Spending Watch


Bulletin #14: June 22, 1999
More school aid from Albany won't cut property taxes

It's clear that the new state budget will include another big increase in school aid. According to data from the New York State School Boards Association, Governor Pataki's budget would bring total aid to $11.5 billion. That would mean an increase of 4 percent, nearly $500 million, from last year. The Senate budget would boost state aid by $900 million, or 7.8 percent; the Assembly plan, by nearly $1 billion or 8.3 percent, according to the association's figures.

What will our new spending buy? The education establishment says more money from Albany will allow school districts to keep local property taxes under control. (We're also told extra state aid will pay for more programs to boost student achievement - how can it do both?)

School taxes rise, with big or small aid increases

The truth is, Albany cannot buy lower property taxes with more state aid. A look at the numbers proves that.

In 1997, the latest year for which comprehensive data are available, more than half the districts in the state increased per-student taxes by more than the inflation rate. Adjusting for enrollment increases, tax collections in districts outside New York City increased 3.5 percent. Total state aid rose just slightly that year, according to data from the Office of the State Comptroller.

In the two preceding years, state aid per student in these districts rose more than 7 percent. Enough to prevent property tax increases? No - local taxes per student also jumped by more than 7 percent!

Now, school spending diminishes the benefits of STAR

School taxes go up because spending goes up. This year, newspapers from Long Island, to Westchester, to Buffalo reported that big jumps in spending were driving above-inflation tax increases in most districts. Such tax hikes take back much of the savings homeowners should reap from the STAR program - and they severely penalize businesses, which aren't eligible for STAR.

The only way to restrain school taxes is to restrain school spending. For Albany, that means repealing costly mandates and avoiding new ones. In school districts across the state, it means more fiscal responsibility. Sending more of our tax dollars to Albany, to pay for more state aid, isn't the answer.