this report on approaches to relieving school
district burdens have become an even more essential focus, and the Commission urges theiradoption.

19

Part II
The Problem

15

The Problem: Property Taxes are too HighNew York State has the highest local taxes in America – 78 percent above the national average. 7
New York’s local taxes also rank far above those of other large states. For example, New Jersey
has the next highest level of local taxes, but they are only
New York State has the
18 percent above the national average. As shown in thehighest local taxes inchart below, New Yorkers pay $84 per $1,000 of personal
America – 78% above theincome in local taxes as compared to the national averagenational average.
of $47. When local taxes are combined with State taxes,
New York has the highest tax burden of any large state –35 percent higher than the U.S. average. 8 It is important to note, however, that State taxes are nota primary cause of this high tax burden. New York ranks only 5 percent above the national
average in state taxes (at $73 per $1,000 dollars of personal income). It is New York’s local
taxes that are particularly high.
State and Local Tax Burden
New York and the U.S. Average, 2005-06
Taxes Per $1,000 of
Personal Income

U.S.
AverageNY
Average

Percentage
DifferenceState and Local

$116

$157

35%

State

$69

$73

5%

Local

$47

$84

78%

Source: U.S. Bureau of the Census and Bureau of Economic Analysis

We here in Onondaga County pay so dearly in property taxes, the highest in the
country.…it has led too many to have no choice but to sell their homes andleave the state.
- Central New York Homeowner

7

New York State has the highest local taxes in America when mineral related severance taxes are excluded. If
severance taxes are included, Wyoming has the highest local taxes. Source: Local Taxes in New York State: Easing
the Burden. Citizens Budget Commission December 2007, based on data from US Bureau of Census (2004-05).
8
Ibid.

20

There is a significant disparity between the taxes paid by citizens of New York State, notincluding New York City, when compared to the rest of the nation, as the chart below illustrates.
Local and Property Tax Burden
New York Not Including NYC Compared to U.S., 2005-06
Taxes Per $1,000
Personal Income

U.S.
Average

New York State
Not Including
NYC

Percentage
above U.S.
Average

Local

$47

$71

52%

Property

$35

$54

56%

Source: Citizens Budget Commission based on data from U.S. Bureau of the Census and Bureau of Economic Analysis

Outside New York City property tax represents the greatest proportion, 76 percent, of local
taxes. Outside New York City citizens pay $54 out of every $1,000 of income in property taxes,
56 percent above the national average of $35. Total local taxes are 52 percent above the national
average.
Whether it is property tax amounts, property tax rates, or property tax as a percentage of income,residents outside of New York City pay some of the highest property taxes in America.
Looking at property tax amounts, several New York counties – Westchester, Nassau, andRockland – were among the top ten counties nationally in terms of property taxes paid on owneroccupied residences in 2007. 9
Median Household Tax by County, 2007

1. Westchester

New York

MedianTax$8,422

2. Hunterdon

New Jersey$8,224

3. Nassau

New York$8,153

4. Bergen

New Jersey$7,797

5. Somerset

New Jersey$7,597

6. Essex

New Jersey$7,535

6. Rockland

New York$7,535

8. Morris

New Jersey$7,281

9. Union

New Jersey$7,007

10. Passaic

New Jersey$6,928County and Rank

State

Source: U.S. Bureau of the Census, American Community
Survey, 2007

9

The Tax Foundation based upon U.S. Bureau of the Census, American Community Survey, 2007.

21

When property taxes are expressed as a percentage of home value, eight of the top ten counties in
the country are in New York State. Of particular note is that all of the eight New York counties
are in the upstate area and are either losing population or experiencing slow population growth.
Additionally, some of the counties are in rural areas of New York, where housing values tend tobe lower, which necessitates higher tax rates to raise the same amount of taxes.
Property Taxes as a Percentage of Home
Value by County, 2007
State

Tax
Rate

1. Niagara

New York

2.9%

2. Monroe

New York

2.8%

3. Chautauqua

New York

2.8%

County and Rank

4. Wayne

New York

2.6%

5. Oswego

New York

2.6%

6. Onondaga

New York

2.5%

7. Erie

New York

2.5%

8. Fort Bend

Texas

2.5%

9. Steuben

New York

2.5%

10. Camden

New Jersey

2.4%

Source: U.S. Bureau of the Census, American Community
Survey, 2007

Looking at property taxes as a percentage of income, four of the top ten counties in the country
are in New York. These counties are all in the metropolitan New York City area, where bothaverage incomes and property taxes are higher than in other states.
Property Taxes by County as a Percentageof Household Income, 2007

1. Passaic
2. Union

New Jersey
New Jersey

Taxes asPercentage
of Income
8.5%
8.1%

3. Essex

New Jersey

8.1%

4. Nassau

New York

8.0%

5. Westchester

New York

7.8%

6. Bergen

New Jersey

7.8%

7. Rockland

New York

7.7%

8. Putnam

New York

7.7%

9. Hunterdon

New Jersey

7.5%

10. Hudson

New Jersey

7.5%County and
Rank*

State

*New York’s Suffolk County is ranked 11th and Orange
County 24th. Source: U.S. Bureau of the Census, American
Community Survey, 200722

By any of these measures, property taxes in New York rank among the very highest in thenation. This problem is compounded by the increasing disparity between the growth of property
taxes and inflation. The following chart shows that the growth rate of property tax levies in New
York has dramatically exceeded inflation, especially since the year 2001.

Tax Levy Growth Compared to Inflation
School Districts Outside of New York City, 1982-2007

350%

Tax Levies Outside of NYC
Tax Levies Excluding STAR
Consumer Price Index

300%

7% Annual
Growth

250%

200%

150%

100%

50%

0%
1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: Nelson A. Rockefeller Institute of Government.
CPI data from U.S. Bureau of Labor Statistics, Northeast Urban Consumer Price Index

23

The growth rate of tax levies is much greater than the growth rate of wages in New York. The
following chart shows that while property taxes have increased by a total of nearly 54 percent
since 2000, wages have risen by only about 26 percent. This underlines how unaffordable
property tax bills have become for typical New York families, which makes the State a very
costly place to live. It also creates a severe competitive disadvantage for New York, undercutting
incentives businesses might otherwise have to locate in some New York communities.
Tax Levy Growth Compared to Salary Growth
Outside of New York City, 2000-2007

60%

Real Property Tax Levies
Tax Levies Excluding STAR
Annual Average Salary

50%

40%

30%

20%

10%

0%
2000

2001

2002

2003

2004

2005

2006

2007

Source: Nelson A. Rockefeller Institute of Government
Salary data from U.S. Bureau of Labor Statistics,
Property Tax Levy Data from New York State Office of Real Property Services

24

The Commission notes that school property taxes represent the majority of the property tax
burden. Outside of New York City, school property taxes are 62 percent of total property taxes,
as shown in the following chart.
School Property Tax as a Percentage of Total Property Tax
Outside of New York City, 2007
City/Village
Special District

Town

School Property Tax,
$17.33 Billion, 62%CountyCounty: $4.7B, 17%
Town: $1.9B, 7%Spec Dist: $2B, 7%
City/Village: $1.8B, 7%

Source: New York State Office of Real Property Services

Therefore, from every perspective, New York State property taxes have become the mostburdensome in the nation. We must find a way to alleviate this problem.

25

The Problem: Why are Property Taxes so High?
School taxes are high and growing rapidly because: (1) New York spends more on primary andsecondary education than any other state; (2) the annual spending growth rate accelerated from 4
percent to 6 percent and is now higher; (3) New York State’s share of school funding (state aid
plus STAR payments) is somewhat below the national average, although significantly higher indollar amount; and (4) state funding growth had not – until 2007 – kept pace with higher expense
growth.
This section examines school district expense and funding, and the details of individual expense
categories (for example, salary and benefits) as well as broader expense drivers that cut acrossexpense categories (for example, mandates, and special education).

School District Expenses and Funding
1. New York spends more per student on primary and secondary education
than any state.

The bottom line: it's notwhether we pay for education;
it's whether we pay wisely foreducation.
- Alan Lubin, Executive Vice
President, New York State United
Teachers

For the 2008-09 school year, New York will spend an
estimated $18,768 per pupil, excluding school districts
in New York City and the four other cities withdependent school districts. There is significant variationin per pupil spending among individual school districts,
based on analysis of school district budgets. Including
expenses for New York City, New York State
consistently spends more per pupil than every otherstate (note that expenditures for the District ofColumbia are sometimes higher).

26

The table below shows per-pupil spending, not total spending, on a statewide basis (including
New York City). 10 It shows that New York’s per-pupil spending has increased at a compound
annual growth rate of 6.6 percent during the past six years. That rate is substantially higher than
the national average of 4.8 percent. 11

State

Per Pupil Spending Excluding Debt Service,
1999-00 to 2005-06 (even years)
1999-00 2001-02 2003-04 2005-06

6-Yr CAGR

United States$7,394$8,259$8,900$9,7884.8%

District of Columbia
New York
New Jersey
Rhode Island
Connecticut
Vermont
Massachusetts
California

11,935
10,957
10,903
9,646
10,122
8,799
9,375
6,401

14,557
12,343
12,197
10,552
11,022
10,22910,808
7,439

15,414
13,926
13,776
12,27911,755
11,675
11,583
7,708

17,877
16,095
15,362
13,917
13,461
13,377
13,128
8,416

7.0%
6.6%
5.9%
6.3%
4.9%
7.2%
5.8%
4.7%

Source: U.S. Department of Education, National Center for Educational Statistics

The data in the following table summarizes New York’s ranking on per-pupil spending
compared to other states over the last 36 years. New York ranked first in per-pupil spending in
1969-70, and then slipped to fourth in 1989-90. Since 2000, with higher expense growth thanother states, New York’s rank has returned to first or second. While wholly comparable data are
not yet available for 2006-07, trends suggest that New York will rank at or near the top again,
and it is expected to hold this position in 2008-09.
State Ranking of Per Pupil Spending, 1970 to Present
State
District of Columbia
New York

1969-703
1

1979-804
2

1989-901
4

1999-00
1
2

2005-06
1
2

New Jersey

4

3

3

3

3

Rhode Island

15

11

6

5

4

Connecticut

5

20

5

4

5

Vermont

22

26

7

9

6

Massachusetts

20

6

8

6

7

California

11

18

24

37

39

Source: U.S. Department of Education, National Center for Educational Statistics

10

Per pupil spending is total expenditure divided by average daily attendance, which is the method of statecomparison that most closely matches the State Education Department’s per pupil spending numbers.
11“Quality Counts,” Education Week, 2008. Even when regional cost of living differences are taken into account,
New York is still 32.7 percent above the national average in per pupil spending. This spending rate is exceeded only
by New Jersey.

27

2. The annual growth rate of school expense accelerated from 4 percent to 6
percent and is now higher.
School expenses in New York have been increasing recently at a compound annual growth rateof 6 percent or more. The Commission notes, however, that expenses grew at only about 4
percent in the first four-year period shown below. Expenditure growth then accelerated to 6
percent, and in recent years has been higher, and is estimated to approach 7 percent for the 2007­08 school year.
Growth of School Expenses in New York
Compound Annual Growth Rate

Annual Growth Rate

1993-94 to
1997-98

1997-98 to
2001-02

2001-02 to
2005-06

2006-072007-08(estimated)

4%

6%

6%

6%

7%

Expense

Source: State Education Department ST-3 filings, U.S. Bureau of Labor Statistics

The chart below shows expense growth on an annual basis, from 1993-2007. Expense growth
was relatively modest from 1994-1998, ranging from a low of 2.5 percent to a high of 5.2
percent. Beginning in 1997-98, however, expense growth turned upward. Since then expense
growth has ranged from a low of 5.2 percent to high of 7.4 percent. The STAR property tax relief
program, which substituted State funding for a portion of local property taxes, was implemented
at the beginning of this period.
Total Expense
School Districts Outside of New York City, 1993-94 to 2006-07
$40 B

8%
Total Expense$35 B

Annual Growth of Total
Expense

7%

$30 B

6%

$25 B

5%

$20 B

4%

$15 B

3%

$10 B

2%

$5 B

1%

-

0%
93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07
Source: New York State Education Department, ST-3 filings28

Total expense in 2006-07 for non-NYC school districts was$30.4 billion ($48.6 billion including New York City),roughly double the $15.6 billion spent in 1993-94 ($23.8
billion including New York City). Total school district
expense for 2007-08 is estimated to exceed $33 billion for
districts outside New York City ($53.7 billion including New
York City). While final total expense data are not available for 2007-08, based on estimates of
total funding collected, the expense growth is estimated at 6-7 percent annually.
Total school district
expense for 2007-08 is
estimated to exceed $33
billion for non-NYC
districts.

3. New York State’s share of school funding (State aid plus STAR payments)
is somewhat below the national average, although significantly higher indollar amount.
The primary sources of school funding are local revenue and State funding. Property tax
constitutes the vast majority of local revenue. State funding consists of two distinct categories:
State aid, which is designed to help pay for schools, and STAR payments, a form of property tax
relief paid to schools in lieu of taxes that would otherwise be paid by homeowners. Federal aid is
the third, much smaller component of school funding.
State aid is largely formula-driven, taking into account the number of pupils, pupil needs,
specific programs (e.g., BOCES services or new construction) and, importantly, local district
wealth. A large component of State aid is highly progressive relative to district wealth, although
there are base levels that every district receives through various forms of general funding. In
contrast, the Basic and Enhanced STAR Payments to school districts are somewhat regressive
relative to district wealth, in that they are largely driven by local property values.
As can be seen in the following table, local revenue provides 53 percent of all funding for school
districts excluding New York City. State funding, including both State aid and STAR payments,
represents 44 percent of funding. Thirty-seven percent is state aid while another seven percent isfrom the effect of STAR payments by the State in lieu of homeowner property taxes.
School Funding Sources, 2006-07
New York State
Not Including NYC

Percentof Total

New York
State

Percentof Total$16.4 B53%

$25.0 B

51%

State Aid

$11.0 B36%

$18.0 B

37%

STAR Payments$2.5 B8%$3.6 B

7%

State Funding$13.5 B

44%

$21.6 B

44%

Federal Aid$1.2 B4%$2.7 B6%$31.1 B100%

$49.3 B100%

2006-07 Funding
Local Revenue

Total

Source: New York State Education Department, ST-3 filings

29

The Commission examined New York’s State share ofschool funding over time, from records reaching back to the
1940s, and found that it has consistently tracked lower than
the national average. The following graph compares New
York’s share of school funding to the national average foreach year since 1944-45. The State share has fluctuated overtime; however, since the mid-1970s it has been lower than the national average. The share ofState funding declined to 38 percent in 1993-94, but in the more recent period, with STAR
payments included in State funding, there is another peak of over 48 percent in 2001-02. There isa gradual decline thereafter, bottoming out at 43 percent in 2005-06. The 2007-08 and 2008-09
State budgets included historic increases in school aid. Property taxes also increased, leaving thecomparative shares relatively stable.
New York’s state share ofschool funding has
consistently tracked lower
than the national average.

State Share of Funding
All New York State School Districts, 1944-45 to 2007-08 (estimated)
55%
NY State School Funding
Share Including STAR
NY State Aid50%
US Avg State Share

45%

40%

35%

30%
44-45 48-49 52-53 56-57 60-61 64-65 68-69 72-73 75-76 79-80 83-84 87-88 91-92 95-96 99-00 03-04 07-08

Source: New York State Education Department ST-3 filings, 2007-2008 revenue estimates by Commission Staff using data from
SED, Office of Real Property Services and Division of Budget.

30

While the State's percentage share of total school funding
While the State's
is below average, the State’s contribution in dollars is inpercentage share of totalfact relatively high. New York State spent $7,241 perschool funding is below
pupil in 2005-06, 44 percent above the national average
average, the State’sof $5,018 per pupil. 12 New York State spending per pupil
contribution in dollars is in
is lower than that of only Hawaii, Vermont, Delaware
fact relatively high.
and Minnesota – states that are either small, or which do
not rely heavily on local funding for schools. Thishighlights a seeming contradiction: nationally, New York's per-pupil support of schools is thefifth highest, and yet its share of total school funding is lower.
In other words, high per-pupil spending by school districts has tapped both local and State
taxpayers. Even with the State’s considerable investment in education, the school funding burden
has fallen disproportionately on local property taxpayers. Comparative state data are not recent
enough to take into account the 23 percent increase in state aid from New York State over thelast two years. This commitment both increases State dollar funding and to some degree increase
the State’s share of total funding.

4. State funding growth had not – until 2007 – kept pace with higher
expense growth.
When funding from the State does not grow at the same rate as school district expenditures,property taxes generally rise, sometimes dramatically, to cover the difference. This can be seenin the table below, which looks at growth rates covering four-year periods through 2005-06, andthen annually through 2007-08.
The following table incorporates expense growth data discussed previously in this section, but
adds four additional elements: State funding, local funding, the Consumer Price Index (CPI), andstudent enrollment data.

12

State comparison data from the U.S. Department of Education, National Center for Education Statistics.

31

Growth of School Funding and Expenses in New York
Compound Annual Growth Rate

Annual Growth Rate

1994-95 to
1997-98

1998-99 to
2001-02

2002-03 to
2005-06

2006-072007-08(estimated)

Expense

3.7%

6.0%

5.7%

6.0%

6.6%

State Funding

4.0%

11.6%

3.5%

7.3%

10.0%

Local Funding

4.0%

1.1%

7.8%

7.7%

4.3%

CPI

2.7%

2.5%

2.5%

3.2%

4.2%

1.1%

0.8%

(0.3)%(0.5)%(0.4)%

Pupils

Source: State Education Department ST-3 filings, U.S. Bureau of Labor Statistics,
2007-08 Commission on Property Tax Relief Staff estimate

In the initial four-year period, 1994-95 to 1997-1998, overall school expense growth was amodest 3.7 percent, and State and local funding both grew 4 percent. This four-year period was aperiod of moderate CPI growth – 2.7 percent and very modest pupil growth – about 1 percent.
But in the second four-year period, 1998-99 to 2001-2002, overall school expense growth
jumped to an average of 6 percent. State funding grew sharply – 11.6 percent a year. Local
funding increased only modestly – about 1 percent per year.
In the third four-year period, 2002-03 to 2005-06, overall expense again grew by nearly 6
percent, but in these years State funding growth dropped significantly – to only 3.5 percent a
year. With expense growth at 6 percent, local funding from property taxes had to make up theshortfall – increasing an average nearly 8 percent a year.
Since that time, expense growth has risen to 6.6 percent annually. Note that pupil growth has
stopped entirely and is declining slightly.
The Commission notes that the four-year period with 11.6 percent growth in state funding
coincides with the implementation of the STAR program. STAR provides an exemption thatlowers homeowner school property taxes. For every dollar of the reduction paid to a homeowner,
the State pays a dollar to the school district to compensate for lost revenue.
When STAR was initiated in 1998 it no doubt contributed to the four-year moderate growth inlocal funding of only about 1 percent; however, the mitigating effect on local taxes appears tohave been very short-lived. In the final four-year period beginning in 2002-03, STAR payments
grew 6 percent, but local funding grew by almost 8 percent. This high local funding growthwould not have resulted if overall expense growth had been closer to the earlier average growthof 4 percent. The last two years (2006-07 and estimates for 2007-08) show a return of higher
state funding growth with no abatement of expense growth.
32

School district revenue growth on an annual basis is presented in the following chart. The chartshows total State funding (including STAR), state aid alone, and local support. The relationshipbetween State funding and local support can be seen on a year-by-year basis.

School District Revenue Growth
School Districts Outside of New York City, 1993-94 to 2007-08 (estimated)
16%
Local Revenue

14%

Revenue from State Including STAR
State School Aid

12%
10%
8%
6%
4%
2%
0%
94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08e-2%
Source: State Education Department ST-3 filings.

Thus, the interplay between expense growth and funding
The Commission views
growth from local and State sources explains the recent
underlying expense
high growth of property taxes. The Commission notes thatgrowth as the key towith the increased State aid provided over the past two
managing property tax
years, the growth in property taxes has slowed. However,growth. Unlessthe Commission views lower expense growth as the key tounderlying expenses aremanaging property tax growth. Unless underlying expenses
managed, there can be nolong-term permanent
are controlled, there can be no long-term permanent relief.
relief.
The State’s commitment to adequate and consistent statefunding for schools – both progressive payments for thelowest wealth and greatest need areas, but also basic funding for all schools – provides the otherelement for property tax moderation.

33

Major School Expense Drivers
Expense Categories
School districts have well-known expense drivers, and testimony was heard from across the State
about how intractable some have proven to be. The largest, of course, is salaries and benefits, butthere are other major categories of expense, including transportation and energy, special
education, BOCES and other administrative expenses.
The chart below shows the major categories of 2006-07 expenses for school districts outside of
New York City. The “other expense” category includes contractual, purchased goods andservices, tuition, BOCES, capital and equipment. The Commission notes that salaries andbenefits constituted over 70 percent of school district expenses. In addition to the categories for
direct salary and benefits, other categories of expense, such as payments to participate in
BOCES, may also incorporate substantial amounts for salary and benefits.
In this section, the Commission reviews its findings about these expense drivers.

Expense Mix
Excluding New York City School Districts, 2006-07
Debt
Service6%

Other
Expense23%
Salary51%

Benefits
19%

Personnel Costs are 70% of
Total Expense

Source: State Education Department ST-3 filings.

34

Growth of School District Expense in New York1
Compound Annual Growth Rate

Annual Growth Rate

1994-95 to
1997-98

1998-99 to
2001-02

2002-03 to
2005-06

2006-072007-08(estimate)

Total Expense

3.7%

6.0%

5.7%

6.0%

6.6%

Salaries2

4.0%

5.6%

3.5%

4.3%

Unavailable

Healthcare

4.5%

10.4%

11.4%

7.2%

Unavailable

Pension(16.2)%(18.3)%

65.4%

10.1%

Unavailable

Debt Service

7.7%

12.7%

3.7%

8.6%

Unavailable

4.7%

5.8%

5.4%

7.7%

Unavailable

n/a

3.3%

11.2%

7.7%

Unavailable

Pupils1.1%

0.8%(0.3)%(0.5)%(0.4)%

Expense Per Pupil

2.7%

5.2%

6.0%

6.6%

7.0%

All OtherSpecial Education

3

1. NYS School Districts excluding New York City, except Special Education. 2. Salary Expense does not reflect the growthof individual salaries; see discussion below. 3. Special Education is limited to Instructional Expense, and includes New York
City. Source: State Education Department ST-3 filings; 2007-08 CPTR Staff estimate

Salaries
Education is a labor intensive undertaking, and people are the key ingredient. Classrooms need
qualified teachers and aides. Teachers perform an enormously important and difficult job. They
deserve fair levels of compensation, as do well-educated professionals in other fields.
The Commission notes the increases in teachers’ salaries over the past 25 years, made possibleby additional State and local funding. In the 1980’s, the Legislature made a policy decision toraise teacher compensation in an effort to attract more people to the profession and raise
standards. Once considered underpaid, teachers outside New York City now receive acompensation package that is highly competitive in the job market, particularly when generous
fringe benefits are taken into account.
In addition, important support is provided by other staff such as bus drivers, lunch workers,
custodians, special education tutors, nurses, principals, and school administrators. All play a role,and that role is very expensive. As noted above, salaries and benefits constituted fully 70 percent
of school district expenses. Thus changes to labor costs have the greatest impact on total school
district expenses.
The Commission analyzed staffing levels – the number of people employed by our school
districts – and found a higher than expected growth in staffing, given flat student enrollment.
35

Staffing levels have increased outside of New York City, while student enrollment has declined.
From 2000-01 to 2006-07, the number of teachers increased by about 5,000. 13 Non-teaching
personnel increased by about 2,400. Student population declined over this period by about
18,000 students or 1 percent for the period. Thus, staffing levels have increased approximately
0.6 percent a year for teachers, and 0.8 percent a year for all staff, at a time when enrollments
were declining.
Analysis of State Education Department data shows that typical salary increases for individual
teachers year-to-year are in the range of 5.5 to 11.0 percent. Since 1993-94, the total amount ofsalaries paid rose 4.4 percent a year (compound annual growth rate). This average growth rate ofsalaries is affected by changes in seniority and educational levels of instructional staff. The
Commission examined the effect that retirements have had on the mix of junior and moreexperienced teachers. It found that average school district teacher salary expense has, in recent
years, been lowered because a large number of experienced high-paid teachers are retiring andbeing replaced with lower paid teachers. Absent the impact from an above-average number ofretirements, it is estimated that teacher salary growth for school districts could be approximately
2 percent higher. As teacher retirements taper off in future years, school district salaryexpenditures will increase.
Salaries for New York State teachers are higher than those in other states, according to a
National Center for Educational Statistics survey. 14 The average teacher in New York earned$58,873 in 2005-06, the latest period available for comparing New York to other states. While
the Commission recognizes that a higher cost of living in New York is a contributing factor, thisaverage salary is 17 percent higher than the national average of $50,379. To compare salaries
within New York, the 2006-07 statewide median teacher salary outside of New York City was$59,594. By major region, the median was $77,298 for Long Island, $73,731 for Mid-Hudson,
and $59,094 for New York City.
Teachers are paid according to salary schedules established through collective bargaining. As
illustrated in the following table, the salary schedules include both horizontal “steps”
representing years of experience, and vertical “lanes” representing levels of academic attainment.

13
14

New York State Department of Education BEDS data.
National Education Association, Estimates of School Statistics.

36

New York State 50th Percentile Salaries for Teachers
2000-01
50th Percentile Salary

2006-0750th Percentile SalaryExperience

Bachelors

Masters

Doctorate

Total

Bachelors

Masters

Doctorate

Total

1 Year
2 Years
3 Years
4 Years
5 Years
6 Years
7 Years
8 Years
9 Years
10 Years
11-15 Years
16-20 Years
21-25 Years
26-30 Years
31-35 Years
36-40 Years>40 Years$31,910$32,549$33,187$33,825$34,463$34,742$35,755$36,178$35,480$35,929$37,118$43,924$50,795$57,199$61,730$63,389$61,123$36,045$36,684$37,322$37,960$38,823$39,890$41,749$43,329$43,828$45,344$48,152$52,290$57,661$64,000$67,932$69,381$67,291$40,180$40,819$41,457$42,095$43,016$45,336$49,760$52,287$52,287$52,287$55,155$59,743$70,000$70,000$70,000$70,200$70,200$32,549$34,000$36,045$37,925$38,598$39,890$42,638$44,280$45,625$47,740$51,020$56,425$62,887$69,525$70,000$70,000$70,000$41,172$43,799$44,161$44,802$44,802$45,352$45,948$46,791$48,044$45,948$50,974$56,975$62,606$70,681$67,374$79,810$74,564$45,586$49,130$49,492$50,133$50,683$51,279$51,279$52,245$53,375$53,375$55,180$61,888$66,909$71,830$75,411$80,188$83,917$51,834$54,461$54,823$55,464$56,610$58,473$63,808$67,637$67,637$67,637$72,305$77,249$86,089$90,472$90,472$90,472$90,472$41,172$43,799$47,604$50,133$50,683$51,279$53,375$56,201$59,049$62,306$64,786$71,000$77,249$81,220$82,777$87,315$87,818

Average$33,453$48,152$66,600$51,020$43,799$55,356$ 77,249$59,554

Source: New York State Education Department

Teachers generally receive a raise for each additional year of experience, until the last step isreached. Further compensation can be achieved for academic attainment (e.g. receipt of amaster’s degree). Thus, teachers have the ability to make simultaneous vertical and horizontal
moves, which can significantly increase their salaries. In addition, the “step” and “lane” amounts
are usually increased annually under the terms of the negotiated agreement. In recent years, suchannual increases have been in the 2 to 3 percent range.
How an individual teacher’s salary is affected through experience and additional education canbe seen on the table above. For example, a teacher fresh out of college with a bachelor’s degree
started at an average salary of $31,390 in 2000-01. If that teacher earned a master’s degree(which is prerequisite for certification) within two years and also advanced in annual steps, in
2006-07 that teacher’s salary would be $51,279.

37

Benefits
Benefits have the largest
growth factor of any
expense category. In 199394, benefits were 29
percent of salary expense.
Benefits averaged 38
percent of salary expense in
2006-07.

This section reviews how the cost of benefits has risen
faster than other expenses in recent years.

Benefits, consisting primarily of health care andpension programs, have the largest growth factor of any
expense category. Benefit expense is best understood asa percentage of salary expense. Benefits in 1993-94
were 29 percent of salary expense. Benefits averaged
38 percent of salary expense in 2006-07. Thus, if a
district hired an employee at a $50,000 salary, an additional $19,000 had to be budgeted for a
total $69,000 to cover the full expense associated with that employee.
Similar to national trends, health care expense in New York has risen the most, increasing at acompound annual growth rate of 9 percent since 1993. Benefits costs are high in New YorkState. Total benefit expense for school districts outside of New York City reached $5.9 billion, or
19 percent of total school district expense in 2006-07. In that same year, health care represented
51 percent of benefit expense, pension represented 22 percent and other benefits (primarily social
security and workers’ compensation) accounted for 27 percent.
Benefits as a Percentage of Salary
School Districts Outside of New York City, 1993-94 to 2006-07
40%
38.0%
37.1%

35%

30%

34.6%

30.2%
29.4%

28.6%

28.1%
27.1%

27.1%
25.0%

25%

24.6%
23.4%

23.7%

23.9%

20%

15%
93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07
Source: State Education Department ST-3 filings.

38

As the following chart shows, all benefit categories have grown in cost over time, but the growth
curve has trended upward in recent years.
Benefits Expense
School Districts Outside of New York City, 1993-94 to 2006-07
$7 B

$6 B

Other Benefits
PensionHealthcare

$5 B

$4 B

$3 B

$2 B

$1 B

93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07
Source: State Education Department ST-3 filings.

39

The cost of health care has grown more than that of any other benefit. For school districts outsideof New York City, health care costs increased 192 percent between 1993-94 and 2006-07, or at acompound annual growth rate of almost 9 percent. The cost of pensions increased 81 percent orapproximately 5 percent annually. The cost of other benefits increased 82 percent orapproximately 5 percent annually. The following chart illustrates the growing cost of health carebenefits.
Healthcare Expense
School Districts Outside of New York City, 1993-94 to 2006-07$4.0 B

16%
Healthcare Expense$3.5 B

Annual Growth of Healthcare
Expense14%$3.0 B

12%$2.5 B10%$2.0 B8%$1.5 B

6%$1.0 B4%$0.5 B2%-0%93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07

Source: New York State Education Department ST-3 filings.

There are some factors driving health care cost increases generally, such as significant growth inspending on pharmaceuticals. In 2006, private group health insurance for employers nationally
represented 7.2 percent of total compensation. By comparison, New York school district
payments for health benefits were 11.4 percent of total compensation. 15 The Commission notesthat costs for health care benefits provided to retired employees are included in calculating thetotal health care cost paid by public employers in New York.
Pension contributions are another significant school district expense. Outside of New York City,
the New York State and Local Employees’ Retirement System administers pensions for noninstructional school district employees, while teachers’ pensions are administered by the New
York State Teachers’ Retirement System. Pension contributions by school districts fell

15

Kaiser Family Foundation, Wages and Benefits: A long-term View, Snapshots: Health Care Costs. February 2008.

40

dramatically in the late 1990s. At that time, contributions were eliminated for some pension
system members. In the current decade, pension contributions for school districts outside of New
York City went from a low of $157 million in 2001-02 to a high of $1.3 billion in 2006-07. This
resulted in a compound annual growth rate of 52 percent over five years. The Commission notes,
however, that over the entire period of 1993-04 to 2006-07, the annual growth in pensions, on
average, has been 4.7 percent, relatively consistent with the 4.4 percent growth in salaries.
Pension Expense
School Districts Outside of New York City, 1993-94 to 2006-07$1.4 B

125%
Pension Expense$1.2 B

Annual Growth of Pension
Expense100%$1.0 B75%$0.8 B50%$0.6 B25%$0.4 B0%$0.2 B

-25%

-

-50%
93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07

Source: New York State Education Department ST-3 filings.

Stock market performance is the primary explanation for the wide swings in pension expense
growth. During the late 1990s, high returns on investments translated to lower school district
contributions to the pension system. Beginning in 2002, pension contributions increased
dramatically to balance large declines in market performance. Increases in staff levels, and themagnitude of salary increases also affect the contribution rate of growth. Significantly, benefit
enhancements enacted in 2000, including the elimination of contributions for many employees,
also had an impact.

41

Other benefits, including social security payments and workers’ compensation insurance,
comprised 27 percent of all benefit expenses in 2006-07. This expense category has grown as
well, with a compound annual growth rate of 4.7 percent from 1993-04 to 2006-07 for a total
increase of 82 percent during that period.
Other Benefit Expense
School Districts Outside of New York City, 1993-94 to 2006-07$1.8 B

10%
Other Benefits Expense$1.6 B$1.4 B

Annual Growth of Other
Benefits Expense

9%
8%
7%

$1.2 B

6%$1.0 B5%$0.8 B4%$0.6 B3%$0.4 B2%$0.2 B1%0%93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07
Source: New York State Education Department ST-3 filings.

Special Education
Almost all representatives of school boards and school district management who testified to theCommission, as well as many academic experts, pointed to the growing costs of compliance withextensive federal mandates under the Individuals with Disabilities Education Act (IDEA) and theAmericans with Disabilities Act (ADA), and with requirements established by the State that go
beyond the federal requirements.
Instructional cost per pupil for special education is substantially higher than for the general pupil
population. According to the most recent State Education Department data, instructional
expenditures were $9,494 per pupil for general education, and $23,898 per pupil for special
education in FY 2006-07. The total instructional spending for all general education was $26.1
billion for 2.7 million pupils and $9.7 billion for 405,309 special education pupils.

42Other School Expenses and Debt Service
This section reviews non-personnel expense factors, that is “other expenses” and debt service.
These expenses include operations, capital, fees for BOCES participation, and tuition for out-of­
district education. Including debt service, these other expenses accounted for 30 percent ofschool district expenses in 2006-07, and their cost has grown at an annual compound rate of 6.1
percent since 1993.

Operating Expenses
Operating expenses include items such as the costs of textbooks, equipment, software, materials
and supplies, and contractual and other services. Between 1993-94 and 2006-07 operating
expenses increased by a compound annual growth rate of 5.4 percent, or 98 percent over that
period. By 2006-07, these operating expenses accounted for about 65 percent of the otherexpenses category, excluding debt service, and 15 percent of total expenditures.

Transportation and Energy
All school districts are required by law to provide a certain level of student transportation
services. Transportation costs for all New York school districts totaled $2.5 billion in 2006-07.
Transportation expense has risen 5.1 percent annually for school districts outside of New York
City from 1993-94 to 2006-07. The magnitude of these transportation costs is increased by thelarge number of school districts that exist in New York State that provide transportation services
separately. Some of these school districts, especially those that are smaller, are not able to benefit
from economies of scale, and more efficient plotting of routes.

BOCES
Boards of Cooperative Educational Services (BOCES) were established in the late 1940s in
response to the need to provide an efficient and effective means of delivering educational
services to rural districts. There are now 37 BOCES that provide both educational and noninstructional services on a regional basis to all but nine of the school districts in New York State.
The dependent city districts of New York City, Yonkers, Syracuse, Rochester and Buffalo are
not eligible for BOCES membership. The services provided by each BOCES vary but generally
include career and technical education, services for students with disabilities, itinerant teachers
for certain subjects, programs for adults, and “back-office services” such as payroll
administration, human resources and employee benefit coordination, cooperative purchasing, andbusiness office operations.

43

BOCES expenditures, which include indirect payments for salary and benefits, were 6 percent of
total expenses in 2006-07. BOCES expenses grew from $904 million in 1993-1994 to $1.8
billion in 2006-07. This is a compound annual growth rate of 5.6 percent and an overall growthof 104 percent.

Capital Expense
According to the U.S. Census Bureau Annual Survey of Local Government Finances, New
York’s public school districts spent almost $4 billion on capital outlays and other expenditures in
2005-06. The bulk of that money, $3.4 billion, went to construction projects, almost $84 million
went to projects related to land and existing structures, and equipment costs accounted for almost$507 million. New York school districts face rising construction costs. From 2000 to 2007, thecost of construction material throughout the nation rose more than 40 percent, and the cost ofsuch critical materials as structural steel and concrete continues to rise.
In addition, many New York school districts, including the Big Five city school districts, haveseveral school facilities nearing the end of their lifespan. The New York State Comptroller's
report, Financing Education in New York’s “Big Five” Cities (May 2005), noted that theseschool districts use some of the oldest school buildings in the State, with an average building ageof more than 55 years (50 years is considered a reasonable maximum lifespan for schoolbuildings).

Debt Service
Local governments and school districts borrow money to finance construction projects, purchasevehicles and equipment, and maintain adequate cash flow for district operations. For districts
outside of New York City, debt service payments, counting both principal and interest, grewfrom $684 million in 1993-94 to $1.9 billion in 2006-07. This is a compound annual growth rateof 8 percent. According to the New York State Office of Comptroller, four of the Big Five cities
in New York had exhausted more than 70 percent of their constitutional debt limits in 2005-06.
Building aid from the New York State Education Department plays a significant role in thefinancing of construction, renovation, modernization, and expansion of public schools. In 2008­
09, building aid is budgeted to be just over $2 billion, with an additional $109 million budgeted
for debt service on state issued bonds that fund the EXCEL aid program for New York City.

44

Broader School Expense Drivers
Many Small School Districts
There are approximately 700 school districts in New York State, ranging in size from New York
City to districts with fewer than eight teachers. Far too many are quite small. About 200, or
approximately 28 percent, had fewer than 1,000 students in 2006-07, and over 500 have fewer
than 3,000 pupils. Small districts are not limited to rural areas. On Long Island, where there arealmost a half million pupils, over one fifth of the more than 120 school districts have fewer than
1,500 students, with an average district size of under 800 students.

Source: New York State Office of Real Property Services, 2008.

New York State's fragmented structure for delivering elementary and secondary education issomewhat comparable to the educational systems in other large states such as California, Texasand Illinois. These states rank high in terms of total number of districts and number of districts
with fewer than 1,000 students, with New York having one of the lowest average school district
45

sizes of the large states. In comparison, Florida's system of countywide school districts includes
only 67 districts, and school districts in that state, and in Maryland, North Carolina andVirginia, which also rely exclusively or extensively on countywide school districts, averageapproximately 40,000, 36,000, 12,000 and 9,000 students respectively.
70 percent of New Yorkschool districts saw pupil
enrollments decline orremain the same.

From 2005-06 to 2006-07, 70 percent of New York school
districts saw pupil enrollments decline or remain the same.
Recent trends suggest that this pattern of declining student
enrollment can be expected to continue.

If districts with fewer than 1,000 students were consolidated, as recommended in this report, theCommission estimates that the number of districts could be reduced considerably. Larger
districts can take advantage of economies of scale and administrative and operational
efficiencies. In addition to these financial benefits, the New York State Education Department’s
guide to reorganizing school districts suggests that merging smaller districts to create larger
districts provides an “increased pupil and financial base” that allows the larger district to increase
subject offerings (e.g., multiple languages andI would leave you with one
advanced placement) and increase the number ofquestion. What if we had 62
sections in a specific subject area to meet student
school districts…?
needs. Larger district size also increases thelikelihood that teachers will teach only their specialty- Robert Bennett, Chancellor, New
and that specially equipped classrooms for specificYork State Board of Regents
subjects can be provided.

Waste, Fraud and Abuse
Finally, there are the incremental expenses added through fraud, waste and abuse. Without
question, the majority of school administrators and trustees take their fiduciary responsibilities
seriously. Yet reviews by the Office of State Comptroller (OSC) as well as media reports acrossthe State, have documented cases of wasteful practices, and even some cases of fraud and abuse.
These instances have not only eroded the public’s confidence in the management of school
districts, but have also resulted in expenses – in some cases totaling millions of taxpayer dollars– being added to school district bottom lines.
Among the more egregious examples was a case on Long Island where the superintendent andassistant superintendent for business processed payments outside the normal flow of transactions.
This resulted in more than $11 million in district funds being used for personal expenses ofschool officials and 26 other individuals. The OSC also identified problematic spending totaling
more than $3 million due to lack of proper controls in another Long Island school district.

46

Examples in upstate New York include one district’s former business manager awarding himself
an amount exceeding $100,000, and another instance where two district officials received over
$200,000 in questionable salary-related payments and leave benefits. All such incidents castshadows over how administrators manage school districts and taxpayers’ valuable resources. In
addition, board members and administrators, while largely well-intentioned, often times are notfully familiar with the breadth of their internal control and fiduciary responsibilities.
The School District Accountability Initiative of the Office of the State Comptroller (OSC),
introduced in 2005, identified clear guidelines for individual school districts to improve theirfinancial operations and fiscal accountability. Focused primarily on strengthening internal
controls, this five-point plan included the following:
•
•
•
•
•

Strengthened internal claims auditor function to require that the internal claims auditor
report to the director of the school board.
School board financial oversight training is now required for all board members elected
or appointed after July 1, 2005.
More rigorous external audit standards to require both an annual audit report directly tothe school board and that the board prepare a corrective action plan in response.
New internal audit requirements that include developing, annually updating and reportingon a risk assessment of district operations.
Audit committee required to assist school boards with financial oversight responsibilities,
including selecting and overseeing external and internal auditors and implementing
necessary corrective reforms.

This OSC initiative has already succeeded in bringing about significant reform and enhancing
the business operations of school districts. A number of school districts voluntarily implemented
all aspects of the five-point plan before new laws were enacted. Many districts chose to expand
the audit committee membership beyond existing board members to include professionals intheir communities with financial expertise. Others should consider following suit.
Additional actions worthy of future consideration may include requiring school boards and audit
committees to meet regularly with internal auditors to set up a system to continuously review andstrengthen internal control measures; undertaking a thorough review of qualifications for school
district business officials, possibly requiring greater professional experience in accounting andbusiness management disciplines; and encouraging school districts to adopt corporate models
particularly focused on further strengthening internal controls in areas including purchasing,payroll, contracting of special education services and more broadly in matters related to contract
procurement.

47

The Problem:
Why High Property Tax Growth is bad for New York State
This Commission rejects the idea that all taxes are bad. Taxes not only fund the education of ourchildren – they pay for our parks, our bridges, our hospitals, our universities and many otherfundamentals of a civilized society. Further, the Commission rejects the idea that all property tax
growth is bad. Over time, the cost of goods and services rises in all sectors, and schools are nodifferent.
Our concern is when taxes grow faster than taxpayers’ ability to pay – which has been the casefor too long in New York. As discussed previously, New Yorkers pay some of the highest
property taxes in the nation. The focus of this Commission is high property tax growth – the kindthat results in property taxes that double or more than double – in a ten-year period. We live in aState where this phenomenon is far too familiar.
In fact, the body of evidence before us suggests that
I have zero control over school
we are rapidly reaching our limit; we have thebudgets that are ever increasing
highest property taxes of any large state in theand little control on my income
United States. These taxes have grown 7 percent
aside from taking on a second
annually since 2001. In a recent survey of Long
job. I take that back; I alreadyIsland residents, when asked: “How serious ahave a second job. Am I
problem is high property taxes on Long Island?” 81
supposed to find a third?
percent responded that the problem is “serious” or- Adirondack Homeowner“very serious.” 16 Clearly, our citizens are out ofpatience. Something must be done – now more thanever. The current fiscal climate poses severe challenges not just to governments, but to taxpayers
who are concerned about their personal financial situations. Property tax increases will only add
to the burdens already faced by those individuals.
High property tax growth breaches the basic covenant between homeowners and theircommunity. Homeowners know before they buy a residence that they will need to pay certain
expenses, including property taxes. But do our homeowners realize that their taxes will double ina decade, and is this fair? The Commission believes not.

16

2008: Long Island Looks to the Future: Housing Alternatives and Downtown Development. Long Island Index.
http://longislandindex.org/looking_future.html .

H

H

48

High property tax growth harms many different people in our communities:•

It is bad for the low-income household. Consider the single mother with three children,
working in the service sector, or as an aide. The regressive nature of our property tax
structure is most unfair to her and others like her. Those among us with the lowest
incomes are most likely to pay the highest percentage of their income in property taxes.

•

It is bad for seniors on fixed incomes and fixed budgets. They made the decision, perhaps
many years ago, to buy their home, aware of the obligation to pay property taxes. How
can seniors pay for taxes that double every ten years? This Commission’s answer: It is
unreasonable to expect them to shoulder this burden.

•

It is bad for businesses, especially small businesses. A small business is extremely
sensitive to overhead expense, which includes property tax expenses, paid either directly,
or indirectly through rent. For many businesses large and small, the property tax is thelargest business tax. In contrast to the corporate income tax, a business must pay property
tax even when it is losing money.

•

It is bad for the middle-class wage-earner. These households – made up of the nurses andconstruction workers of our society – rarely see their incomes double in a decade. They
are fortunate if incomes rise 3 to 4 percent every year, while tax growth may equal 7
percent or more a year.

•

It is bad for young families. These households are saving every penny, trying to afford
the home of their dreams in a school district of their choice. Young families are forced
away from too many homes in too many school districts because they have become
unaffordable.

•

And finally, high property tax growth is bad for teachers. At the same time that property
taxes support schools and the teachers who work there, teachers too are finding it hard toown a home, or to balance their budgets when property taxes continue to take a higher
and higher percentage of disposable income.

High property tax growth harms our communities and State because – at the end of the day –people have choices. They can leave New York State, for places with better jobs or a lower costof living or both. Like so many other New Yorkers, members of this Commission decided long
ago that this is a great State in which to raise their family, build their careers and to make theirhomes – and have watched with dismay as New York’s population has decreased and economic
conditions in some areas have deteriorated.

49

Too many people I know have
had to sell their homes andretreat to other states so thatthe can live a decent life andhave the ability to save for theirfamilies’ future.

Indeed, the testimony provided across the State makes
it abundantly clear that families and businesses arealarmed by the cost of their property tax bills, and are“voting with their feet” by leaving the State to escapethis burden. While the Commission recognizes thatproperty taxes are not the only contributor to the highcost of living, they are a significant factor.

- Long Island Homeowner

When examining the challenge of property tax
growth, it is essential to remember the income profileof the State. New York has ranked among the states with the highest per capita income for many
years. But this fact obscures a more complex economic and demographic reality.
There are really two New Yorks: the “downstate” region, which includes the New York City
metropolitan area, lower Hudson Valley and Long Island, and the “upstate” region. The state's
high ranking in terms of income is due mostly to conditions downstate. In contrast, upstate cities
and their surrounding areas have been losing industries, jobs, and population for many decades –nearly a quarter-million people left New York for other states in 2006 alone. Seventy percent of
all school districts have declining enrollment. Absolute population declines would have become
an overwhelming trend had it not been for a steady influx of immigrants. However, theseimmigrants settle predominately in the downstate area, where job possibilities are better, with arelatively smaller proportion choosing to settle upstate.
Perhaps one of the best summary indicators of the regional divergence is median home values.
The median home in the New York City metropolitan area counties is worth over $400,000. In
contrast, the median home value in 25 of the 50 upstate counties is less than $100,000.
Downstate, the dollar amount of taxes paid is the highest in the nation
High property tax growth is bad for downstate. The average income is high, but extreme wealthis a neighbor of extreme poverty. And while the middle class is strong, it does not have thewealth that the averages may imply. The range of income is key.
The Commission heard testimony from many downstate who complained of their property taxes
doubling in a decade. In other words, a property tax bill that was $9,000 escalated to $18,000
over a ten-year period of time. An investment banker, who lives in a New York suburb earning$400,000 per year, may be able to absorb such an increase. But, for a teacher or nurse who earns$80,000, a tax of $9,000 represents 11 percent of gross income – almost unbearable. A tax of$18,000 represents 22 percent of gross income – beyond reason.

50

Upstate, the tax rates are the highest in the nation
High property tax growth is bad for upstate. Upstate, the median home value is far below themedian home value downstate. And in some counties, for example Allegheny, the median value
is around $50,000.
High property tax rates upstate are the result of low property values and declining tax bases. The
Commission heard testimony that high tax rates depress property values. 17 For example, when a
tax amounts to more than 2 percent of the market value of a property, the property’s appreciation
may be decreased by at least 2 percent a year. High tax rates are a clear disincentive tobusinesses, making the task of attracting new jobs more difficult. Some upstate communities
have resorted to increasing property tax rates on non-residential property, which further inhibits
job creation. However, real progress cannot be made until property tax growth rates are
restrained, rather shifted to others.
SummaryHigh property tax growth harms the State. Whether you are a senior citizen on a fixed income, asmall business struggling to pay the rent, or a two-income household economizing to make ends
meet, high property tax growth is a major destabilizing force for citizens of this State and for thecommunities in which they reside. Upstate, property values have grown slowly, perhaps
restrained by property tax growth. At the same time property tax increases may limit peoples’
ability to live in the house of their choice. Downstate, where property values have increased
dramatically, consequent property tax increases are forcing people out of their homes.

17

McMahon, E.J. Director, Empire Center for New York State Policy. Testimony before the New York State
Commission on Property Tax Relief. 12 Feb. 200851

Part III
Recommendations

“It is always harder to change than to hold to the status quo. But with the economic challenges New
York faces, doing nothing is no longer an acceptable answer. We need to find ways to tip the balance infavor of efficiency.”- Stan Lundine, former New York State Lieutenant Governor; Chairman – New York State
Commission on Local Government Efficiency and Competitiveness

Recommendations: Property Tax Cap

Property taxes in New York State are too high, and have increased over recent years at a rate thatis unduly burdensome to all New York property taxpayers. Those New Yorkers who are most in
need, and those who live in school districts facing special challenges in ensuring that students
receive an adequate education, may be particularly overwhelmed by high property taxes.
There are only three options for addressing the issue of the growth in school district budgets: 1)
decrease expenditures; 2) increase state aid to education; or 3) continue to increase property
taxes. The Commission has concluded that the growth of property taxes must be constrained.
For this reason, as a first and essential remedy, a school property tax levy cap must be enacted.
We recognize that this restraint on growth of property taxes collected by school districts will
require tough choices. It will require the discipline necessary to reevaluate and adjust spending
decisions by both the State and school districts, in accord with the core charge given to thisCommission under the Governor’s Executive Order – to find a method of limiting property tax
growth that does not compromise educational quality. The cap on the annual growth in amounts
collected through school property taxes that this Commission believes to be essential would notpreclude levy growth. Rather, it would raise the bar of voter approval required for levy growththat exceeds the cap.

New York Property Tax
New York’s property tax is very old, dating back to as early as 1654 when New York was still a
Dutch colony. It remains to this day the primary funding mechanism for thousands of local
government units across the State. In local government fiscal years ending in 2007, the property
tax raised over $41.2 billion in revenue, including over $26.3 billion for schools. 18
A distinctive feature of the property tax is that the tax rate is not fixed in statute. Rather, local
governments first decide on spending needs, and then set a rate that will result in collection of
the desired tax levy. Other taxes, such as income or sales, have statutorily fixed rates. The

18

New York State Office of the State Comptroller. 2007 Overall Property Tax Levies and Assessments.

52

amounts that such taxes yield rise and fall with the economy, and government spending must
adjust to reflect economic conditions. In contrast, the lack of a fixed rate for the property tax
means that there is no automatic “fiscal brake” on tax levies – which can and often do increaseduring periods when weak economic conditions make them less affordable.
The financial strain that property tax obligations create for many people is not a newphenomenon. The basic underpinning of the property tax was that property wealth indicatesability to pay. This equitable concept was certainly the case far back in history, although not asclear-cut today. However, the tax is paid out of income rather than property wealth. As a result,since the early years of the tax, policymakers also have reduced the property tax burden on
certain classes of taxpayers deemed to need some degree of relief.
The most common type of tax relief is the property tax exemption, which exempts all or a
portion of the assessed value of a parcel from the property tax. This, in essence, shifts the tax
burden to remaining property taxpayers. Exemptions are granted on the basis of many different
criteria, including the use of the property, the owner’s ability to pay taxes and the desire of thegovernments to encourage certain economic or social activities. Property can be either wholly
exempt, such as a church, or partially exempt, such as the residence of a veteran. Similarly,
exemptions may be applicable to certain taxes, such as a town tax, but not for others, such as
school tax.
A second and more recent type of tax shifting device shelters one class of taxpayers by placing
the burden on a state-level funding source, such as state income and business taxes. The STAR
(School Tax Relief) program is an example, as are tax “circuit breakers.” These efforts to shift
the tax burden do not result in a reduction in the total amount of property tax collected, orconstrain its growth. Instead, the portions for which individual taxpayers are responsible areadjusted, and the burden for those payments is shifted onto state taxpayers.

Property Tax Caps in New York and Other States
In contrast to the types of relief already discussed, property tax caps seek to limit the aggregate
amount of the tax collected. The first property tax caps were enacted in New York State in 1884by constitutional amendment, restricting the property tax rate for county and city purposes to 2
percent of the assessed valuation of real and personal property, while also limiting debt.
In 1953, the Constitution was amended to set New York City’s combined property tax rate forcity and county purposes at 2.5 percent, and to allow voters to increase their school district’s tax
limit by one quarter of one percent annually. Under a 1985 constitutional amendment, tax caps
were eliminated for school districts within cities having fewer than 125,000 residents. These caps

53are not relevant to most municipalities and, as documented elsewhere in this report, they havenot been effective in constraining property tax growth.
We identified four broad types of tax caps that exist in other states: (1) assessment caps; (2)expenditure caps; (3) tax rate caps; and (4) tax levy caps. Under the charge of the Executive
Order the Commission finds the tax levy cap far preferable.
Assessment caps limit the growth in the assessed value of a home, but not the tax rate applied

to that assessment. Assessment caps are used in some states, but are ineffective in limiting tax
growth unless they are also accompanied by rate caps. For example, Nassau County has a limiton the percentage change in assessed value of properties, but still has some of the highest
property taxes in the nation.
Expenditure caps limit the total spending of a government unit, regardless of the source offunds. Applied to schools, an expenditure cap would limit total expense growth, even if fundedby state or federal sources, and would not necessarily limit school property tax growth. An
expenditure cap would not be suitable, given the Executive Order’s commitment to provision ofa quality education to all students.
Tax rate caps limit property taxes to an established percentage of the property’s assessed value.

Currently, there is wide variation in tax rates for school districts in New York, ranging from ahigh of 3.9 percent of the market value of property to a low of 0.2 percent. This range makes a
tax rate cap unworkable in New York, unless increased funding is provided by the State for the
predominantly lower wealth districts that would be above the rate cap.
Levy caps limit the amount by which the total property tax can increase from year to year. Thisis the only tax cap that is effective in limiting the growth of total property taxes for a given
municipality or school district. It was explicitly mentioned in the Executive Order, and was afocus of the Commission’s deliberations.
According to the National Tax Journal, whichsurveyed the continental 48 states in 2006, 43
states have some form of limitation on real
property taxes, with a number of states employing
multiple types of caps. Only Maine, New
Hampshire, Tennessee, Vermont (which has only
a state property tax) and Virginia have no local
property tax limitations. Twenty-nine states havea local property tax levy cap, and at least 15 allow
voters to vote to lift temporarily, or override, thisA workable cap on the growth ofschool and property taxes isabsolutely critical to end the outof control growth that has driven
our tax burden into thestratosphere.
- David Duerr, Executive Vice
President of the Greater Syracuse
Chamber of Commerce54

cap. Thirty-four states, including New York, employ a tax rate cap. Twenty states, including
New York, have some form of cap on assessed values. In New York, these caps apply only in
New York City and Nassau County.

Massachusetts and California – starkly contrasting experiences
The Commission carefully analyzed the experiences in several states, including the peer states of
Massachusetts, Illinois, California, New Jersey and Michigan. After the initial review, theCommission focused on Massachusetts, based on the state’s proximity to New York, the lengthy
period since a cap was enacted (during which much data has accumulated), and similarity inschool funding mandates.
“Proposition 2½” was enacted in 1980 in response to the level of property taxation in
Massachusetts, among the highest in the nation. Proposition 2½ is both a levy cap and a rate cap.
The property tax levy cannot increase by more than 2½ percent annually, plus additions to thetax roll from new construction. Amounts less than the levy limit may be reserved and used in a
subsequent year. In addition to the levy cap, Proposition 2½ also imposed a rate cap maximum of
2½ percent, which required a number of municipalities to reduce their taxes in the first years of
implementation, with offsetting state funding increases. (The rate cap is not the focus of thisCommission.)
Public involvement is an important aspect of Proposition 2½, which allows a community toincrease its levy limit through the public override vote, and to reduce the levy by way of a voter
underride. Over the course of 22 years, Massachusetts cities and towns have placed 3,583
override referenda before voters. Approximately 39 percent of the override attempts weresuccessful, based on a simple majority vote. There have been only a few dozen underride votes,
with over half approved.
Proposition 2½ has been successful in lowering the property tax burden in Massachusetts. In thefirst 20 years following the passage of Proposition 2½, the per capita residential property tax
levy dropped 1.6 percent, after adjusting for inflation. Since the enactment of Proposition 2½,
Massachusetts dropped from 3rd nationally in 1977 to 33rd in 2005 on the measure of state andlocal tax burden.
In 1993 Massachusetts instituted a “foundation budget” formula for state funding of schools.
That formula, which is quite similar to the one adopted in New York in 2007, calculates thedollar amount needed for an adequate education by school district and determines the local
contribution to that amount. Since 1993, Massachusetts state aid to schools has increased at acompound annual average growth (on a per capita basis, adjusted for inflation) of 8.6 percent.

55

The relative position of Massachusetts in national rankings of per pupil spending has notchanged since the period before Proposition 2½ was enacted. Massachusetts has consistently
ranked between fifth and seventh among states in per pupil spending, with the most recent
comparable year of 2006 showing Massachusetts spending per pupil at $12,656, ranking seventh
highest among states. During the same period, the state’s share of school spending has risen.
Comparative pupil performance data demonstrate that the combination of Proposition 2½ andstate foundation aid has not negatively affected Massachusetts student performance. The
standard comparisons of pupil performance across states involve national tests in reading andmathematics given to fourth and eighth grade pupils. In 2007, in all four tests – 4th Grade
Mathematics, 4th Grade Reading, 8th Grade Mathematics, 8th Grade Reading – Massachusetts
ranked highest among all states. 19 In contrast, New York test scores are in the middle of the fifty
states on these tests, despite ranking first or second in per-pupil spending. In another comparison,
Massachusetts ranked third among those states where the percentage of students taking the SAT
is at least 40 percent, while New York ranked twelfth.
Whereas the experience in Massachusetts demonstrates that a tax cap can be constructed to lower
property taxes without harming the ability to provide education, California’s experience has
shown that a poorly constructed cap can have significant negative impacts.
California provides a sharp contrast to the experience of Massachusetts. California voters
overwhelmingly approved Proposition 13 in 1978, as a response to rapidly increasing property
taxes. Proposition 13 included both rate and assessment caps. Property taxes are limited to 1
percent of assessed value, the most stringent rate limitation in the nation and one which mostobservers agree is too low to sustain the government services funded by the property tax.
Property assessments were rolled back to their 1976 values and increases in property assessments
were limited to 2 percent per year (properties can be assessed at market value upon resale). By
1981 California’s property taxes had declined from 51 percent above the national average in1978 to 22 percent below the average.
California was unable to sustain funding for local government services through its property
taxes. Local governments became much more dependent on state aid, and also significantly
raised various local user fees. Nonetheless, California has witnessed widespread and major
deterioration of public services – especially education – since enactment of Proposition 13. In
terms of per pupil spending, California went from 11th nationally in 1970 to 38th in 2006. And
while California schools ranked among the highest in the nation in the 1970s in terms of pupil
performance, they now rank among the lowest. In national fourth and eighth grade reading and19

United States, Department of Education, National Center for Education Statistics. National Assessment of
Educational Progress State Comparisons, 2008. http://nces.ed.gov/nationsreportcard/nde/statecomp/H56

math tests in 2007, California’s ranking ranged between 46th and 49th in all four tests – 4thGrade Mathematics, 4th Grade Reading, 8th Grade Mathematics, and 8th Grade Reading. 20

Public Participation
New York requires local voter approval of school district budgets, except for the Big Five city
school districts. If voters twice choose not to approve a budget, a contingency budget is, by law,
adopted by the board of education, which provides for teachers’ salaries and contingent
expenses.
Public opinion polls and testimony before this Commission reflect dissatisfaction with highproperty taxes, although there are high passage rates for school budgets. The Commission on
Local Government Efficiency and Competitiveness estimates that 14.2 percent of enrolled votersparticipated in the May 2006 school budget vote, with participation ranging from 20 percent
enrolled voters in Suffolk County to approximately 10.4 percent in Sullivan County and insouthwestern New York. Moreover, since 1998, when the uniform budget vote date and theSTAR program were introduced, the percentage of budgets passing has been over 90 percent. In
2007, the passage rate reached an all-time high of over 95 percent.
Some view the school voting process in New York as being, effectively, a cap on school
spending as voters have the power to turn down their school district’s budget if it carries toolarge a tax increase. The above numbers, coupled with the findings in Part II of this report, showthat in practice, the school budget voting process has not affected school spending. The
Commission believes that changing the school budget vote from a vote on the budget to a voteon the tax levy would highlight the interconnection of school spending and the property tax.
Moreover, voter complacency shown by low turnouts can be addressed by focusing on themagnitude of increases to the tax levy. When a school tax levy increase is less than the cap, theCommission recommends that a vote need not occur. When a school board does call an override
vote, the importance of that vote is highlighted by its very existence.

20

Ibid.

57

Recommendation: School Property Tax Cap
The Commission recommends implementation of a school property tax levy cap in order tocontrol the unsustainable growth in school property taxes. The proposal includes the following
elements:•

The levy cap would be set at 120 percent of CPI or 4 percent increase,whichever is lower: This is the same formula that applies to the current contingency

budget that goes into effect when school budgets fail to pass. This formula is somewhat
higher than the levy cap in Massachusetts, which is established in law at 2.5 percent, andallows some flexibility for inflation.
•

New construction would be added to the levy limit: The construction of new

homes and businesses, and major additions and renovations of existing buildings expand
the school district's tax base without affecting existing taxpayers. This new growth would
be added to the levy cap each year. In the three years ending in 2007, the median annual
growth from net new construction in New York has exceeded one percent statewide.
•“Banking” unused Levy Cap: If the maximum levy growth permitted under the cap is

not used in a given year, the unused portion would be “banked” and may be used in any
future year to increase the levy by up to 1½ percent. This provides an incentive to save
tax capacity for future years.
•

Separate capital expense / debt service vote: Capital items – either as a one-time

expense or debt service – would continue to be authorized by public vote, and would not
be included within the levy cap. If approved by voters, such exceptions would last until
payment for the capital item is completed.
•

Budget Votes Limited to Overrides: The current school budget voting process

would be replaced by a cap override vote. School districts would not have to submit theirbudgets to the voters in years when the tax levy growth does not exceed the levy cap.
Levy growth in excess of the levy cap would have to be approved by the voters. By not
requiring a vote when the tax levy growth is within the cap, the votes that do take place
will take on a greater significance.
•

State aid growth affects override vote margin: The vote required to override thelevy cap is contingent on state aid growth by district. If the annual growth for a district ofspecified core state aid programs is at least 5 percent in the current year, the vote needed
to override the levy cap would be 60 percent. If annual growth of state aid is less than 558percent, a 55 percent vote would be needed to override the levy cap. 21 This assumes thatstate school aid funding decisions would be reached sufficiently in advance of schoolbudget decisions and the public votes currently scheduled in May.
•

Underride: Voters could place on the ballot an “underride” vote to keep the levy growth

to a level beneath the calculated levy cap.
•

Dependent Districts: The Big Five cities (New York City, Buffalo, Rochester,

Syracuse and Yonkers) have “dependent” school districts within their city budgets. As aresult, Big Five property taxes are not specifically earmarked for education. Thus, theproperty tax cap does not apply to those cities.
In its preliminary report, the Commission recommended the implementation of this property tax
levy cap. Governor Paterson responded by proposing legislation to enact this recommendation.
The Governor’s proposed legislation differs from the Commission’s recommendation inpreserving the right of school district residents to vote on proposed levy increases of less than the
4 percent cap, thereby assuring that all levy increases are subject to voter approval.

Conclusion
It is this Commission’s view that there are only three alternatives for addressing the growth inschool district expenditures: decrease those expenditures, increase state aid to education or
increase school property taxes. The Commission recognizes the overall burden on property
taxpayers and the particular burden placed on low and moderate income taxpayers by theunsustainable growth in such levies over recent years, and believes that property taxes cannot be
increased at current rates.
Over two-thirds of New Yorkers support capping the growth of property taxes. 22 A levy cap, as
proposed by Governor Paterson based on the recommendations of the Commission would be
successful in constraining the growth of school property taxes and will force difficult choices
about expenditures that will be necessary to ensure that there is no negative impact on schools.
The proposed cap is set at a level which allows for reasonable growth of school expenses andwould be adjusted for economic conditions and growth of the tax base.

21

This is not to suggest that 5 percent growth in state aid is adequate for high need districts to provide a sound, basic
education.
22
Siena Research Institute conducted three separate statewide polls in June, July and August of 2008, asking
whether people would support capping property tax increases at no more than four percent per year. Voters
overwhelmingly supported a cap, with results ranging from nearly 3:1 to nearly 5:1.

59

The cap will encourage efficiencies and creative ways to control costs, and will be the “blunt
instrument” needed to force some tough, necessary choices. At no time would district voters beprecluded from increasing school taxes. Proposed increases in the levy cap are subject to a vote,as are proposed overrides, which are tied to growth in state aid. The proposal also includes apetition process for an underride vote. Over time, this constraint on the property tax levy will
make New York a better place to live, work, raise a family and run a business.

60

Recommendations:
Why a “STAR Circuit Breaker” Would be Better than STAR
What is a Circuit Breaker?
It is essential that the growth in the amount of property taxes collected be constrained through acap on tax levies, as discussed in the previous section. Once such a restraint on property tax
growth is in place, the needs of individual taxpayers who may face difficulty in paying theirproperty tax bills could be addressed. The Commission believes that an improved “circuit
breaker” program would provide such targeted relief, while recognizing that it would not force
hard choices that drive spending restraint, nor provide relief to particular groups of deserving
taxpayers, such as small businesses struggling in today’s economy. However, because it
addresses the symptoms of the problem, rather than the problem itself, the Commission believes
that such a benefit should not be enacted until the property tax cap has been instituted.
Conceptually, a circuit breaker shuts off property taxes that exceed a certain percentage of aparticular taxpayer’s income. This section examines individual tax relief by reviewing existing
programs, discusses problems with these programs, and proposes principles for lawmakers toconsider in a comprehensive restructuring of state tax relief programs. Specifically, theCommission recommends that current property tax relief programs, including STAR and thecircuit breaker tax credit be combined and restructured. Existing levels of relief for middle classtaxpayers and those who need it most should continue, and benefits should be expanded tocertain taxpayers through an income-based “STAR Circuit Breaker.”

Current Circuit BreakerIn 1978, during the “property tax revolt” era, New York enacted its current circuit breakerprogram (Tax Law section 606(e)). Under that statute, any resident, including a renter, withincome below $18,000 (for a single filer) is eligible to receive this rebate. Rather than provide an
exemption from the local property tax, this program reimburses that tax by way of a direct credit
to individual taxpayers on the state personal income tax return. The maximum benefit is $375 forseniors and $75 for residents under age 65. Because the circuit breaker is provided as an income
tax credit, it may not be evident to the taxpayer that it is, in fact, property tax relief.
New York’s circuit breaker benefit has not been changed in the thirty years since its enactment.
The income ceiling is currently among the lowest of state circuit breakers (the New Jersey
income ceiling of $250,000 for homeowners is the highest). The maximum benefit in New Yorkis among the lowest nationally (Maine, for example, provides a benefit of up to $2,000).
According to the Department of Taxation and Finance, in 2005 the New York circuit breaker had
approximately 279,000 beneficiaries, of whom the overwhelming majority (91 percent) were61

renters as opposed to homeowners. Total benefits were $29.6 million, which amounted to an
average benefit of only $106.

STAR Programs
By the 1990s, New York’s limited circuit breaker program had shrunk in significance. Publicdissatisfaction with increasing property taxes led to the enactment of the School Tax Relief(STAR) program in 1997. STAR has been expanded and amended several times, most recently in2007 and is now the most broad-based form of property tax relief in New York.
The original STAR benefits– both Basic STAR and Enhanced STAR – are homeownerexemptions, supplemented with state funding. In both cases, a portion of the assessed value of ahome is exempted from the school property tax.
•••

The Basic STAR exemption is available to all homeowners, and exempts the first$30,000 (adjusted annually in higher value and appreciating localities) of the full value of
their primary residence from the school tax;
The Enhanced STAR exemption is available only to seniors (age 65 and older) of limited
income (in 2007 the income cutoff was $67,850), and exempts the first $56,800 (alsoadjusted annually) of the full value of their primary residence from the school tax; andBasic and Enhanced STAR also grant a state income tax credit to New York City
taxpayers, because New York City schools are funded by city income tax as well as
property tax.

In a typical property tax exemption, the burden is shifted to the remaining property owners
within the taxing jurisdiction. With the STAR exemptions, however, the tax reduction for
individual beneficiaries is paid by the State, by way of a direct payment from the state generalfund to school districts. School districts continue to set a tax levy each year, taxpayers pay anamount reduced by the STAR exemptions, and the State pays the difference directly to school
districts as STAR Payments.
In 2006, for a single year, STAR was expanded to create the Local Property Tax Rebate
Program, or STAR Rebate. Under this program, STAR-eligible homeowners paid the property
taxes to local school districts, but the State rebated a portion of that tax by way of a check. The
amount of the rebate was based on the size of the STAR exemption, rather than on income.
There were 3.4 million beneficiaries, and the average benefit was approximately $200.
The STAR rebate was replaced in 2007 by Middle Class STAR, which also took the form of arebate program. However, unlike its predecessor, Middle Class STAR is income-based, with thebenefit phased out as income increases. The phase-out begins at different income levels
62according to region ($90,000 for the upstate area and $120,000 for the downstate area). Middle
Class STAR resembles a circuit breaker, in providing property tax relief based on income.
Today, STAR provides nearly 3.5 million Basic and Enhanced exemptions, on a statewide baseof 5.6 million parcels of property. STAR programs are expected to cost a total of $4.7 billion
under the 2008-09 Enacted Budget, an increase of $35 million over the 2007-08 fiscal year. As
shown on the chart below, this consists of approximately $1.8 billion for Basic STAR
exemptions (non-seniors outside NYC), $813 million for Enhanced STAR exemptions (seniors
outside NYC), $826 million for NYC income tax credit (NYC income tax component for STAR
exemptions) and $1.2 billion for Middle Class STAR rebates.

STAR Property Tax Relief, 2008-09 Enacted Budget Estimate(in millions)

NYC PIT Credit,$826

Basic STAR
Exemption, $1,826
Middle Class STAR
Rebate, $1,227

Enhanced STAR
Exemption, $813

Source: New York State 2008-09 Enacted Budget Financial Plan

63

Problems with STARThe Commission sees several fundamental problems with the current property tax relief
programs, including inefficient targeting of relief, unintended consequence of higher taxes,
insufficient help for those most in need, perverse school funding, and mounting complexity.
First, the current STAR programs have not adequately targeted property tax relief to individuals
based on their ability to pay. Of the original STAR programs – Basic and Enhanced (plus NYC
income credit) – about 70 percent of the total benefit is for Basic recipients. The Basic program
has no income or property value limitations. Within a given municipality all homeowners receive
the same amount regardless of home value, income, size of tax bill or other exemptions.
The Enhanced program for seniors is income based, and has a higher benefit. But since
Enhanced STAR in essence provides an incremental benefit above the Basic program, incomequalified seniors would have gotten more than half of that benefit (or more than 15 percent of thetotal) in any case under the Basic program. Finally, the most recent Middle Class STAR rebate is
income-based in terms of qualification, but not in terms of benefit received and therefore not aswell targeted as it could be.
Second, the programs have not been effective in limiting school property tax increases. Critics ofSTAR have noted that taxpayers receiving STAR benefits are more likely to approve higher
school district budgets and therefore school districts are more likely to propose them. 23 As waspointed out in Part II above, school expense growth accelerated just as the original STAR
programs were created, and that growth rate has continued unabated. These effects undermine
the basic goal of the program – to limit school taxes.
Third, STAR payments to schools generally run counter to the goals of state aid. State aid isprogressive in terms of district wealth, with per pupil aid increased for lower wealth districts. In
contrast, STAR payments are somewhat regressive, in that they rise slightly, on average, forhigher wealth districts.
Finally, there are, quite simply, too many programs. The complexity has grown since the initialenactment, and could potentially increase in the future, as taxpayers are still not satisfied that
school tax increases are under control. Thus, the STAR program is in need of major reform.

23

Eom, Tae Ho, William Duncombe, and John Yinger. Unintended Consequences of New York’s STAR Program.
School, Syracuse University, October 2005.

64

Recommendation: STAR Circuit Breaker
The Commission recommends that New York’s current property tax relief programs (Basic andEnhanced STAR, Middle Class STAR and the circuit breaker tax credit) be combined andrestructured into a mostly income-based “STAR Circuit Breaker.” 24 The Commission believes
that STAR benefits for most taxpayers should remain, and has special concern for areas whereproperty values are so low that STAR covers an especially large percentage of the property tax.
However, the program should be simplified and realigned to target those who need it the most.
The Commission’s view is that the design of such a program should provide individual relief by
incorporating the following principles:••••

Property tax relief should be limited to the primary residence of individuals, both
homeowners and renters;
Eligibility should be phased out for those with higher income and property values;
Benefits should be income based, using a broad definition of income; andBenefits should not wholly relieve the excess tax burden (to avoid perverse incentives),and should not exceed a maximum limit.

Many of those who testified before the Commission referred to the legislation introduced by
Senator Little and Assemblywoman Galef and (S.1053A/ A.1575A). The Commission
recommends that the Governor and the State Legislature transition at least $2 billion of theexisting STAR program funding into income-based relief. There should be a careful review of allexisting individual property tax exemptions to see whether they still make sense and are fair.
Any such restructuring should not sacrifice the benefits for middle class taxpayers and those whoneed it most.

Conclusion
It is this Commission's view that once property tax levy growth is restrained through a levy cap,
additional property tax relief should be targeted to individual middle class taxpayers andthose New Yorkers who need it most. STAR benefits for most taxpayers should remain, but New
York's current system should be simplified and restructured. Eligibility for all property tax relief
programs should be phased out for those with higher income and property values. A restructured
STAR Circuit Breaker program could provide relief for those taxpayers most burdened.

24

The Commission recognizes that the STAR Circuit Breaker is meant to provide relief for property taxes beyond
school taxes.

65

Recommendations: Changing State Law and Mandate Relief

In a continuous effort to improve the quality of education provided to our children, New York
leaders have, through numerous state regulations and laws, imposed many requirements on
school districts. The Commission recognizes that many requirements in fact represent
appropriate policy judgments, advancing important principles. However, the Commission’s
recommendation that the growth in property tax levies be constrained will require that future
expenditure growth be controlled. The Commission believes that to reduce the burden on local
property taxes, (1) New York State must be a partner with school districts in reining in the risingcost of public education; and (2) school districts must be creative, disciplined, and willing toenter into cooperative efforts, including consolidation, to achieve economies.
State mandates touch many aspects of school district
The accumulation over time ofoperations including special education administration
well-intended mandates has
and services; compliance reporting; salaries andresulted in a regime ofbenefits; and student testing. The accumulation overoversight viewed by many astime of these well-intended requirements, coupled withoverly burdensome andlimitations on school districts’ ability to act, hascomplex, sometimes outdated
resulted in a regime of oversight viewed by many asor redundant and very costly.
overly burdensome and complex, sometimes outdated
or redundant and very costly. School district expenses have grown at more than double the rateof inflation in the last ten years. The Commission believes, and many who testified before theCommission have asserted, that mandates from the State are a significant factor.
The following recommendations are directed at either changing existing mandates or proposing
new mandates. Together, they will both reduce costs and allow educators to focus more efforts
on educating our children.
Recommendations are made in the following areas:
•
•
•
•
•
•

Cost Evaluation of New Mandates
Personnel and Other Operational Expenses
Providing Alternatives in Special Education
School District Consolidation
Shared Service Delivery
The Big Four66

Cost Evaluation of New Mandates
New mandates and regulatory provisions are continuously imposed on local governments by theState Legislature and administrative agencies. To ensure that such proposals are fully evaluatedto determine the costs of compliance by local government entities, the Commission recommends
that the analysis conducted during preparation of fiscal impact notes by the Legislature, andduring State Education Department rulemaking, take into account information provided by local
governments and the associations that represent them, and that an aggregate total of all new costs
imposed by the Legislature and through State Education Department rulemaking be calculated
annually by the State Comptroller and made publicly available.
The following Commission recommendations would more effectively incorporate considerationof local fiscal realities and facilitate public review.
1.

No new legislative mandates without a complete accounting of the fiscal
impact on local governments, which must include full documentation, local
government input and proposed revenue sources to fund the new mandates.

Specifically, the current requirements for the fiscal impact note must be strengthened.
Section 51 of the Legislative Law requires that, with some limited exceptions, a fiscal
impact note be prepared when a bill is proposed to the Legislature that is presumed to“substantially affect the revenues or expenses, or both of any political subdivision.” Joint
Rules of the Senate and Assembly articulate the content, procedure, and applicability of
the requirements of fiscal notes. However, theAll choices have consequences,
Joint Rules do not provide guidance on theand school mandates are nolevel of fiscal analysis required. As a result,
exception. Mandates often
the fiscal notes that accompany proposed
force school districts to divert
legislation may vary in quality, and thefinancial resources from theirunderlying data and analysis may not be set
most important objective –forth. In addition, fiscal notes may not fully
educating students.
explore the shifting of costs from one- Tom Scherer, President, Geneva
government entity to another that will result
School Board
from the legislative proposal.
The existing requirement for a fiscal impact note should be expanded to include more
rigorous cost-benefit analysis. The process for developing fiscal notes must include input
from local governments, including representatives of school districts. The views of local
government associations, including the New York Association of Counties, theConference of Mayors, the Association of Towns, the School Boards Association and theCouncil of School Superintendents must be sought when fiscal notes are being prepared,
and made available to legislators before the vote on the legislation. Finally, the fiscal note67should identify funding for the full cost of implementing the proposal, including transfer
of costs from the state to local governments or among local governments.
2.

No new regulatory mandates from the State Education Department without acomplete accounting of the fiscal impacts on local governments, which must
include full documentation, local government input, and proposed revenue
sources to fund the new mandates. Not all State mandates originate in statute. Manyrequirements are advanced as State agency regulations which, depending on the proposal,
may not be subject to in-depth fiscal analysis. Almost all State agencies are subject to aregulatory review process that requires analysis of the potential fiscal impact before therule is proposed. This requirement does not apply to the State Education Department,
which is governed independently. The State Education Department has indicated to theCommission that it engages in an informal outreach process to determine the views ofparties that will be affected by a potential rulemaking, but does not have a formal written
procedure for this process. This Commission recommends that such written procedures,
including the requirement of a fiscal impact analysis, be developed and implemented.
3.

Mandate accountability through an annual report the Office of the State
Comptroller, which should include the cumulative cost to localities ofcomplying with all new regulatory and legislative mandates. Fiscal analyses oflegislation and State Education Department rulemaking should be aggregated annually to
calculate the cumulative cost to localities of complying with new state mandates.
Currently, a single source for information on newly enacted mandates and their annual
fiscal impact on local governments, including school districts, does not exist. As a result,
there is no available analysis of the total impact of new state requirements on localities.
This Commission believes that the Office of State Comptroller or another appropriate
entity should aggregate the information from fiscal impact notes and the analyses of costs
associated with State Education Department rulemaking, and should make thisinformation available to the public. This is a critical step to ensuring transparency ofpolicy-making in relation to the local impact of state requirements.

68Personnel and Other Operational Expenses
Personnel
Personnel costs are the key expense drivers for school districts. Testimony presented to theCommission highlighted several statutory requirements and categories of State mandates thathave a significant impact on school district costs and warrant immediate attention.
Recommendations related to personnel costs are listed below:
4.

Provide for a regional collective bargaining contract negotiated by BOCES,
which school districts could voluntarily adopt. Currently, each school district

negotiates collective bargaining agreements separately, even though individual districts
may be inadequately equipped to handle this task. This duplication of effort is expensive,and different salary scales for neighboring districts may inhibit school district
consolidations. The LGEC proposed a regional collective bargaining contract withvoluntary participation by school districts, and with State assistance and information
sharing during negotiations. This would put school districts on a level playing field withteachers’ unions during negotiations and would pave the way for consolidations bylimiting or eliminating the impact of leveling-up the salary and benefit schedules of two
merging school districts. Career flexibility for teachers would be enhanced as they could
transfer more easily between districts. These regional contracts would be phased in as
current contracts expire and would initially apply only to new hires, with existing
employees “grandfathered” for some term. The Commission also recommends that theState consider negotiating a statewide contract, with regional differentials, that would beavailable for adoption by school districts.
5.

Require local government and school district employees to contribute toward
the cost of health insurance, on the same basis as state employees. This

recommendation addresses one of the fastest growing expenses for school districts andlocal governments by aligning their employee health care contribution requirements withthose that apply to State employees who participate in the Empire Plan (10 percent forindividual coverage and 25 percent for dependent coverage). The LGEC estimated that
this recommendation would save local governments and school districts outside of New
York City approximately $475 million annually.
Many local government entities participate in the New York State Health Insurance Plan
(NYSHIP). In addition, the State offers local government employers a lower costalternative, the Excelsior Plan, which incorporates additional cost containment measures,such as co-pays and limits on some benefits. As a result of these features, the premium
rates for this plan are expected to grow more slowly. The Commission urges school
districts to consider this centrally managed alternative as a means for controlling costs.
69

No matter what type of health benefit coverage is offered, the Commission urges school
districts to negotiate higher employee contributions and other cost saving measuresduring collective bargaining.
6.

Encourage health benefit trusts. This Commission heard testimony that cited savings

when school districts pool resources to purchase employee health insurance, as is done
through the cooperative health plan administered by the Orange-Ulster BOCES district.
These self-funded municipal cooperatives are governed by Article 47 of the Insurance
Law. The Commission notes that Governor Paterson has proposed legislation to ease theprovisions of Article 47 in order to facilitate additional collaborative participation in
health benefit cooperatives throughout the State, as recommended by the LGEC.
7.

Convene a study to implement a new Tier 5 within the pension system. The

LGEC concluded that the current pension program needs to be changed to address therelatively rich benefits available to public employees, and recommended that the State
undertake of options. This Commission endorses the evaluation of a potential Tier 5,
reinstating employee contributions throughout an individual’s working years, andproviding either a defined contribution system or the option of a defined contribution
benefit. To underscore the urgency of moving to a Tier 5, such a study should review
how best, rather than whether, to implement an additional tier.
8.

Require school district reporting on collective bargaining outcomes. Currently,

there is no single source for information on the outcomes of collective bargaining
between school districts and employee unions. The Commission believes that thisseverely limits the transparency of an important aspect of school district operations. The
Commission recommends that school districts be required to report on collective
bargaining outcomes to the Governor’s Office of Employee Relations (GOER). These
outcomes would be summarized by GOER in an annual report to the Governor andLegislature. In addition, the Commission recommends that school districts be required toreport on collective bargaining outcomes in their annual school budget presentation to thevoters, in a manner that clearly and transparently informs the public of those outcomes,
and attendant costs.
9.

Amend the Triborough provision of the Taylor Law to exclude teacher stepand lane increments from continuation until new contracts are negotiated.

The Taylor Law, which regulates collective bargaining between public employee unions
and public employers in New York, contains a provision known as the Triboroughamendment. The Triborough amendment makes it an improper practice for a public
employer to: “…refuse to continue all the terms of an expired agreement until a new
agreement is negotiated.”70

Speakers testified to the Commission that the Triborough amendment is a major
contributor to increases in teacher salaries and it has "tilted the bargaining table" in favorof teachers' unions. It is very difficult to precisely estimate the financial impact of the
Triborough provision on school district expenses. However, as documented in this report,
personnel costs are the major component of school district expenditures, and have been
increasing at a rate above inflation for a number of years.
This Commission recommends that the Triborough provision be amended to create an
exception for salary step and lane increments. This amendment would require school
districts to maintain salaries at the rate set in the expired agreement, but without further
enhancement through step and lane increments during a contract hiatus. This proposal
recognizes the basic purpose of Triborough to maintain the status quo during contract
negotiations, and would not preclude school districts from bargaining to pay step and lane
increments that accrue during the contract hiatus, when a new contract is agreed upon.

Other Operational Expenses
10. Repeal the Wicks Law, or significantly increase its threshold amounts. This

Commission strongly advocates the repeal of the Wicks Law (General Municipal
Law§101). The Wicks Law, enacted in 1912 to promote fair bidding on construction
projects, requires the State and local governments to issue multiple prime construction
contracts for all public works under a monetary threshold. The original threshold,$50,000, was established in the early 1960’s and had not been changed until the 2008-09
Enacted Budget increased the thresholds to $3 million for New York City, $1.5 million
for projects in Nassau, Suffolk and Westchester counties, and $500,000 for all othercounties.
According to many local government officials and school superintendents, mostconstruction projects in the counties outside of the New York metropolitan region now
cost more than $500,000, and therefore multiple contracting will still be required. New
York City had estimated, before the threshold changes, that it would save $3.7 billion
over its ten-year capital plan with full repeal of Wicks requirements. There is no way to
directly estimate of what a full repeal of the Wicks Law would save school districts, but
significant savings are likely, given the districts’ almost $4 billion outlay on capital andrelated expenditures in 2005-06. The bulk of that money went to construction projects($3.4 billion). The rest went to projects related to land and existing structures (almost $84
million) and to equipment (almost $507 million).
11. Facilitate cost-effective local purchasing by increasing thresholds forcompetitive bid requirements. Local government procurement must be conducted

through competitive bidding when the cost of the purchase will exceed certain thresholds.
The current competitive bidding thresholds are $10,000 for commodities and $20,000 for71

public works projects. The 2008-09 Executive Budget submission proposed increased
thresholds of $20,000 and $50,000 respectively, but this reform was not adopted.
12. Encourage participation in State energy efficiency programs. Rising energy

costs are a pressing concern for school district administrators. All school districts are
eligible to participate in the Statewide Energy Services Program offered by the New YorkPower Authority (NYPA). NYPA designs, constructs and finances each project, andprepares all permits and filings required by the State Education Department. NYPA
provides the upfront costs of the project, which are paid back over time from the school
district’s energy savings. In addition, the New York State Energy and Research
Development Agency (NYSERDA) sponsors the Clean Air School Bus Program, whichfunds emission reduction technology. The Commission recommends increased
utilization of these program by school districts, and urges NYPA, NYSERDA and, whereappropriate, the Long Island Power Authority to work actively with BOCES andstatewide school district associations to expand utilization of these energy efficiency
programs.
13. Centralize and streamline school district compliance reporting. Because ofoverlapping State and federal requirements, school districts must prepare numerous andsometimes redundant reports. School district officials repeatedly testified to thisCommission their view that compliance reporting required by the State and federal
government is often unrelated to program effectiveness. Since 2004, legislation proposedby the State Education Department that would make numerous changes in many areas toexisting regulatory reporting mandates has been pending in the State Legislature. This
proposal is strongly supported by school district representatives, and the Commission
urges both houses to act on this legislation without delay.
This Commission believes there should be a single unit at the State Education
Department responsible for all existing school district reporting, charged withresponsibility for streamlining and consolidating all reporting. The unit would also
determine how to implement and integrate new reporting requirements. The Commission
recommends that the State Education Department involve representatives of school
districts in the efforts of this unit.
14. Simplify or eliminate other individual education mandates. The Commission

received extensive testimony and written materials from school districts about othermandates that they find onerous. The most expensive set of education mandates theycited relate to special education, which is separately discussed below. The Commission
wishes to enumerate several other most frequently cited mandates, along with arecommendation that they be reviewed for potential simplification or elimination.

72

•

No Child Left Behind / Academic Intervention Services should be limited to thelevel of services required by federal law, or school districts could be provided
with increased implementation flexibility.

•

The process provided for teacher discipline under Education Law §3020(a) should
be reformed to reduce the very high overall cost and length of time required tocomplete individual hearings.

•

Turn state mandates that prescribe details of personnel training, for example, one
year of mentoring for all new teachers, and special safety training for bus drivers
and monitors, into guidelines.

•

Repeal personnel health and safety mandates involving paid leave – such as time
off for cancer screening or blood donation – to subject such benefits to thecollective bargaining process.

•For health and safety mandates imposed on all local governments including
school districts – e.g., defibrillators, compliance with environmental regulations –afford school districts flexibility in terms of time to implement and/or method of
implementation.

•

Convert specific instructional mandates – e.g., requiring graphing calculators or
instruction about the Irish Potato Famine – into guidelines.

Special Education
New York State’s Social Compact –The Council of School Superintendents commends

When discussing special education it is
the members and staff of the Commission on
important to emphasize, especially during
Property Tax Relief for undertaking what appears tothese difficult fiscal times, that New Yorkbe the most thorough independent review of New
York's special education policies in the more than 30
State has always had, and continues toyears since the current basic structure was put in
have, a deep commitment to the social
place.
compact that demands that we care forthose most in need. The Commission can- New York State Council of School Superintendents
be successful in its mission to reduce
expenses, especially those that relate to special education, only if it presents a roadmap that not
only achieves cost savings, but also improves services and outcomes for students and theirfamilies.

73Understanding Special Education – It is important to understand that “special education” is aterm of art. For those who are not education experts, the perception may be that special education
programs serve only those students with a severe diagnosed mental or physical challenge. In
reality, the 400,000 school-age students classified in special education in New York State
include pupils across a broad spectrum of disabilities from those with multiple mental andphysical challenges to students with milder conditions. In fact, over 50 percent of the pupils
classified as special education students spend more than 80 percent of their day in the regularclassroom. Such students may need extra help in reading or math, speech therapy or othersupport due to either a mild disability or, in the many cases where there is no specific diagnosis,
because they are simply not performing as well as their peers.
Parents, Students and the Educational System – The Commission solicited testimony andspoke with dozens of experts throughout this process. Many parents of students with milder
issues seek special education classification for their children because they want them to receive“extra help” or services so they can succeed in school and life. They do not have enoughconfidence that their children will be provided with the assistance they need in the educational
system unless they are classified as special education students.
We, as a State, must do a better job of providing “extra help” and other supportive services thatparents demand and children need, in the general education setting. Classifying students into
special education is not only more costly, but more restrictive and potentially less conducive to a
student’s success. To accomplish this goal, parents need to be able to trust that their children will
be better served in the general education environment. Therefore, general education services forstudents with mild disabilities must be enhanced.
The Problem – Costs are too high, too many special education students are in separate schools

or in other more restrictive environments, and key educational outcomes are well below thenational averages.
NYS (including NYC) Special Education Compared to Other States, 2005-06
New York
AmountRank

U.S. Average

Special Education Salary Expense
Per Pupil$10,466

1st$3,428Classification Rate 25

15.9%

13th

13.8%

Graduation/Equivalent Rate 26

47.0%

38th

52.5%

Source: U.S. Department of Education, NCIS

25

The classification rate used within New York State and throughout this report is 12.4%. For purposes forcomparison to other states, 15.9% is used. The rate used for comparison to other states calculates special education
pupils as a percent of public school pupils. The rate used within New York State calculates special education pupils
as a percent of public and private school pupils.
26
State variation may reflect differences in requirements for graduation.

74

Special education was one of the mandates most frequently cited by school officials during
testimony to the Commission as a significant contributor to educational costs. Almost all
representatives of school boards and school district management, as well as many academic
experts, pointed to the growing costs of compliance, and the fact that as of 2007, New York hadover 200 separate special education mandates that either clarify or exceed federal requirements.
By a significant margin, New York ranks first in special education expense per pupil.
Based on salaries (the only data available for comparing expenditures by all states), New Yorkspent $10,466 per pupil in 2005, three times more than the national average of $3,428. New
Hampshire was a distant second, at $6,775 per pupil.
Even while spending much more, New York ranked 38th in 2005 in key educational outcomes,
such as the proportion of such students leaving the system with either a diploma or certificate, ortransferring to general education. 27 The graduation rate for those students is approximately 50
percent statewide, but only about 20 percent in large cities.
According to the State Education Department, special education accounts for 27.1 percent of thetotal instructional cost of education, even though it involves only 12.4 percent of the students. As
shown on the following table, special education has been a key element in the past decade’s
accelerated growth in overall school expense. Instructional cost per pupil for special education issubstantially higher than for the general pupil population – in 2006-07, instructional expense per
pupil for special education was $23,898, just over 2.5 times the $9,494 for general education.
Special and General Education Summary
New York State, 2006-07
Special Education

General Education

Total

Instructional Expense$9.7 B$26.1 B

$35.8 B

Share of Instructional
Expense

27.1%

72.9%

100%

Pupils405,309

2,747,663

3,152,972

Share of Pupils 28

12.4%

87.6%

100%

Instructional Expense
Per Pupil$23,898$9,494$11,345

Source: State Education Department ST-3 filings

27

Note that outcomes may reflect differing standards for graduation requirements.
This rate is the ratio of school-age residents who are classified as having disabilities, divided by the total districtresident school-age population (including public school students, nonpublic school students, and students receiving
home instruction).
28

75

For the last five years, special education expense has grown at a compounded annual rate of 9.0
percent, while general education spending has grown at a rate of 5.7 percent.
Annual Growth of Special and General Education
New York State, 2006-07
Special Education

General Education

Combined

Instructional Expense

9.0%

5.7%

6.6%

Pupils

0.2%- 0.6%- 0.5%

Instructional Expense
8.7%
6.4%
Per Pupil
Source: State Education Department ST-3 filings

7.1%

The split of funding for special education, as of 2006-07, was 7 percent federal, 32 percent statecategorical aid and 60 percent local revenue and other. The most significant state categorical aid
is foundation aid, under which districts receive for each special education pupil 2.41 times theamount received for other pupils. Districts also receive excess cost aid for out-of-district
placements and for serving high need students in district.
The Commission is convinced that the chief motive for special education classification is thedesire of parents’ and educators’ to deliver enriched services to students. However, theCommission joins in the Regents’ concern that many children classified as having a disability
may actually lose out on better educational opportunities available in the regular classroom.

Special Education Classification
Special education involves specifically designed individualized or group instruction or special
services to meet the individual needs of students with disabilities. The federal IDEA requiresthat every child receive a “free and appropriate education” in the “least restrictive environment”
which, in appropriate cases, means regular classrooms. While some special education students
are educated in separate classroom, increasingly more students in almost all disability categories
are spending much of their day in the regular classroom.
Each school district administers its own system for special education services under district
policies. To receive special education services, each pupil must be evaluated and then classified
as to disability type by a committee on special education (CSE, or CPSE for pre-school). There
are 13 categories of disability under state law, covering a range of conditions varying in severity.
As the chart below shows, in 2006-07 almost two-thirds of the special education classifications
were for learning disabilities (42.7 percent) and speech or language impairment (21.7 percent).
76

Other familiar disorders, such as autism, mental retardation, or emotional disturbance account for
only a small proportion of pupils, 3.7 percent, 3.3 percent, and 8.9 percent, respectively.
Distribution of Learning Disabilities in All
Settings for Ages 4-21, 2006-07
Learning Disability
Speech or Language Impairment
Other Health Impairment
Emotional DisturbanceMultiple Disabilities
AutismMental Retardation
Hearing Impairment
Orthopedic Impairment
Deafness
Visual Impairment
Traumatic Brain Injury
Deaf Blindness

42.7%
21.7%
12.4%
8.9%
5.2%
3.7%
3.3%
0.7%
0.5%
0.3%
0.3%
0.2%
0.0%

Total

100.0%
Source: New York State Education Department

Parents are driven by a strong and completely understandable desire to do what is best for theirchildren. The Commission heard testimony from parents who perceived that their child would
thrive academically only with the additional support available through placement in special
education. When a child is classified as needing special education, the district’s Committee on
Special Education develops an annual individualized education program (IEP) for the studentthat specifies an appropriate level of services, and sets goals. Parents who do not agree with the
IEP developed for their child may request a due process hearing to review the plan.
Today, slightly more than 400,000 public and private
school-age pupils in the State – one out of eight
pupils – have been classified as needing special
education services. This 12.4 percent classification
rate 29 is a slight increase over the 11.8 percent rate
five years ago.
Classification rates vary considerably across theState, even among similar districts. For example, as
shown in the following table, low need districts range
in classification rates from 4.7–17.6 percent, and theClassification rates varyconsiderably across the state,even among similar districts.
In low need districts,
classification rates range
from 4.7–17.6 percent, while
average need school districts
range from a low of 2.2
percent to a high of 23.1
percent.

29

The classification rate used within New York State and throughout this report is 12.4%. For purposes forcomparison to other states, 15.9% is used. The rate used for comparison to other states calculates special education
pupils as a percent of public school pupils. The rate used within New York State calculates special education pupils
as a percent of public and private school pupils.

77classification rate among 337 average need school districts ranges from a low of 2.2 percent to ahigh of 23.1 percent. Although overall pupil counts in New York State have begun to decline,
special education classifications have remained stable.
Range of Special Education Classification and Per Pupil Instructional Costs for
Both General and Special Education According to Need Resource Capacity: 2006-07

Need Resource Capacity

NumberofDistricts

NYC
Big 4
High Need / Urban-Suburban
High Need / Rural
Average Need
Low Need

1
4
46
156
337
133

Total

677

Classification Rates
Average

Range

12.3%
12.2%
13.2%
13.6%
12.9%
11.1%
12.4%

NA
7.0%-15.75%
9.0% - 19.7%
6.8% - 19.5%
2.2% - 23.1%
4.7% - 17.6%

2.2% - 23.1%

Per Pupil
Instructional Costs
SpecialGeneral
Education Education$27,212$9,861$20,548$8,915$24,442$9,679$19,166$8,381$23,956$8,696$30,054$10,797$25,458$9,494

Source: New York State Education Department

The wide disparity between districts is directly related to two factors: 1) variation in subjective
standards being applied by committees on special education in different districts; and 2) differing
capacities of districts for accommodating students with the need for extra help in general
education settings.

[Our goals] are to prevent unnecessary special
education placements and to ensure thatstudents with disabilities who are returning toor remaining in the general education program
have the support they need to meet higher
standards.
- December 1996 Report to the Regents byState Education Commissioner Richard Mills

30

The Board of Regents has in recent
years often expressed concern about
inappropriate classification, andState Education Department has
worked to avoid inappropriate
referrals for special education. The
department has encouraged andsometimes required new practices in
districts where performancemeasures indicate significant needfor reform. 30

New York State Board of Regents, P -16 A Plan For Action. November 2006.

78

Special Education Hearing Requirements
During the 2007-08 school year 6,157 hearings were requested in New York State. Most weresettled or withdrawn, and only 820 of the requests resulted in issued decisions. According toresearch conducted by the New York State Dispute Resolution Association (NYSDRA), theaverage impartial hearing costs $75,000. 31 During a public hearing on Long Island, one
superintendent from Long Island referred to a case that will cost his district $300,000. Resultsfrom a survey conducted by the Council of New York Special Education Administrators(CNYSEA) revealed that hearing costs ranged from approximately $25,000 to over $100,000.
These expenses do not include costs associated with the State Education Department review ofimpartial hearing decisions. Thus, our school districts are spending millions on special education
dispute resolution, which could otherwise be funneled to programs and services that improveeducational outcomes.

Special Education Transportation
A student with a disability is entitled to suitable transportation, as specified in the child's
Individualized Education Program. State law requires transportation to and from public schooland nonpublic school settings within 50 miles of the child’s home, if the child is receiving
special education services and programs. The Commissioner may approve placement more thanfifty miles in distance if no appropriate non-residential special service or program is available.
Each district has discretion to determine how transportation is provided. School districts may
provide transportation services themselves, or contract with a private contractor or with BOCES,
or use a combination of providers. State aid reimbursement is available for the cost oftransporting students with disabilities.
School superintendents testified to the Commission that the already high cost of special
education is increased by the growing district expenses associated with transporting students to
non-public schools and off-site special education programs. As an illustration, nine Westchesterschool districts 32 report spending 30 percent of total transportation on public school student
transportation; 23 percent of total transportation on non-public school students; and 47 percent of
total transportation on special education (including out of district) transportation.

31

The NYS Dispute Resolution Association, Inc. (NYSDRA) calculated this figure in 2005 by interviewing several
NYS Special Education advocates and parent attorneys regarding their average expenditures, and what was includedin those costs (preparation for the hearings, hearing costs, experts, etc.), and several hearing officers to determine
what costs they incurred.
32
Regional Educational Advocacy Group. Written Testimony submitted to CPTR. June 2008.

79

Special Education Recommendations
Outcome-Based Accountability
15. The State Education Department should shift its emphasis from regulatory
enforcement, especially in special education, to performance standards, andsupport improved performance with training and expert assistance that
promotes best practices. This shift in regulatory approach is particularly
important in the area of special education, but should be applied to general
education as well.

Consistent with this approach, the State Education Department should actively engage
those schools that do not meet performance standards by offering technical assistance andsupport. There are 204 State mandates that implement, clarify, or exceed the Federal
special education requirements. As a first step towards performance-based management,
the Commission recommends those State mandates that exceed federal law beadministered as guidelines, where appropriate. To accomplish this, the State Education
Department should convene a group of stakeholders, including representation fromschool boards, superintendents, principals, teachers and parents, with the goal of
converting as many of these State mandates into guidelines as possible by the 2010-11
school year.
In the interim, the following mandates should be revised and simplified by the 2009-10
school year:
a. Staffing Guidelines: The Commission believes that inflexible staffing
mandates that require pupil-teacher-aide ratios for various classifications andsettings are a key contributor to the expense of special education.
b. CSE Guidelines: The requirements for the composition, procedures and multiple
deadlines of the Committees on Special Education should be reduced to theFederal IDEA requirements.
c. IEP Guidelines: Many of the requirements for the composition ofIndividualized Education Program teams should be reduced Federal IDEA
requirements and/or turned into guidelines, including requirements for IEP
content.

80

d. Eliminate Class Size Requirements: Class size mandates should be repealed,and schools should be permitted to establish class size based on their students’needs.
e. No Minimum Service Levels: There should be no mandatory minimum levelsof special education services such as the current minimum two hours per week forspeech therapy, to cite one example. CSEs should be allowed to determine what
service level is needed for each student.
f. Requirements for Autistic Pupils Are Too Prescriptive: The requirements
for autism reflect the older, more severe definition of the disability and not thebroader definition that is applied today. As a result, the specificity of existing
requirements prevents CSEs from determining the appropriate level of supportand service needed for each student.
g. Increase Responsibility of the District of Residence: Advocate for afederal change so that the district of residence can retain or at least share
responsibility for the IEP in instances involving parental placement.
h. Transportation: Advocate for a federal change that would reduce therequirement that transportation be provided up to 50 miles to and from a private
school.

Integrate Special Education with General Education
16. Dramatically accelerate theintegration of special education withgeneral education. For children withmilder issues, parents should not have topursue classification of their child inspecial education in order to receive
services. Nor should districts be forced togo through the formal classification
process before providing any basic
additional help to pupils with milder
needs. The Commission believes that the
integration of special education withgeneral education must be accelerated
dramatically. Further, the artificial andoutmoded barrier of “classification”

Providing an appropriate education
to students with disabilities will
always cost proportionately morethan services to non-disabledstudents, as their needs are, bydefinition, more intensive and moreindividualized. However, we must
insure that these extensive dollars
are spent in an effective mannerthat produces positive outcomes forthese students and long-term
benefits and savings for the
taxpayers and the State’s economy.
- Rebecca Cort, Deputy Commissioner,
Vocational and Educational Services for
Individuals with Disabilities, New YorkState Education Department

81

between general education and special education should be eliminated for the large
number of pupils with needs on the milder end of each disability category or spectrum.
The full integration of special and general education will be accomplished only if theskepticism of parents is allayed. The Commission believes this can occur if school
officials and parents communicate and build partnerships to ensure that the needs ofstudents are met.
The Commission proposes to strengthen educational services in general education, so that
pupils with milder needs can be adequately served without being classified for special
education.
a. Enhance general education with evidence-based practices to provide
appropriate services for all students. “Evidence-based” techniques, such as

response to intervention (RTI), identify individual pupil needs and adapt
instruction to meet those needs. RTI and similar techniques should be available toall students in general education, early enough to improve educational
performance, and without the need for classification for those with milder needs.
This would ensure that services are available to more pupils, and would reduceclassification, bureaucracy and overall expense. The Commission notes that theState Education Department is actively promoting the strengthening of general
education to address the needs of struggling students who are at risk forclassification without adequate intervention, and commends the State Education
Department's efforts to encourage all school districts to adopt RTI.
b. Strengthen pre-service training of all teachers so that they areprepared to meet the needs of students with disabilities in general
education settings. To maximize the inclusion of students with disabilities in

the regular classroom, and to address workforce shortages, all teachers should betrained to meet the needs of students with disabilities in the general education
environment.
c. Encourage schools that reduce their classification rate to invest
available funding. Such schools generally continue to receive enhanced

foundation aid as a result of “save harmless.” These schools should invest those
funds in general education programs that enhance services for students withmilder needs.

82Decrease Special Education Classification Rates
17. School districts with classification rates 20 percent higher than the Stateaverage (approximately 130 school districts), should be reviewed by theState Education Department to determine if assistance in reducing these
rates is required. The State Education Department, working with BOCES, should

expand the efforts of their expert teams to assist local Committees on Special Educationin districts with high classification rates to follow State classification standards, identify
weaknesses in general education capacity and implement best practices. In addition, theschool report cards should include declassification rates as well as classification rates toemphasize the importance of reassessment of student needs.

Reduce Litigation Costs
18. Reduce the Cost of Litigation. The expense of litigation must be decreased, as

amounts saved could be spent to improve and increase programs for students in special
education.
a. Promote alternative dispute resolution: The existing special education

mediation program should be expanded and other methods to encourage early
dispute resolution, such as IEP facilitation, should be promoted. Building parent
and school district partnerships and trust is fundamental to reducing disputes andtherefore costs.
b. Remove a hearing layer in the dispute process: One layer of the current

hearing process, which involves a district hearing followed by a State Education
Department hearing, should be eliminated. Measures should also be taken to
reduce the number and duration of disputes, and the consistency and effectivenessof hearing officers should be evaluated.
c. Shift the burden of proof in hearings: Chapter 583 of the Laws of 2007

placed the burden of proof on the school district. This law should be modified sothat the burden of proof is on the school district only when the family is unable toafford counsel.
d. Shorten the statute of limitations for non-approved private school
reimbursement cases: Parents who enroll their child in a non-approved private

school, without the approval of the IEP team, have two years from the alleged
violation to file a due process complaint seeking reimbursement from the school
district for the cost of the placement. (Education Law § 4404 (1)(a)). Since
school district budgets may be adversely affected when parents seek private
school tuition reimbursements years after a placement, the time period for filing acomplaint should be shortened to 90 days. Vermont, for example, has adopted ashortened statute of limitations for such reimbursement cases.
83Increase Collaboration to Provide Services
19. Increase Collaboration in Providing Services. Numerous educators testified about

the high cost of out-of-district placements, citing instances of tuition exceeding $100,000,
expensive transportation, and reimbursement policies that do not adequately encourage
collaboration.
a. Facilitate school district consortia to provide local alternatives to outof-district placement. School districts should consider joint planning todevelop specialized programs that can be made available to other districts andcoordination to make underutilized special education programs available tostudents from neighboring districts. These strategies could limit the need to send
students to private programs.
b. Share out-of-district transportation for special education, preferably as

part of a broader shared non-instructional services effort through BOCES or
through local district consortia.
c. Increase interagency collaboration to provide efficient regionaldelivery of emotional and psychiatric treatment. Regional treatment ofstudents with severe emotional disabilities could be established throughpartnerships that include school districts, the State Education Department andNew York State Office of Mental Health and/or BOCES to determine whether
there would be tuition and transportation savings. Providing more locally based
services has the advantage of allowing students to remain in their homes and local
schools, wherever possible.

Secure Federal Investment and Additional Savings
20. Federal Investment and Additional Savings. As funding special education remains

a key reason for accelerated school spending and a significant burden on the property
taxpayer, the Commission recommends the following:a. The Governor and the Legislature should call upon New York’s
Congressional Delegation to secure the federal commitment to special
education. Congress set a target for the federal contribution to special education

spending equal to 40 percent of the estimated excess cost of educating children
with disabilities. In 2006-07, IDEA federal funding covered only 7 percent of theestimated additional cost of educating children with disabilities in New York. The
shortfall in IDEA funding must be covered by the states and local school districts,
creating additional burdens on local school budgets and school property taxes.
84Additionally, the State should seek to maximize the availability of federal
Medicaid reimbursement to offset the cost of providing special education to low
income children with disabilities. 33
b. Shorten the time for reconciliation to reduce the amount of interest
paid. Several hundred schools – special act school districts and VESID approved

special education private schools – have tuition set by the State Education
Department rate setting methodology. The State reconciliation method includes
payment for the interest borne by the district. If a timelier rate setting process wasestablished, the State would save money by paying less interest on the loans.

Seeking Economies of Scale and Enhanced Educational
Opportunities
New York State has too many school districts – 697 outside of New York City. These districts
have an average size of 2,540 students, well below the national average of 3,400. Many of New
York State’s school districts are small – just over 200, or 28 percent, have fewer than 1,000
students. Many other states have much larger average school district student populations. For
example, Maryland, North Carolina and Virginia average 36,000, 12,000 and 9,000 pupils
respectively.
Smaller school districts have two basic flaws: 1) they are more expensive on a per pupil basis
compared to larger districts; and 2) the educational opportunities they provide are more limited
than those offered by larger districts.
Expense: School districts with fewer than 1,000 students spend more on non-instructional

services than larger districts. In 2006-07, these districts spent $5,345 per student on noninstructional services, or $859 (19 percent) more than the average spent by all districts outside of
New York City. The Commission staff conducted a regression analyses that found a statisticallysignificant relationship between school total spending per pupil and pupil numbers – the higher
the pupil numbers up to 1,000, the lower the per pupil spending.
Not only do smaller school districts spend more per pupil on overhead and other noninstructional expense, they also spend more on instruction per pupil. Commission analysis
demonstrated that the merger of smaller school districts (smaller than 1,000 students) could save

33

Medicaid provides for a 50% federal contribution, 25% state contribution and 25% local contribution of alleligible educationally related health services to children with disabilities.

85

as much as $7 for every additional student. In other words, for every 100 pupils added to a
district with fewer than 1,000 pupils, the expense per student would be reduced by $700.
These savings are not trivial, and they support similar findings from the Maxwell School at
Syracuse University. 34 Researchers found that consolidation would save two 900-pupil school
districts 7 to 9 percent and two 300-pupil districts approximately 20 percent. In its final report,
LGEC used the Maxwell School findings to estimate savings of $159 to $189 million frommerging New York State districts with fewer than 900 students. These savings could be used toboth increase educational opportunity and lower local school property taxes.
Educational Opportunities: The Commission found that higher pupil counts are related toincreased educational opportunities. For example, one analysis of school districts with fewer than
1,000 students found that larger school districts within the study group had a greater likelihoodof Advanced Placement course participation among pupils in grades 10 through 12.
There are two major areas of recommendation: 1) consolidation of school districts with fewer
than 1,000 students and 2) shared provision of services among school districts or more broadly
with units of local government, to achieve economies of scale and operational efficiencies.

School District Consolidation
The Commission makes the following recommendations regarding school district consolidation:
21. Require consolidation of school districts that have fewer than 1,000 pupils.
Additionally, grant the Commissioner of Education with discretionary
authority to order consolidation of school districts with fewer than 2,000
pupils. As a first step in determining where and how these recommended consolidations

should occur, the State Education Department should undertake reviews that examine
school districts under objective standards based on pupil enrollment trends, geography,
breadth of educational programs, potential fiscal savings and level of tax burden. This
Commission recognizes that these reviews could identify isolated instances whereconsolidation of districts would not be feasible. In addition, committees could be formed
within each BOCES region to evaluate potential restructuring opportunities of school
districts. The Commission understands that communities will have concerns regarding aloss of identity if school buildings are closed or sports teams disbanded. The Commission
believes that efficiencies can be realized without such measures, through centralized

34

Duncombe, William, and John Yinger. Does School District Consolidation Cut Costs? Syracuse: Center for Policy
Research, 2001.

86

administration of a newly created, larger school district. In fact, in certain areas only
administrative consolidation may be practical, especially where geographic distances
would be too great to make consolidation feasible.
22. Restructure state school reorganization aid to ensure that it is usedpredominantly to pay for reorganization expense or to provide needed
services. Additionally, temporarily suspend building aid for new projects for
districts identified for potential reorganization. Currently, operating aid isincreased by 40 percent for 5 years for districts that reorganize, and then reduced 4
percent a year over the next 9 years. This state incentive aid typically exceeds the direct
costs of reorganization as well as the benefits. School reorganization aid should be
reduced to pay only for reorganization expense or to improve needed services. The use ofaid for “leveling up” of salaries and benefits, which diminishes merger savings, should beprecluded, unless they result from collective bargaining and are approved by voters.
Districts considered for consolidation should provide an estimate of direct costs
associated with reorganization for consideration by the Commissioner of Education in
making a determination.
23. Amend state law to simplify consolidation by removing anachronistic
distinctions between, union free, central and city school districts. New YorkState Education Law provides various methods for school district reorganization,
depending on the district category. For example, union free and small city district
consolidations may be locally initiated, subject to the Commissioner’s approval, while
merger of other districts must be initiated by the Commissioner. Such distinctions should
be removed to facilitate streamlining. In addition, there are no provisions authorizing
merger of the “Big Five” city school districts with other districts, and the school districts
in other cities cannot be consolidated with each other. All of these statutory barriers toconsolidation should be removed.

Shared Service Delivery
Cooperative arrangements to share the expense of non-instructional support services among
school districts can reduce expenditures for all school districts regardless of size. Sharing
services maintains school districts as separate operating entities while reducing duplication in theprovision of services such as personnel transactions, maintenance and grounds upkeep, pupiltransportation, budget preparation and auditing. Boards of Cooperative Educational Services(BOCES) are authorized to offer both instructional and non-instructional shared services, someof which are eligible for reimbursement through state aid. BOCES expenditures on noninstructional services in school year 2006-07 totaled 16 percent, of their total expenditures of$2.4 billion. All school districts, except the Big Five and four others are members of a BOCES

87

There are numerous examples of consolidation of
I propose that we unleash the
non-instructional functions through BOCES. These
enormous potential of ourinclude a long-standing arrangement, the New YorkBOCES throughout the state to
School and Municipal Energy Consortium, throughreduce costs through greater
which the Onondaga-Cortland-Madison BOCES has
service sharing beyond what
jointly purchased energy for school districts and local
BOCES is legally allowed togovernment entities throughout upstate. A similar
provide.
program is managed by the Erie 1 and Erie 2 BOCES.
The QUESTAR III BOCES provides state aid- Ronald D. Valenti,
Superintendent of Blind Brook
analyses and internal audit capacity for school
School District
districts statewide, and eleven BOCES deliver “backoffice” services. Nassau County Executive Thomas
R. Suozzi recently released a plan under which a range of services would be jointly provided
through mutual cooperation among the Nassau County government and local politicalsubdivisions, as well as BOCES and school districts.
The Commission makes the following recommendations regarding shared service delivery:
24. Amend Education Law Section 1950 and General Municipal Law Article 5-G toremove obstacles and clearly authorize BOCES to enter into agreements withother local government entities for non-instructional services. Article 5-G of

the General Municipal Law broadly authorizes “municipal cooperation” among counties
outside of New York City, cities, towns, villages, BOCES, fire districts and school
districts for the performance of functions or provision of services. However, unlike otherpublic entities, BOCES requires the approval of the State Education Department before
entering into such agreements. To foster implementation of such initiatives on a broader
basis, it may be appropriate to remove this approval requirement for BOCES
participation in non-instructional shared service agreements, placing BOCES on the samefooting as other public entities with ability to enter into, or lead, joint ventures. The State
Education Department should, however, retain full jurisdiction over BOCES services thatinvolve instruction or other activities for which state aid reimbursement would beavailable. Article 5-G should also be amended to permit public institutions of higher
education, including community colleges, to participate in inter-municipal agreements.
25. Rescind the statutory cap on the BOCES district superintendent salaries. The

BOCES district superintendent serves two roles. The individual is the chief executive
officer of the BOCES who is hired by and reports to the BOCES board. The individual isalso an employee of the Commissioner of Education and his or her representative inmatters of concern to the Commissioner. The BOCES district superintendent’s salary is
paid in part by the BOCES district and in part by the State Education Department.

88Currently, district superintendent salaries are linked to the salary of the Commissioner of
Education to maintain alignment. This salary level has proved to be an obstacle to hiringand retaining the BOCES superintendents in wealthier areas of the state where school
district superintendents’ salaries are either on par or higher. Testimony presented to thisCommission suggests that the current 25 percent vacancy rate in this pivotal leadership
position resulted from non-competitive salary levels. The Commission recommends
rescinding the BOCES salary cap to improve the ability of BOCES districts to hire andretain highly-qualified individuals for this demanding job.

Big Four City School Districts
Buffalo, Rochester, Syracuse and Yonkers (the “BigAs government leaders, it is timeFour”) have fiscally dependent school districts.
to take a hard look at everything
Local revenues for the Big Four school districts are
we do and how we do it. We
have to do more than cut
collected as part of city taxes that are also used toservices and make them smaller.
fund other municipal services, but the mayors inWehave to change the way wethese cities have no role in the administration ofdeliver services and make themschools. Instead, the Big Four school districts are
better.
governed by independent school boards who do not- Mayor Robert Duffy,
have to submit a budget to the voters each year.
City of Rochester
This system of governance is unlike New York
City’s mayoral control structure, and unlike the structure of independent school districts where
the school boards levy taxes and manage schools. The Big Four are caught in between, withoutalignment between management and finances.
The Big Four have not had significant local revenue increases to school funding. From 1993-94
to 2007-08, the compound annual growth rate for local school revenue has been less than 1
percent (0.2 percent). This slow rate of local school revenue growth was possible largely becauseof significant state aid increases.
The Commission recommends:
26. Exempt the Big Four from the proposed property tax levy cap. Under the State

Constitution, all municipalities, including the Big Four cities, are already subjected to aproperty tax rate cap for county and city purposes of no more than 2 percent of theaverage full valuation of real property. As the Big Four cities must both fund typical city
services as well as schools, their current limit is much more restrictive than for areas with89

independent school districts. 35 Also, as local school revenue growth is typically less than
1 percent for the Big Four school districts, a tax levy cap set at the lesser of 4 percent or
120 percent of the consumer price index may be superfluous. Moreover, because property
taxes are not dedicated solely to schools, a cap on the property tax levy would put alimitation on the ability of these cities to raise funds to support other municipal functions.
Big Four cities raise funds from a multitude of sources, so a cap on the property tax could
simply shift the burden to other revenue streams.
27. The calculation of the Maintenance of Effort (MOE) requirement should be
modified from a fixed dollar amount to a per pupil amount. The current MOE

requirement was instituted in conjunction with the recent significant increases in school
aid to ensure that state funds are used to increase school funding and do not simply
replace local funds that had been devoted to education. If pupil counts continue to decline
as they have for the past six years, the current MOE requirement implies an increased,rather than maintained, local share of school expenses. However, any decrease in the
MOE amount must be less than the full per pupil amount to reflect funding for fixed
costs. Maintaining the MOE requirement as currently structured will eventually,
assuming continued population declines, put upward pressure on the property tax.
28. Grant mayoral control for the Big Four school districts, with a sunset
provision. The Commission believes that mayoral control of education can enhanceaccountability for school performance and strengthen the links between school financesand management. Given the financing structure of dependent districts, linking school
governance to existing political structures will allow for coordination with city-provided
services, such as parks and recreation and social services. Most importantly, if mayoral
control is successful in improving school performance, there may be a positive effect on
economic development, retention of middle class families, and protection or expansion of
the property tax base. The structure of governance should either be through a schoolboard, with the members appointed by and serving at the pleasure of the mayor or,similar to that of New York City, with a chancellor reporting to the mayor.

35

In 2005-06, Buffalo had exhausted 81.2 percent of its Constitutional tax limit, Rochester had exhausted 75.7 percent , Syracuse
had exhausted 72.4 percent and Yonkers had exhausted 58.9 percent .

90

Additional Recommendations
Encourage Efficient Delivery of Social Services
29. The Governor should direct the appropriate state agencies to collaborate andcoordinate with each other and with local school districts to provide social
services to students in schools. By using existing state and local resources, social

services could be provided more efficiently and effectively to children who need them intheir own schools.

Property Tax Assessments
30. Move property tax assessing and collection to counties for administration,
providing reasonable phase-in provisions. New York State’s assessing system isamong the most fragmented in the nation, with 1,128 individual assessing units, almost
all at the town, city and village level of government. Tax collection is also quite
fragmented, again mostly at the municipal level. Property assessment as well as property
tax collection should be consolidated at the county level of government. Benefits fromcounty-level assessing include, among others: (1) elimination of tax shifts resulting fromchanging equalization rates within the county; (2) improvement in assessment accuracy
resulting from more regionalized data, analyses and market monitoring; and (3)specialization of staff for specific types of properties. This Commission further
recommends that a system be established for charging back municipalities for theservices shifted to county government, as a means of funding these services.
31. Eliminate statutory requirements for school district collections that prevent
functional consolidation. School district boundaries are not at all co-terminus withother municipal boundaries. In fact, the 700 school districts have some 2,900 segmentsthat cross into different towns, cities, village and counties. As a result, school district tax
collections are handled differently depending on which portions of the district are locatedin a town of the first class, a town of the second class, or within a city. Having threedifferent statutory arrangements for tax collections poses a barrier to consolidated,
modernized operations. These statutory impediments to the efficiency of school tax
collection should be removed.
32. Establish uniform statewide assessing standards. New York is one of only threestates that do not have clear statewide valuation standards and is one of the few without
periodic revaluation of all properties. The combination of a myriad of assessing
jurisdictions and the lack of statewide standards makes the New York system of property
assessment arguably the worst performing in the country, in terms of equitable treatmentof taxpayers.
91

The Commission heard repeated testimony from assessors about the need for statewide
assessing standards, including cyclical or annual reassessments, as well as on the plethora
of exemptions that benefit some taxpayers and push the burden onto all the others.
Numerous elected officials and assessors expressed the need for the state to reestablish
common standards of assessing. Statewide standards would also greatly facilitate certain
aspects of property tax relief, including the calculation details of both a levy cap and acircuit breaker.
The Commission recommends adoption of a statewide full value standard, which would
require that every parcel be valued at its estimated market value, i.e., at 100 percent offull value. This could be adjusted annually, or at a minimum on a three-year cycle for allassessing jurisdictions. A phase-in would be appropriate for communities requiring amajor reevaluation, and the restrictions on assessment increases which currently
primarily affect New York City and Nassau County, would need to be repealed. To assist
in the implementation of this program, the State through Office of Real Property Services(ORPS) would continue to provide aid to local assessing units when they conduct
revaluations.

Estimates of Savings from Recommendations Affecting School District
ExpensesCommission staff made high-level estimates of the potential expense savings from implementing
the recommendations for changes to state law and mandate relief that appear above. Commission
staff estimates that approximately $3 billion to $4.5 billion in statewide expense reductions ($2billion to $3 billion for all school districts outside New York City) could result from full
implementation of these recommendations. Commission staff estimates were not reviewed by theCommission.

92

Special Considerations: Rural School Districts
Rural School Districts
The Commission concluded, based on testimony, that the unique characteristics of rural school
districts warrant special consideration. Of New York’s almost 700 school districts, more than
300 are small and rural. Many of these districts are not just small but poor, yet their property tax
rates are high – reflecting their very weak tax bases. The Commission noted that the State may
not always adequately recognize the particular challenges posed by the poverty of many ruralschool districts.
Of these rural districts, 158 are classified as high-need districts. That is, they have comparatively
low revenues and low property wealth – the symptoms of a tax base that is getting weaker.
For example, the Commission heard from Larry Cummings, Executive Director of the Central
New York School Board Association who represents 50 small school districts in Central New
York. He spoke about Hannibal, a low-income school district in Oswego County, just north of
Syracuse. It has about 1,600 pupils, over 60 percent of who are at risk. Hannibal has one-third
the wealth of an average school district. The total value of the property in the school district isjust over $200 million – about $125,000 of taxable property per pupil.
Lawrence Kiley, Executive Director of the Rural Schools Association of New York State,illustrated for the Commission how these high-need, rural districts, like so much of Upstate, areexperiencing the effects of a net population outflow and a lagging economy. Specifically, of 158
high-need rural districts, the combined pupil population has declined just over 1 percent per year
for the last dozen years, with total pupil population declining from 196,000 in 1993-94 to
167,000 in 2005-06. The rate of decline actually increased, with these districts losing 1.5 percentof their pupils each year from 2000-01 to 2005-06, with a consequent reduction in tax base.
State aid growth rates vary from district to district based on several factors but generally tend tofavor those districts that have suffered population losses. Districts with declining pupil counts
are more likely to have higher per pupil state aid increases than those with consistent or risingpupil counts.
The current foundation formula has been targeting larger per pupil state aid increases to highneed rural districts when compared to urban and suburban districts. The combined annual
growth rate of per pupil state aid to high-need rural districts is 5.9 percent from 1993-94 to 2006­
07. The combined annual growth rate during this period for all school districts outside of New
York City was 5.0 percent. High-need rural districts have also fared better than high-needurban/suburban districts in terms of per pupil state aid growth.

93

The Commission’s recommendations, we believe, will have a major salutary effect. The average
citizen in these districts is likely to benefit strongly from a revised property tax circuit breaker
benefit, which provides individual tax relief. The impact of mandate relief on rural high-need
districts will be substantial. Since these districts may not be able to offer services in addition to
instructional basics, relief from mandates, and other cost-saving measures recommended in thisreport will have the most meaningful impact in such districts.

94Appendix A: Executive Orders
No. 22: ESTABLISHING THE NEW YORK STATE COMMISSION ON PROPERTY TAXRELIEF
January 23, 2008
WHEREAS, high local property taxes impose a tremendous burden on New York taxpayers, including forcing
seniors out of their homes, driving our young people out of our state, and discouraging the formation and expansionof businesses; andWHEREAS, New York’s per capita local tax burden is the highest in the nation, and is more than twice the national
average; andWHEREAS, school district property taxes account for 61% of the property taxes paid by New Yorkers outside of
New York City, and these taxes have been growing by an average of 7.3% annually; andWHEREAS, local property taxes have continued to rise, despite last year’s historic increase in state education
funding and numerous State efforts to relieve the property tax burden; andWHEREAS, there is a need to uncover the root causes of high property taxes, with particular examination of
unfunded mandates on both school districts and municipalities;
WHEREAS, the State’s annual investment of $5 billion to lessen the impact of property taxes through the School
Tax Relief (STAR) program has not mitigated the need for school districts to raise taxes over the past few years; andWHEREAS, consideration must be given to the implementation of a fair and effective cap on school district
property taxes while maintaining educational quality; andNOW, THEREFORE, I, Eliot Spitzer, Governor of the State of New York, by virtue of the authority vested in me by
the Constitution and laws of the State of New York, including section six of the Executive Law, do hereby establish
the New York State Commission on Property Tax Relief, with the following membership, responsibilities andpowers:1.

The Commission shall be comprised of the following seven members: Thomas R. Suozzi, who shall be the
Chair, Shirley Strum Kenny, Basil A. Paterson, Nicholas J. Pirro, Michael A. Solomon, Merryl H. Tisch,and Paul A. Tokasz.

2.

The Commission shall examine and investigate the management and affairs of any and all departments,
boards, bureaus or commissions of the State of New York with respect to the issue of local property taxes,
including, but not limited to:(a) the root causes of New York’s high property tax burden, including the expenditures of local
governments and school districts, unfunded mandates imposed by the State, and other factors
driving the growth of local property tax levies;(b) the impact of increased state financial support and state taxpayer relief and rebate programs on local
school district budgets and tax levies;(c) the extent of public involvement in the development and approval of school and other local
government budgets;(d) the effectiveness of the various state mechanisms to provide property tax relief to different classes of
taxpayers;95

(e) the effectiveness of property tax caps as a mechanism to control growth in school district tax levies,
the experience of other states in implementing such caps, and the potential impact of such caps on
educational achievement; and(f) the most effective approach to imposing a limit on local school property tax growth in New YorkState without adversely impacting the ability of school districts to provide a quality education to
all students.
3.

The Commission is hereby empowered to subpoena and enforce the attendance of witnesses, to administer
oaths or affirmations and examine witnesses under oath, to require the production of any books, records or
papers deemed relevant or material, and to perform any other functions that are necessary or appropriate tofulfill its duties and responsibilities, and I hereby give and grant to the Commissioners all powers andauthorities that may be given or granted to persons appointed by me for such purpose under authority ofsection six of the Executive Law.

4.

The Commission shall be assisted by an Executive Director and such other staff as shall be designated by
the Governor, including but not limited to staff from the Office of Real Property Services, the Governor’s
Office of Regulatory Review, the Division of the Budget and the Department of State.

5.

A majority of the total members of the Commission shall constitute a quorum, and all recommendations of
the Commission shall require approval of a majority of the total members of the Commission. Members of
the Commission shall serve without compensation but shall be reimbursed for all actual and necessary
expenses incurred in the performance of their duties. No member of the Commission shall be disqualified
from holding any public office or employment, nor shall he or she forfeit any such office or employment byvirtue of his or her appointment hereunder.

6.

Every agency, department, office, division, public authority or political subdivision of the State shallcooperate with the Commission and furnish such information and assistance as the Commission determines
is reasonably necessary to accomplish its purposes.

7.

The Commission shall issue a final report no later than December 1, 2008, setting forth its findings andconclusions and making such recommendations as it shall deem necessary and proper. In addition, theCommission shall issue such interim reports as it shall deem necessary, including an interim report no later
than May 15, 2008 setting forth the Commission’s recommendations with respect to a statutory school
property tax cap.

G I V E N under my hand and the
Privy Seal of the State in the City of Albany
this twenty-third day of January
in the year two thousand eight.

Eliot Spitzer
BY THE GOVERNOR

Richard Baum
Secretary to the Governor

96No. 1: CONTINUATION AND REVIEW OF PRIOR EXECUTIVE ORDERS
March 20, 2008
WHEREAS, an orderly transition is essential for the effective administration of State government; andWHEREAS, in order to help facilitate such transition, a careful review of existing Executive Orders should be
conducted to ensure their continued effectiveness and desirability;
NOW, THEREFORE, I, David A. Paterson, Governor of the State of New York, by virtue of the authority vested in
me by the Constitution and laws of the State of New York, do hereby order as follows:
1. The Counsel to the Governor, in conjunction with the Secretary to the Governor, the Director of the
Budget and the Director of State Operations (the “Review Committee”), shall review and evaluate all
Executive Orders and amendments heretofore issued and currently in effect.
2. This review shall be conducted within the next 90 days, and following such evaluation the Review
Committee shall make such recommendations as it deems appropriate for the continuation, modification or
revocation of all such Executive Orders and amendments.
3. Every agency, department, office, division and public authority of the State shall cooperate with thisreview and shall furnish such information and assistance as shall be requested by the Review Committee.
4. All Executive Orders and amendments heretofore issued and currently in effect shall remain in full force
and effect until otherwise continued, modified or revoked.

G I V E N under my hand and the
Privy Seal of the State in the City of Albany
this twentieth day of Marchin the year two thousand eight.

David A. Paterson
BY THE GOVERNORCharles O’Byrne
Secretary to the Governor

97

Appendix B: Summary of Recommendations
Principal Recommendation: Implement a School Property Tax Cap
to limit the growth of school property taxes.
The cap would have these elements:•

The levy cap would be set at 120 percent of CPI or 4 percent increase,whichever is lower: This is the same formula that applies to the current contingency

budget that goes into effect when school budgets fail to pass. Unlike the levy cap in
Massachusetts, which is established in law at 2.5 percent, this formula is somewhat
higher and allows some flexibility for inflation.
•

New construction should be added to the levy limit: The construction of new

homes and businesses, and major additions and renovations of existing buildings expand
the school district's tax base without affecting existing taxpayers. This new
growth should be added to the levy cap each year. In the three years ending in 2007, themedian annual growth from net new construction in New York has exceeded one percent
statewide.
•“Banking” unused Levy Cap: If the maximum levy growth permitted under the cap is

not used in a given year, the unused portion would be “banked” and may be used in any
future year to increase the levy by up to 1½ percent. This provides an incentive to save
tax capacity for future years.
•

Separate capital expense / debt service vote: Capital items – either as a one-time

expense or debt service – would continue to be authorized by public vote, and would not
be included within the levy cap. If approved by voters, such exceptions would last until
payment for the capital item is completed.
•

Budget Votes Limited to Overrides: The current school budget voting process would

be replaced by a cap override vote. School districts would not have to submit theirbudgets to the voters in years when the tax levy growth does not exceed the levy cap.
Levy growth in excess of the levy cap would have to be approved by the voters. By not
requiring a vote when the tax levy growth is within the cap, the votes that do take place
will take on a greater significance.

98•State Aid growth affects override vote margin. The vote required to override thelevy cap would be contingent on state aid growth by district. If the annual growth for a
district of specified core state aid programs is at least 5 percent in the current year, thevote needed to override the levy cap would be 60 percent. If annual growth of state aid isless than 5 percent, a 55 percent vote would be needed to override the levy cap. This
assumes that state school aid funding decisions would be reached sufficiently in advanceof school budget decisions and the public votes.
•

Underride: Voters could also place on the ballot an “underride” vote to keep the levy

growth to a level beneath the calculated levy cap.
•

Dependent Districts: The Big Five cities (New York City, Buffalo, Rochester,

Syracuse and Yonkers) have “dependent” school districts within their city budgets. As aresult, Big Five property taxes are not specifically earmarked for education. Thus, theproperty tax cap does not apply to these cities.

Other Recommendations
Circuit Breaker•

Restructure STAR to fund a new “Star Circuit Breaker” to target individual tax relief.

Changing State Law and Mandate Relief
The Commission recommends that the State support school districts’ efforts to rein in the costsof salaries, pensions and health care, as well as general operating and capital expenses. These
recommendations address the root causes of high property taxes by adopting the following
proposed solutions:
Reduce the Burden of Excessive Mandates•

No new legislative or regulatory mandates without a complete accountingof the fiscal impact on local governments, which must include full documentation,
local government input and proposed revenue sources to fund the new mandates.

•

Mandate accountability through an annual report from the Office of the State

Comptroller, which should include the cumulative cost to localities of complying
with all new regulatory and legislative mandates.
Decrease School District Personnel Costs•

Adopt regional or statewide collective bargaining agreements.
99•

Increase health insurance premium contributions by employees andprovide health insurance coverage jointly with other public employers or school
districts, including increased use of health benefit trusts.
•

Convene a study to evaluate creating a Tier 5 in the pension system for

new employees.
•

Amend the “Triborough” provision in collective bargaining to exclude teacher

step and lane increments from continuation until new contracts are negotiated, andcentralize reporting of school district collective bargaining outcomes.
Limit Other School District Operational Costs•

Repeal the Wicks Law, or significantly increase the threshold amounts fordetermining when separate contracts are required in construction projects.
•

Increase threshold amounts for purchasing under competitive bidding

requirements.
•

Increase participation in statewide energy efficiency programs throughcollaborative efforts of state entities.
•

Centralize and streamline school district reporting to decrease personnel

and other costs associated with sometimes duplicative and unnecessary forms andother filing requirements.
•

Simplify or eliminate other individual education mandates.

Improve Special Education•

Shift the emphasis of the State Education Department from regulatory
enforcement to outcome-based accountability through targetedintervention to promote best practices in school districts.
•

Dramatically accelerate the integration of special education withgeneral education, improving and increasing opportunities to benefit

students who need extra help within the general education setting.
•Decrease special education classification rates by requiring the State

Education Department to review those school districts with classification rates
20% higher than the state average and determine whether assistance is needed.
•

Reduce the cost of litigation by promoting alternative dispute resolution,

improving the consistency and effectiveness of hearing officers, and by shifting100the burden of proof back to the plaintiff except when the family is unable toafford counsel.
•

Increase collaboration to enhance local and regional service delivery to

students.
•

Secure additional federal funding to reduce the pressure on the property tax.

Seek Economies of Scale and Enhanced Educational Opportunities
School District Consolidation•

Require consolidation of school districts with fewer than 1,000
students and grant the Commissioner of Education discretionary
authority to order consolidation of school districts with fewer than
2,000 pupils to achieve economies of scale and to increase educational

opportunities through expanded course offerings.
•

Restructure state reorganization aid to ensure that it is used predominantly

to pay for reorganization expense or to provide needed services, and temporarilysuspend building aid for districts being consolidated.
•

Amend State law to simplify consolidation by removing anachronistic
distinctions between, union free, central and city school districts.

Shared Service Delivery•

Eliminate State Education Department approvals for participation by
BOCES in agreements with other local government entities to provide
non-instructional services, and remove the BOCES district superintendentsalary cap to ensure qualified candidates for this leadership position.
Grant Mayoral Control and Provide Funding Flexibility in the “Big Four” Cities•

Exempt the Big Four city school districts from the proposed property
tax cap.

•

Adjust the maintenance of financial effort requirements to reflect
declining student populations.

•

Grant mayoral control for the Big Four school districts, with a sunset

provision.

101Encourage Efficient Delivery of Social Services•

Provide social services to students in schools by directing appropriate

agencies to collaborate and coordinate with each other and with school districts.
Address Other Equity Concerns for Property Taxpayers•

Create countywide property tax assessment and uniform statewide

assessing standards.

102

Appendix C: School District Funding, Expense and Pupil Counts Outside of New York City

103

Appendix D: White Papers Received by the Commission
Batt, William H. Can a Circuit Breaker Ever Really Work? Center for the Study of Economics. 23 Apr. 2008.
Batt, William H. Generational Equity in Housing. Property Tax Considerations. Center for the Study of Economics.
Feb. 2008.
Batt, William H. The Limits of Property Tax Relief. Presentation to New York State Commission on Property Tax
Relief. 23 Apr. 2008.
Batt, William H. Property Tax White Paper. Center for the Study of Economics. Apr. 2008.
Deutsch, Ron. Taxes in New York State: Restoring Fairness and Equity to the Personal Income Tax to Reverse
Decades of Reliance on the Property Tax-Short and Long Term Solutions. New Yorkers for Fiscal Fairness.
(Undated).
Droz, John. What Needs to be Fixed with the NYS Property Tax System: The Goals are Equability and Fairness. 8
Apr. 2008.
Hugunin, Peter. Assessment: Violation of the Public Trust. Mar. 2008.
Hugunin, Peter. Over-Assessments: The Rabbit Out of the Hat, and a Dysfunctional Grievance Process. 13 Aug.
2008.
Koehler, Thomas. Comments on Proposed School Property Tax Cap. 25 Mar. 2008.
Lav, Iris. Comment to the New York State Commission on Property Tax Relief. Center on Budget and Policy
Priorities. 20 Feb. 2008.
Manhasset Citizen’s Advisory Committee for Legislative Affairs. Citizen Comment to the Commission on Property
Tax Relief. 27 Apr. 2008.
Mauro, Frank. Property Taxes in New York: A State Problem Calling for a State Solution. Fiscal Policy Institute. 11
Feb. 2008.
McMahon, E.J. Enough is Enough: Why and How to Cap New York’s School Property Taxes. Empire Center for
New York State Policy. 3 Mar. 2008.
Nassau-Suffolk School Boards Association. Position Paper on School Property Tax Cap. 4 Aug. 2008.
New York State. Commission on Local Government Efficiency and Competitiveness. Root Causes:
Considerations in Investigating the Root Causes of New York’s High Property Tax Burden. Albany: 2008.
New York State Council of School Superintendents. Historical and Regional Trends in School Finance. Apr. 2008.
New York State Council of School Superintendents. Recommendations for Effective and Efficient Special
Education. Nov. 2008.
New York State. Department of Taxation & Finance, Office of Tax Policy Analysis. Issues in Designing Property
Tax Relief Through “Circuit Breaker” Credits. Albany: 2008.
New York State School Boards Association. Alternatives to the Real Property Tax: A Special Report to the New
York State Commission on Property Tax Relief. Mar. 2008.
New York State School Boards Association. Excelsior!: Key Drivers Behind New York’s ‘Ever Upward’ Property
Tax Burden. Apr. 2008.
New York State School Boards Association. Pension Reform for the 21st Century Workforce. Apr. 2008.

104

New York State School Boards Association. Quality Educators in Every School. Mar. 2008.
New York State School Boards Association. Recommended Mandate Relief for School Districts. Mar. 2008.
New York State School Boards Association. Report of the Task Force on Maximizing School District Resources.
Oct. 2008.
North Shore Schools Board of Education. Position Paper: Property Tax Caps and School Costs. Oct. 2008.
Ogilvie, Donald. Economics of Financing NYS Schools. Erie 1 Board of Cooperative Education Services. 2Apr.
2008.
Rand, George. Critique of the Preliminary Report of the New York State Commission on Property Tax Relief andRecommendations for the Final Report. 10 Oct. 2008.
Rand, George. Teachers and Administrators Salaries and Benefits Must be Capped to Achieve Property Tax Relief.
21 Apr. 2008.
Rivera, Manuel. Unfunded Mandates: Considerations in Investigating the Potential Root Causes of New York’s
High Property Tax Burden. 30 Jan. 2008.
Rodgers, Thomas. The Tax Cap Con. New York State Council of School Superintendents. Feb. 2008.
Rye City School District. Position Paper on School Property Tax Cap Proposal. 26 June 2008.
Rye Neck Union Free School District School Board and Superintendent. Letter to the New York State
Commission on Property Tax Relief. 15 Apr. 2008.
Siver, Harold C., Jr. A Proposed Two Phase Solution to the Current Education Funding Crisis as Viewed from the“Trenches.” 11 May 2008.
Sweeney, Sharon. White Paper. Four County School Boards Association. Apr. 2008.
Tedisco, James. The State of New York Schools: Addressing the Burden of Unfunded Mandates-Real Solutions,
Real Relief. New York State Assembly Republican Conference. May 2008.
Whiteley, John. Tri-County Committee for Property Tax Relief. Inequitable Weighting of Property Values in
Combined Wealth Ratio for State Aid. Nov. 2008.
Whiteley, John. Local Control-A Mixed Blessing: Who Votes, Who Pays Taxes, and What is the Impact on Local
Budgets, Tax Levies, and Individual Tax Burdens? New York State Property Tax Reform Coalition. Apr.
2008.
Whiteley, John. Rational of Proposal. New York State Property Tax Reform Coalition. Mar. 2008.
Whiteley, John. Revised Proposal for Systemic School Funding Reform to be Combined with Relief via Galef-Little
Circuit Breaker. New York State Property Tax Reform Coalition. Apr. 2008.
Whiteley, Roberta. Just a Few Money Saving Ideas. New York State Commission on Property Tax Relief. 16 Apr.
2008.

105

Appendix E: Hearings and Testimony
Individuals/Groups Who Presented Testimony (in presentation order):Meeting 2
FEBRUARY 12, 2008, NEW YORK STATE MUSEUM: ALBANY, NY
Frank Mauro, Executive Director, Fiscal Policy Institute
Edmund J. McMahon, Director, Empire Center for New York State Policy
Hon. Elizabeth Little, Chair, New York State Senate Local Government Committee
Hon. James Tedisco, Minority Leader, New York State Assembly
Hon. Catherine Nolan, Chair, New York State Assembly Education Committee
Hon. Herman D. Farrell, Chair, New York State Assembly Ways and Means Committee
Hon. David Valesky, Ranking Member, New York State Senate Agriculture Committee
Hon. Stephen Saland, Chair, New York State Senate Education Committee
John Whiteley, Legislative Liaison, New York State Property Tax Reform Coalition
Thomas L. Rogers, Executive Director, New York State Council of School Superintendents
David Little, Director of Government Relations, New York State School Boards Association
Peter Baynes, Executive Director, New York Conference of Mayors and Municipal Officials

Meeting 3
MARCH 5, 2008, SUFFOLK COUNTY LEGISLATURE: SMITHTOWN, NY
Edmund J. McMahon, Director, Empire Center for New York State Policy
Hon. William Lindsay, Presiding Officer, Suffolk County Legislature
Hon. Lynn Nowick, Legislator, Suffolk County Legislature
Hon. Diane Yatauro, Presiding Officer, Nassau County Legislature
Hon. Harvey Levinson, Chair, Nassau County Board of Assessors
Richard Bivone, President, Nassau Council of Chambers of Commerce
Gary Bixhorn, Chief Operating Officer, Eastern Suffolk BOCES
William Johnson, Superintendent, Rockville Centre School District
Charles Murphy, Superintendent, Sachem School District
Martin Cantor, Director, Long Island Economic and Social Policy Institute at Dowling College
Lisa Tyson, Director, Long Island Progressive Coalition
Mary Jo O’Hagan, Secretary/Treasurer, Nassau-Suffolk School Boards Association
Martin Kaye, Board Member, West Hempstead Board of Education
Michael White, Executive Director, Long Island Regional Planning Board
Hon. Kate Browning, Legislator, Suffolk County Legislature
Andrea Vecchio, Member, East Islip Unit of Suffolk County PAC
Bennett Rechler, Executive Board Member, Association for a Better Long Island
Fred Gorman, Member, Long Islanders for Educational Reform (LIFER)
Michael Bernard, Executive Board Member, New York State Assessors’ Association
John Whiteley, Legislative Liaison, New York State Property Tax Reform Coalition
Brian Schneck, Co-chair, Suffolk County Working Families Party
Evelyn Blose-Holman, Superintendent, Bay Shore School District
Maureen Dutcher, Assistant Superintendent of Business, Bay Shore School District
Lilly Knox, Association of Community Organizations for Reform Now (ACORN)
Barbara Erickson, Taxpayer
Bob Dinato, Taxpayer
Anita McDougal, Taxpayer

106

Meeting 4
MARCH 5, 2008, TARRYTOWN PUBLIC LIBRARY: TARRYTOWN, NY
Edmund J. McMahon, Director, Empire Center for New York State Policy
Hon. Andrew Spano, County Executive, Westchester County
Hon. John Faso, Former Minority Leader, New York State Assembly
Hon. Drew Fixell, Mayor, Village of Tarrytown
William Mooney, President, Westchester County Association
Hon. Ken Jenkins, Legislator, Westchester County Board of Legislators
Hon. Jose Alvarado, Legislator, Westchester County Board of Legislators
James Langlois, District Superintendent, Putnam/North Westchester BOCESTim Conway, Assistant Superintendent, Brewster School District
Howard Smith, Superintendent, Tarrytown School District
Joanne Sold, Vice President, Ardsley Board of Education
Lisa Tane, Board Member, Briarcliff Manor Board of Education
Sarah Stern, President, Edgemont Board of Education
Janet Walker, Executive Director, Westchester/Putnam School Boards Association
Hon. Richard Randazzo, Former Supervisor, Town of Cornwall
Robert Shaps, Superintendent, Hastings-on-Hudson Schools District
Peter Breslin, President, Katonah-Lewisboro Board of Education
Barbara Walker, Member, Westchester/Putnam Working Families Party
Irving Feiner, Member, New York State Property Tax Reform Coalition
Jim Timmings, Assessor, Town of Mount Pleasant
Deborah Sutton-Garvin, Member, Common Ground New York City
Hon. Gloria Fried, Receiver of Taxes, Town of Ossining
Thomas Frey, Executive Secretary, New York State Assessors’ Association
Hon. Steven Otis, Mayor, City of Rye/Counsel and Chief of Staff, New York State Senator Suzi Oppenheimer
Hon. Andrea Stewart-Cousins, Senator, New York State Senate

Meeting 5
MARCH 20, 2008, ROCHESTER CITY HALL: ROCHESTER, NY
Hon. David Paterson, Governor, New York State
Hon. Sandra Frankel, Supervisor, Town of Brighton
Hon. William Pritchard, Vice President, Rochester City Council
Tom Nespeca, Board Member, Webster Board of Education
Hon. Robert Duffy, Mayor, City of Rochester
Tom Scherer, President, Geneva Board of Education
John Abbott, Deputy Superintendent, East Irondequoit School District/Member, Monroe 2-Orleans BOCES Board
Michael Ford, Superintendent, Phelps-Clifton Springs School District
Jody Siegle, Executive Director, Monroe County School Boards Association
Daniel Buerkle, Taxpayer Alliance
Hon. Mary Ellen Heyman, Supervisor, Town of Irondequoit
Tammy Gurowski, Alliance for Quality Education
Rosemary Rivera, Alliance for Quality Education
Lawrence Quinn, President, New York State Assessors’ Association
Tom Gillet, Regional Staff Director, New York State United Teachers
John Greenbaum, Metro Justice
William McCoy, Metro JusticeHon. Richard Moy, Supervisor, Town of Clarendon
John Whiteley, Legislative Liaison, New York State Property Tax Reform Coalition
Carole Kraus, Representative, New York State Property Tax Reform Coalition
John Keevert, Treasurer, Interfaith Impact of New York StatePaul Kramer, Taxpayer
Jay Gsell, County Manager, Genesee County
John Ryanne, Business Owner, Rochester

107

Meeting 6
APRIL 2, 2008, HEALTH NOW/BLUE CROSS/BLUE SHIELD BUILDING: BUFFALO, NY
Janet Penska, Commissioner of Administration, Finance, Policy and Urban Affairs, City of Buffalo
Hon. Lynn Marinelli, Chair, Erie County Legislature
Hon. Andrea McNulty, Legislator, Niagara County Legislature
David Smarczniak, Board Member, West Seneca School Board of Education
Andrew Rudnick, President and CEO, Buffalo Niagara Partnership
Donald Ogilvie, Superintendent, Erie 1 BOCES
Hon. Terry Keeley, Supervisor, Town of Portville
Joe Tette, Business Administrator, Wilson School District
Ramona Popowich, President, Williamsville Board of Education
James Anderson, Regional Board Chair, Citizens Action of Western New York
Hon. Satish Mohan, Supervisor, Town of Amherst
Hon. Maria Whyte, Majority Leader, Erie County Legislature
Roger Cook, Representative, Working Families Party of Western New York
Ellen Kennedy, Board President, Citizens Action of New York
Robert Bennett, Chancellor, New York State Boards of Regents

Meeting 7
APRIL 10, 2008, SYRACUSE CITY HALL: SYRACUSE, NY
Hon. Bea Gonzalez, President, Syracuse City Council
Frank Mauro, Director, Fiscal Policy InstituteWilliam Duncombe, Professor, Syracuse University, Maxwell School
John Gamage, Commissioner, Department of Assessment, City of Syracuse
Hon. Bill Meyer, Chairman, Onondaga County Legislature
Larry Hart, Central New York Property Tax Alliance
Mike Masse, Board Member, Fayetteville–Manlius Board of Education
Rick Timbs, Executive Director, Statewide School Finance Consortium
Larry Cummings, Executive Director, Central New York State School Boards Association
Jessica Cohen, Superintendent, Cortland/Onondaga/Madison BOCES
Randy Kerr, Board Member, Newark Valley Board of Education
Joe Mareane, Chief Fiscal Officer, Onondaga County
C. Thomas Bailey, Executive Secretary, Cooperative Organization for Public Education
Linda Yancey, Assessor, Town of Forestport
Larry Kiley, Executive Director, Rural Schools Association
David Duerr, Executive Vice President, Greater Syracuse Chamber of Commerce
Hon. Thomas Seals, Councilmember, Syracuse City Council
Margrit Diehl, Parents for Public Schools
Mark Spadafore, Executive Director, Syracuse Alliance for a New Economy
Ralph Martone, Taxpayer
Bill Hicht, Taxpayer
Anthony Rossi, Taxpayer
Phil Dann, Taxpayer
Dick Barry, Taxpayer
John Carroll, Taxpayer
Joan Johnson, Taxpayer
Jane Palla, Taxpayer
Dan Lowengard, Superintendent, Syracuse City Schools
Hon. Richard Gladu, Councilmember, Town of Hague

108

Meeting 8
APRIL 23, 2008, STATE EDUCATION BUILDING, CHANCELLOR’S HALL: ALBANY, NY
Richard Mills, Commissioner, New York State Education Department
Robert Lowry, Deputy Director, New York State Council of School Superintendents
Hon. Gerald Jennings, Mayor, City of Albany
Hon. Kathy Jimino, County Executive, Rensselaer County
Alan Lubin, Executive Vice President, New York State United Teachers
Timothy Kremer, Executive Director, New York State School Boards Association
Rebecca Cort, Deputy Commissioner, Vocational and Educational Services for Individuals with Disabilities, NewYork State Education Department
Kenneth Pokalsky, Director, Environmental and Regulatory Programs, Business Council of New York StateJohn Lincoln, President, New York Farm Bureau
Richard Bivone, President, Nassau Council of Chambers of Commerce
Bruce Ventimiglia, Vice Chair, Business and Labor Council of New YorkJohn Whiteley, Legislative Liaison, New York State Property Tax Reform Coalition
Vaughan Smith, Hudson Valley Property Tax Reform Task Force
Bernetta Calderone, Citizen of Gardiner/Member of Taxnightmare.org
Marlis Momber, Citizen of New Paltz/Member of Taxnightmare.org
Hon. Susan Zimet, Legislator, Ulster County Legislature
Robert McKeon, Tax Reform Effort of North Dutchess (TREND)
Richard Longhurst, Assistant to President, New York State Congress of Parents and Teachers
Bill Batt, Center for the Study of Economics
Tom Lee, Executive Director, New York State Teachers’ Retirement System
Richard Young, Actuary, New York State Teachers’ Retirement System
James Baldwin, Superintendent, Questar III BOCES
Ron Deutsch, Executive Director, New Yorkers for Fiscal Fairness
Robert Biggerstaff, Executive Director, New York State Association of Small City School Districts
G. Jeffrey Haber, Executive Director, Association of Towns of the State of New York
Steven Van Hoesen, Director of Government Relations and Professional Support Services, New York State
Association of School Business Officials
Hon. Ken Zalewski, Councilman, City of Troy
Mary Evans, Resident, Town of Malta
Richard Wray, Member, New York State Property Tax Reform Coalition
Hon. Richard Gladu, Councilmember, Town of Hague
John Peck, Resident, Town of Bleecker
Doug Adams, Member, Property Tax Reform Task Force

109

Meeting 9
September 9, 2008, NASSAU COUNTY THEODORE ROOSEVELTEXECUTIVE AND LEGISLATIVE BUILDING: MINEOLA, NY
Jay Worona, General Counsel, New York State School Boards Association
Kathleen Feeley, Associate Professor, C.W. Post University
Jackie Harris, Director, Long Island Association of Special Education Administrators
Patrice Dobies, Director of Special Education Pupil Services, East Meadow School District
Bill Bushman, Director of Special Services, Shoreham-Wading River School District
Elizabeth Defazio-Rodriguez, Director, Long Island Parent Technical Assistance
Graham Kerby, Taxpayer
Gary Bixhorn, Superintendent, Eastern Suffolk BOCES
Ron Friedman, Superintendent, Great Neck School District
Donna Jones, Superintendent, Brentwood School District
Bill Johnson, Superintendent, Rockville Centre School District
Jay Williams, Superintendent, Amityville Union Free School District
Mary Jo O’Hagan, Nassau-Suffolk School Boards Association
Peter Quinn, Taxpayer
Hon. Harvey Weisenberg, Assemblyman, New York State Assembly
Andrea Vecchio, Long Islanders for Educational Reform Tax Pact
Frank Russo, President, Port Washington Educational Assembly
Laura Pandelakis, Taxpayer
Anita McDougal, Taxpayer
Amy Certilman, School Board, Cold Spring Harbor School District
Joseph Mugivan, Taxpayer
Eloise Meyer, Taxpayer
George Rand, Taxpayer

Meeting 10
October 2, 2008, STATE EDUCATION BUILDING, CHANCELLOR’S HALL: ALBANY, NY
Rebecca Cort, Deputy Commissioner, Vocational and Educational Services for Individuals with Disabilities, NewYork State Education Department
Alan Lubin, Executive Vice President, New York State United Teachers
Tom Rogers, Executive Director, New York State Council of School Superintendents
Maria DeWald, President, New York State Parent/Teachers’ Association
Georgia Asciutto, Executive Director, Conference of the Big 5 School Districts
Charles Dawson, Deputy Director of Governmental Relations, New York State School Boards’ Association
Peter Mannella, Executive Director, New York State Association for School Pupil Transportation
Rita Levay, Co-President, Council of New York Special Education Administrators
John Whiteley, Legislative Liaison Officer, New York State Property Tax Reform Coalition
Joseph Mugivan, Taxpayer
Eric Ely, Superintendent, Schenectady School District
Susan Rollin, Taxpayer

110Meeting 11
October 22, 2008, YONKERS RIVERFRONT LIBRARY: YONKERS, NY
Hon. Andrea Stewart-Cousins, Senator, New York State Senate
Hon. Philip Amicone, Mayor, City of Yonkers
Bernard Pierorazio, Superintendent, Yonkers Public Schools
James Langlois, Superintendent, Putnam/ Northern Westchester BOCES
William Mooney, President, Westchester County Association
Lisa Davis, Executive Director, Westchester-Putnam School Boards Association
Mark Betz, Assistant Superintendent for Business, Bedford Central School District
Lorette Magnone Adams, Treasurer, West Nyack Free Library Association
Lisa Tane, Vice President, Briarcliff Manor School Board
Edward Fox, School Board, Rye City School District
Eugene Wolotsky, Director of Pupil Services, Blind Brook-Rye Union Free School District
Hon. Ronald Tocci, Former New York State AssemblymanFrank Pepe, Superintendent, Arlington Central School District
Judy Weiner, Lower Hudson Education Coalition
Ronnie Cox, President, Mount Vernon Educational Foundation

Meeting 12
October 30, 2008, BUFFALO & ERIE COUNTY PUBLIC LIBRARY: BUFFALO, NY
Hon. Byron Brown, Mayor, City of Buffalo
Wayne Schlifke, President, New York State School Boards Association
James Mazgajewski, Superintendent, Cheektowaga-Sloan School District
Susan Kuznik, Chairwoman, Niagara Falls School District Committees on Special Education and Pre-School
EducationDavid Smaczniak, Erie County Association of School Boards
James Bodziak, Superintendent, East Aurora School District
Phil Rumore, President, Buffalo Teachers Federation

Meeting 13
November 5, 2008, ROCHESTER CITY COUNCIL CHAMBERS: ROCHESTER, NY
Jean Claude-Brizard, Superintendent, City of Rochester School District
Willa Powell, Chairwoman, Finance Committee of the Rochester Board of Education
Malik Evans, President, Rochester Board of Education
Jody Siegle, Executive Director, Monroe County School Boards Association
Hon. Robert Duffy, Mayor, City of Rochester
Howard Maffucci, Superintendent, East Rochester School District
Susan K. Savagio, Superintendent, Sodus Central School District
Jodie Perry, President, Greece Chamber of Commerce
Tom Leadbetter, School Board, Newark School District
Judy Wolf, Taxpayer
Daniel Buerkle, Taxpayer Alliance
Jeff Llewelyn, Taxpayer
John Ryanne, Business Owner, Rochester111

Meeting 14
November 12, 2008, ONONDAGA COUNTY LEGISLATIVE CHAMBERS: SYRACUSE, NY
Hon. Matt Driscoll, Mayor, City of Syracuse
Hon. Bill Meyer, Chairman, Onondaga County Legislature
Daniel Lowengard, Superintendent, City of Syracuse School District
Johanna Duncan-Poitier, Senior Deputy Commissioner of Education, New York State Education Department
James Baldwin, Superintendent, Questar BOCES III
Donald Ogilvie, Superintendent, Erie 1 BOCES
Jessica Cohen, Superintendent, Onondaga-Cortland-Madison BOCES
William Speck, Superintendent, Cayuga-Onondaga BOCES
Joseph Pabis, Superintendent, Auburn Enlarged City School District
Corliss Kaiser, Superintendent, Fayetteville-Manlius Central School District
Rick Timbs, Executive Director, Statewide School Finance Consortium
James Rowley, Chief Fiscal Officer, Onondaga County Legislature
Darlene Kerr, President, Greater Syracuse Chamber of Commerce
William P. Fisher, Upstate Mandate Relief Commission
John Whiteley, Legislative Liaison Officer, New York State Property Tax Reform Coalition
James Viola, Director, School Administrator’s Association of New York State
Jane Suddaby, Oswego County BOCES
Phil Dann, Taxpayer
Marilyn Dominick, Superintendent, Jordan Elbridge School District
Bill Hecht, Taxpayer

Additional Written Testimony Submitted to the Commission by:
Stephen Acquario, Executive Director, New York State Association of Counties
Hon. Maggie Brooks, County Executive, Monroe County
Hon. Byron Brown, Mayor, City of Buffalo
Matthew Crosson, President, Long Island Association
Max Donatelli, Member, New York State Parents Teacher Association
Garry F. Douglas, President and CEO, Plattsburgh North Country Chamber of Commerce
Hon. Patricia Eddington, Assemblymember, New York State Assembly
Catherine Glover, President & CEO, Greater Binghamton Chamber of Commerce
Hon. Jeff Klein, Deputy Minority Leader, New York State Senate
Mark Lansing, Partner, Hiscock & Barclay
Andrew Licari, Resident, St. James
William Lynch, President, New York State Association of Small City School Districts
Hon. Joanne Mahoney, County Executive, Onondaga County
Hon. Michael Manning, Mayor, City of Watervliet
George Miner, President, Southern Tier Economic Growth
Bob Orosz, Resident, Garden CityArt Sciorra, City Manager, City of Ogdensburg
Donna Stefanacci, Member, Working Families Party
Karen Zevin, Member. Regional Educational Advocacy Group.

112

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