Imbalanced Tax Cap

   An unfortunate inequality is built into New York State’s new 2-percent tax-levy cap, which is becoming clear as school districts struggle to keep within that limit while local governments appear to be facing somewhat less immediate stress.

    For school districts that are grappling with rising costs, labor agreements, and state mandates, such as East Hampton and Springs, the cap has made budgeting for the next fiscal year more than difficult. In order to go beyond a 2-percent increase in the portion of school spending raised by taxes, districts would have to win at least 60 percent of the votes in their June budget referendums. It’s probably an understatement to say that could prove a high hurdle.

    By contrast, five-member municipal boards can exceed the 2-percent limit by a simple three-vote majority of the board — as about one-fifth of the state’s local governments did for 2012. And, as has been seen in the Town of East Hampton, for one, it is easy enough in the short term to slash local taxes by leaving jobs unfilled, eliminating some services, and dipping into surpluses. Of course, holding the line too much can set up a scenario when future costs will force local leaders to confront unpopular options. That can even be politically desirable if a rival party is in power when the bills come due.

    It is far more difficult for public schools to make trims, given contractual obligations, and in many cases rising student populations, than it is proving for New York’s towns and villages. This is undoubtedly not what the 2-percent cap’s backers intended because it puts too much of the burden for tax relief on educators and, by extension, students. Troubling, too, are indications, like one recently reported from State Comptroller Thomas DiNapoli, that some municipalities may seek to make up their budget gaps by tacking on new sales taxes and fees — something schools cannot do.

    The answer will not be in arbitrary or unfair limits but in systemic reforms in which municipal governments and school districts are not pitted against one another, each with their hands probing to varying depths in taxpayers’ pockets.