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For Release — May 6, 1999

MOST SCHOOL DISTRICTS RAISED TAXES BY MORE THAN INFLATION RATE, STUDY SHOWS; TAXPAYERS' SAVINGS FROM 'STAR' PROGRAM AT RISK

ALBANY—More than 400 school districts in New York State raised per-student taxes by more than the inflation rate in 1997, a new "Tax Watch" study by The Public Policy Institute finds.

Fully 405 districts increased per-student taxes by more than 2.3 percent from 1996 to 1997, while 119 districts reduced them, according to the Institute's analysis of data made available recently by the Office of the State Comptroller. Another 130 districts raised taxes during the year, but by less than the inflation rate, the Institute said. The 2.3 percent level represents the federal government's official estimate of inflation for state and local government services from 1996 to 1997.

"If school districts continue raising taxes at this rate, they will take back the property-tax savings Governor Pataki and the Legislature are providing homeowners through the STAR program," said Daniel B. Walsh, president/CEO of The Business Council. "The goal is to reduce the property tax burden on both residents and businesses, not increase it." The STAR program started taking effect for senior citizens in 1998, after the period covered by the new data from the Comptroller's Office.

The Institute, research affiliate of The Business Council of New York State Inc., examined data for the 656 school districts outside New York City that have enrollment of 250 or more students. Its study is part of an ongoing "School Tax Watch" announced by the Institute two years ago. School districts report data on tax collections and spending to the Office of the State Comptroller, which publishes the numbers annually.

Residents of school districts across the state will vote on proposed school budgets Tuesday, May 18.

For all the districts studied by the Institute, total school tax collections rose 4.1 percent from 1996 to 1997. With a slight increase in enrollment, just less than 1 percent, per-student tax collections increased by an average 3.5 percent for all districts outside New York City. Total state aid rose slightly during the year, to $6.7 billion for the districts studied. Revenue from interest on investments rose more than 10 percent, to $236 million in 1997, as districts carried substantial cash balances for much of the year.

Spending on salaries and wages, the largest single category of expenditure by the school districts, rose 3 percent, while employee benefit costs decreased slightly. Contractual expenditures increased 4 percent, and spending on equipment and capital projects rose sharply, by 28 percent.

Per-student tax collections in 1997 averaged $5,707 for all the districts studied, compared to $5,512 in 1996, according to the data reported by the Office of the State Comptroller. State aid to schools averaged $3,870 per student in 1997, up slightly from the previous year.

Sixty districts saw per-student tax collections increase by 10 percent or more. The largest per-student increases were in the Shoreham-Wading River, Hinsdale, Silver Creek, Greenwich, Phelps-Clifton Springs, Bradford, Hudson, Romulus, Westport and Central Square districts. The largest decreases in per-student tax collections were in Chautauqua Lake, Odessa-Montour, Avoca, Syracuse, Hornell, Lakeland, Little Valley, Fonda-Fultonville, Green Island and Amsterdam.

Districts outside New York City collected a total of $9.7 billion in property taxes in 1997. Some 172 districts also collected revenue from local sales or utility taxes, totaling $218 million.

New York's per-pupil spending for elementary and secondary schools is the third-highest in the country. National Education Association figures show New York schools spent an average of $9,812 per student in 1998, 50 percent above the national average.

The Business Council is New York's largest broad-based business group, representing over 3,000 member companies large and small across the state. Based in Albany, it lobbies for a better business climate, and offers cost-cutting services to its members.

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Tables 1-7 and Notes and the complete listing of school districts analyzed

Table 3:
Largest Tax Reductions Among School Districts Outside New York City With 2,500-9,999 Students, 1996-97

Table 6:
Largest Tax Increases Among School Districts Outside New York City With 250-999 Students, 1996-97

Complete Listing of School Districts