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LEAGUE WEIGHS IN ON TAX CAPS AND CIRCUIT BREAKER

On August 19, 2008 the League weighed in on Governor Paterson’s Program Bill 62, introduced as S8736, imposing a tax cap on school district increases, and  A11838, a need-based real property tax circuit breaker program and millionaire’s tax.  The League opposed both of the bills on the grounds that they represented one-house bills designed to provide political cover for the upcoming elections rather than the series of serious recommendations for real property tax reform and education finance reform outlined in the Suozzi Commission preliminary report. As predicted, each bill was passed by one chamber and went no further.

In formulating its positions on these 2 bills, the League drew upon its updated financing K-12 education and real property taxation positions to recommend:

  • Awaiting the final Suozzi Commission report before tackling the issues of education finance and property tax reform;
  • True implementation of a foundation approach to education, with annual cost-of-living adjustments.  Under this approach the funds to provide a sound basic education would be provided by the state, after subtracting a reasonable local contribution;
  • Creation of a reserve fund for education that would stabilize foundation funding (generated primarily by the state income tax)in times of economic downturn;
  • Folding the entire STAR program into a real property circuit breaker program;
  • Implementation of additional Suozzi Commission recommendations for cost saving as part of the reform package;
  • Raising any additional state funds necessary to fund a foundation approach to education;
  • Implementation of a tax cap only in conjunction with an entire reform package.

The League has had a longstanding interest in education finance and property tax reform, having studied these issues over the past 25 years as part of ongoing investigation into the manner in which New York State funds crucial services.  The League last updated its positions in these areas in 2006, when, after a year-long study, it determined that:

  • The state should adopt a foundation approach to funding education;
  • Additional funding required to provide all children with a sound basic education should be provided by means of the state personal income tax, implemented in a progressive fashion;
  • Cost-savings should be implemented by replacing the constellation of STAR programs with a real property tax circuit breaker program based on need and indexed to inflation;
  • Stability in the funding of education should be increased by creation of an education reserve fund, calculated to stabilize state funds available for education purposes in times of economic downturn.

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