Written by John E. Brooks
The objective of this proposal is to provide all School Districts in the State of New York with the ability to provide a quality education to the students enrolled in that district by means of establishing a statewide equitable funding method.
OVERVIEW OF CURRENT SYSTEM:
Educational funding under the current system makes use of three principal funding methods, state aid which is financed by means of state taxes, local residential property taxes and local commercial property taxes. While the state has attempted to provide state aid by means of formulas that take into consideration both need and affordability, the system has resulted in a wide disproportionate level of funding within geographic regions and local neighborhoods. The current formula does not consider the expense management of the school district, the contribution levels made to educational funding by the homeowner versus the commercial property tax owner and the special needs required by students within the school district. As a result the state aid and consequently the state budget has resulted in annual battles between upstate and downstate, city and suburban areas and the result of many have and have not districts. Each year a band aid is placed on the formula to make some adjustments but in the end the system itself no longer works for the education community, the students and the taxpayers of this state.
For many areas of New York State the primary funding source for education is now property taxes. In Nassau County 85% of education is now funded by local property taxes in Suffolk County it is 80%. For school district that do not have large commercial property tax sources the tax burden is almost totally on the homeowner.
ESTABLISHMENT OF EDUCATIONAL ECONOMIC ZONES:
Under the current method of funding education in New York State, each district has three primary funding or revenue methods: personal property taxes, commercial property taxes and state aid. This current method has resulted in a significant imbalance of tax rates and educational funding from district to district that are in close geographic proximity. It is also widely understood and agreed that there is a need to recognize regional cost factors that are reflective of the economic conditions and costs in the many regions of this state. Some regions have significantly higher cost of living expenses than others resulting in the cost of similar services varying by as much as thirty percent from one region of the state to another.
Under the Educational Funding Reform Proposal the State Department of Education will submit for approval to the State Legislature sixteen (16) Educational Economic Zones. Each Educational Economic Zone will be made up of school districts in the same geographic region that have similar “cost of living” factors that will take into consideration all relevant regional cost factors. . The City of New York is an Educational Economic Zone unto itself.
The State Legislature may select any number of Educational Economic Zones they feel needed. The objective of the Educational Economic Zones is to allow the State to take into consideration regional cost factors in establishing the core cost of education. These same zones could also be used to established special economic aid as addressed further in this proposal.
ESTABLISHMENT OF THE CORE EDUCATIONAL EXPENSE FACTOR:
The State Department of Education will establish a CORE Educational Expense Factor for each Educational Economic Zone that represents the minimum (average for zone) cost of the states required core educational programs on a per student basis. The expense factor will take into consideration the cost of books (with a reasonable replacement schedule), the cost of teacher salaries, all building related expenses, transportation costs for students at state guidelines, all required support services, and reasonable administrative salaries and expenses. The Core Educational Expense Factor will not include the additional cost of special education and special needs students.
After the establishment of these initial factors, the State Department of Education will be required to submit revised annual Core Educational Expense Factors by Educational Economic Zone each year on January 1st to the State Legislature. The State Legislature will have until March 1st to revise these factors. After March 1st the Educational Factors that have been established by the Department of Education or those revised by the State Legislature shall be used for the school year to commence July 1st.
The establishment of Core Educational Expense Factors will for the first time give some responsibility to the State Education Department to help control educational costs. In establishing these cost factors the state will for the first time have to address student to teacher ratios, class size, Regional averages for Administration size and expense, sports programs, text book replacement and compensation programs.
STATE FUNDING LEVELS OF EDUCATION:
The State of New York will provide to each public school district by means of the funding methods outlined in this proposal 100% of the Core Educational Expense Factor for all students attending each school district. For students attending private educational programs within the County of Residence, the state will provide 20% of the Core Educational Expense Factor to the local school district to provide for transportation costs, text books and other services. The local district expense for all non public students’ shall be limited to 20% of the Core Educational Expense Factor.
FUNDING OF THE CORE EDUCATIONAL EXPENSE FACTOR:
The funding of the Core Educational Expense Factor will have two primary sources of funding:
Personal Income Taxes:
On a statewide basis, the amount of 70% of the cost for the Minimum Educational Expense Factor for all students attending public schools will be paid by a statewide educational income tax. The tax rate will be universal for all residents and income earners in the state who have earned an income above the minimum income level. It shall be the responsibility of the State Comptroller to establish this tax rate by June 1st each year to be effective the following July 1st. It shall also be the responsibility of the Comptroller to insure a minimum allowance is included in this tax rate to compensate for any shortfalls that may result from reduction in income from year to year. A minimum reserve shall be maintained by the state for these shortfalls. All excess funds in this account will be used to reduce the educational income tax on a statewide basis.
Under current pension programs many governmental and educational employees have been fully exempted from state income tax. Under this program consideration can be given to the establishment of an educational income tax which would include those now exempt for any retirement in disability benefit above a certain amount (perhaps $30,000). Today these individual pay no income tax but the resident are force to pay all increase in health insurance and other related programs with no contribution from these individuals.
Commercial Property Taxes:
On a county basis, the amount of 30% of the cost for the Core Educational Expense Factor for all students attending public and private schools within the county shall be funded by means of a county wide educational property tax. This tax will be based on the assessed value of the commercial property and paid to the local receiver of taxes. The local receiver of taxes will provide the funding to the local school district for all students that reside within that school district. The local school district will then provide the funds to any private school for those students who reside within the district but are attending a private school within the county. No Commercial Property Tax Funds shall be provided for a student attending private school outside the county of residence.
[Under this proposal, the local school districts will no longer be required to fund the cost of those students from the district who elect to go to private schools. Commercial Property Taxes will be divided equally for all students of both public and private schools within the county. Since this tax will be on a countywide basis it will be more stabilized. Those students who elect to be educated at a private school outside of the county will not be provided any public funds for their education. Members of many communities support commercial properties like malls and entertainment centers; therefore all communities shall share the funds raised for education. Special taxes like fire, roads, and lighting will continue to be collected under the commercial property taxes as they are now.]
SPECIAL IN DISTRICT COMMERCIAL PROPERTY TAXES:
At times commercial and special use facilities are required to provide special services to communities that are viewed to have a negative impact on the value of the community and are generally not desired by a community. These type facilities can range from a jail or prison to a sewer treatment plant, utility power generation plant, a waste treatment facility or chemical storage or treatment facility. As these facilities have an adverse effect on the community. A special property tax will be added to these facilities and provided solely to the school district in which they are located. The state legislature will develop a list of these types of facilities and the special tax to be levied within 90 days of passage of this proposal. This list may be amended at the start of each legislative session but such amendments must be completed and approved not later than January 31. The funds generated by this provision shall be aid provide to the district in addition to the Core Educational Expense Factor.
ADDITIONAL EDUCATIONAL COSTS ABOVE THE CORE EDUCATIONAL EXPENSE FACTOR:
Special Education Costs:
The Core Educational Expense Factor shall not include the cost of special education or other special needs students. Each School District shall submit to the State Department of Education by September 1st the anticipated additional cost for each special education student or special needs student in the District. The State Education Department shall review and approve the expenses associated with each student. The department may increase or reduce the expenses for any student based on the department’s review and the information submitted by the District. The additional funding required for these students will be provided to the School District by April 1st each school year. These Funds will be provided as part of the Legislature’s Educational State Aid Fund.
The State Education Department for the first time will assume responsibility within the educational budget for the expenses associated with the programs they have approved for these students. This new responsibility may lead to the development of more effective programs for these students.
State Aid for Emergency Situations:
The State Legislature may provide to a School District, Educational Economic Zone, or all Educational Economic Zones in the state special economic assistance during times of emergencies. These funds can be used to help with the repair of schools following disasters, to help offset the Commercial Educational Property Taxes for areas with significant economic problems, or to fund special educational programs on a state wide basis. Emergency State Aid for Education shall require a 60% approval vote of each House of the Legislature and must detail the purpose and use of all funds. This legislation may not have any non-education-related amendments included within the request for funds.
This proposal gives the Legislature the ability to address emergencies that may come to pass but requires that 60% or more of both houses are in agreement. The objective here is to force the Legislature to work together to address these needs.
School District Spending Requests:
A School District that requests to spend more than the Minimum Educational Expense Factor per student, or would like to use more lenient transportation guidelines or offer additional programs may do so by funding those programs by means of a Special Property Tax to be paid for by the property owners of the school district. Such a tax may not include the commercial property within that school district. A School District that would like to spend these additional funds must submit for approval of the voters of the District a Special Budget on the first Tuesday in April of the preceding school year. The District Special Budget must be renewed (approved) each year by the voters of the School District. A Special Budget that fails to win the approval of the voters may be re-voted upon once. That vote must be held on the first Tuesday in May. The Receiver of Taxes as will collect the Special Educational School District Tax as is done under the current funding laws.
[This allows districts that want to spend more the ability to do so, but requires the cost be paid for by the residents of the district upon their voted approval. The commercial property within the district would not be subject to this additional tax, further stabilizing their tax rate over today’s system.]
EDUCATIONAL FUNDING SOURCES:
There shall be four sources of funding for all School Districts in New York State:
a) Commercial Property Taxes.
b) State Educational Assistance Grants.
c) Personal Income Taxes.
d) Special School District Property Taxes.
Each of these sources will be detailed below as to how funding from those sources would be provided to the individual school district.
Commercial Property Taxes: The tax rate would be set at the county level for all commercial taxes. The tax rate would be set for a three-year period. The only increase in taxes a commercial property would be subject to in the three-year period would be if the assessed value were adjusted. The Commercial Property Taxes would be collected by the local tax collection authority and distributed to the school district or private school on September 1 of the new school year based on student enrollment.
This puts all districts within a County on the same level in terms of contribution from commercial property taxes. While districts that now get significant amounts of tax revenue from commercial property taxes will object to this change, they will be receiving the same level of state aid as all other districts within their county.
State Educational Assistance Grants: Funds for these programs would be approved by the state legislature and the distribution of these funds would be made on June 1 and December 1 of the School year.
Personal Income Taxes: These funds would be collected by the State Department of Taxes and distributed to all school districts on the following dates; July 1 (30%), October 1 (30%) January 1 (40%). The distribution of these funds would be based on the student enrollment report submitted 30 days prior to the payment date. A newly enrolled student would have to provide proof the parents or guardian of the child were paying New York State income taxes. Any student whose guardian did not pay taxes by means of using an out of state address to avoid the taxes would be subject to a full tuition charge to attend the school.
Special School District Property Taxes: These funds would be collected by the local tax collection agency and distributed on July 1 (60%) and January 1 (40%). The distribution of funds would be subject to the total tax collected for the district.
VOLUNTARY EXPENSE REDUCTION PROGRAMS:
School Districts may elect to participate in program that will reduce or eliminate some of the cost of support services by partnering with other districts to share services, resources or equipment. Districts who elect to participate in the programs noted below will continue to receive full funding of the core educational costs and the savings that result from these voluntary programs may be used to expand other educational programs in the districts.
Shared Services Agreements: Districts may elect to share services, or enter into joint purchasing agreements that provide expense savings as a result of bulk purchasing or single multidistrict contracts.
Administrative Districts: Multiple districts may at the approval of the voters of each district, elect to form an Administrative District. An Administrative District shall be defined as multiple school districts who shall one Central Administration Office that shall be staffed with one District Superintendent and any additional required administrative staff required to provide all central administrative business and personnel services for all member districts. Each of the member districts shall continue to be recognized as an individual school district and may continue to provide all educational, sports and extra curricular programs normally provided by a School District. Each District shall continue to elect a Board of Education and when required have a budget vote for the district. Each District shall continue to be funded under the formula of this proposal. The savings realized by the use of one Central Administration can be used by the member districts to expand educational programs or reduce any tax levy that may be required. The allocation of expenses for the central Administration Office of the Administration District shall be done based on student population of each member district. All member districts of an Administration District must be in the same Educational Economic Zone.
This is a significant and voluntary step forward in addressing administrative costs while at the same time "preserving local school districts economically".
John E. Brooks
PO BOX 2541Seaford NY 11783