EXECUTIVE BUDGET ANAYSIS
January 21, 2014
EXECUTIVE BUDGET QUESTIONS ANSWERED
Earlier today, NYSSBA state aid expert Brian Fessler and Governmental Relations Director Dave Little answered school district questions on the Executive budget proposal. The interactive presentation ran the gamut from the lack of Foundation Aid increase and minimal GEA reduction to the governor’s proposed bond act and Building Aid recalibration. Please join your NYSSBA advocacy team in making sure legislators know the ramifications of the governor’s state aid plan.
VIEW the presentation.
NYSSBA’S LEGISLATIVE BUDGET HEARING TESTIMONY
The legislative committees on education and state finance will meet in joint session tomorrow to hear testimony on Governor Cuomo’s Executive Budget proposal. NYSSBA will testify that the plan underfunds our schools, fails to provide a plan to eliminate the GEA and expands into new programs without paying for current ones.
VIEW NYSSBA’s Testimony
The NEW VETERANS EXEMPTION OPTION–WHAT YOU NEED TO KNOW
Recent changes to the Alternative Veterans Exemption authorize school boards to provide veterans with a partial break from school district property taxes. Previously, other local governments (counties, cities, towns and villages) were authorized to offer the partial property tax exemption to veterans. School districts could not.
HOW DOES THE EXEMPTION WORK?
In a nutshell, veterans and their spouses who served during a period of war or certain other conditions are eligible for an exemption based on whether the war-time veteran was in a non-combat zone, a combat zone or became disabled during service. The law provides percentage exemptions up to a maximum exempt amount for each category. School boards can reduce or increase amounts according to the individual veteran’s service, as specific in the law. Boards can also elect to extend the exemption to a Gold Star Parent of a deceased veteran who served during a period of war.
VIEW Additional details of the exemption.
Your local assessor’s office can help you estimate the amount of the total exemption that would be distributed to other residents based on the number of veterans in your area.
WHAT DOES THIS MEAN FOR BOARDS OF EDUCATION?
Some boards have already been approached by veterans and other community members, seeking to authorize the exemption to benefit the veterans in their districts. The governor and the legislature left the decision to school boards. (Not an easy decision for board members!) Veterans are deserving of our respect and gratitude, and many board members report wanting to provide the exemption. However, they are also concerned over the shifting of costs onto other local taxpayers at a time when many are struggling financially.
Since there is no income limit on veterans who receive the exemption, providing the tax benefit to veterans increases the property taxes for others in the community (including those residents that may be unemployed, those on fixed incomes and individuals with disabilities.) For those districts choosing to provide the exemption, the tax levy will not change, but the tax rate will increase for non-veteran property owners.
WHAT DO WE DO NOW?
NYSSBA recommends asking your community members prior to considering the exemption. The new law requires that boards must hold a public hearing prior to adopting the exemption. Keep in mind that a widely-publicized hearing affords the district an opportunity to inform a cross-section of the community on how an exemption would affect the property taxes of all residents. Following a public hearing and publicizing the issue in a district newsletter, consider placing a straw poll proposition on the ballot to gauge public sentiment on whether the board of education should adopt the exemption. The results can be published in the district newsletter.
Some boards are considering a school board meeting to also be a public hearing for this purpose. Be sure to confer with your school attorney to ensure your district legally satisfies the public hearing requirements including providing proper public notice.
For the exemption to be applicable in the current year, the deadline is the taxable status date; March 1st for most municipalities. Your local assessor’s office can confirm your district’s date. As a result, your board may feel public pressure to hold a hearing in February. However, be aware that the law does not provide a timeline; districts may pass a resolution to provide an exemption at any time. Given that school district budgets are already being formed, boards should consider adequately publicizing a hearing on the issue, holding that hearing, publicizing the results of the hearing and then conducting the straw poll later in the year, asking whether or not the community supports providing the exemption for the following year. This would prevent districts from experiencing immediate pressure to pass the exemption in the midst of current budget preparations.
HOW DID THIS HAPPEN?
NYSSBA opposed this legislation. While we successfully opposed a number of similar bills (for firefighters, EMTs and others), there was tremendous political pressure to provide a social response to the problems of this generation of combat veterans. While NYSSBA succeeded in the exemption being provided at board option, there is no question that this places them squarely between a deserving group and other hard pressed local taxpayers. NYSSBA advocated instead for an income tax credit, using that far broader base, rather than the limited property tax base in each individual school district. Simply put, if the state wanted to confer a benefit on a particular group, the state should have paid for it, rather than placing local schools in such a precarious position. This new law contradicts public comments made by state leaders on the importance of keeping property taxes affordable for all residents and businesses, in order to make New York attractive for economic development. NYSSBA will continue to advocate against using the local school tax to provide state benefits. We will be discussing the ramifications of this in our budget testimony on Tuesday, recognizing that this issue is compounded by the inadequate state aid proposal and lower property tax cap imposed on schools this year.