By Marc Humbert
Senior Writer

School funding is the state Assembly’s highest priority, and that’s one reason it’s unlikely that New Yorkers will see a state-imposed cap on school property taxes anytime soon, according to state Assembly Speaker Sheldon Silver.

“The caps are not going to work,” the Manhattan Democrat said during a wide-ranging interview. He spoke with On Board in his darkly-paneled, high-ceilinged office tucked conveniently just off the floor of the cavernous Assembly chamber that he has ruled since 1994.

Sitting on one of two matching burgundy couches near his large desk, Silver looked worn out if not exhausted. As afternoon sunlight filtered in through the room’s two huge mullioned windows, Silver sipped coffee and reflected on the mood in the Capitol as well as a number of brewing education issues.

Since David Paterson became governor, the mood is “upbeat,” Silver said. “There is a much more collegial environment among legislators, among governor’s staff,” Silver said. “The ability to work things out is something that people look forward to. Not being dictated to.”

On the tax cap, Silver said he saw no way that the state could make up for school funding that would be lost under a cap, Silver said. “The question is can you impose a (local) school income tax,” he said. Such a tax would avoid problems associated with property taxes, particularly for retirees who feel taxed out of their homes. But “from a practical political point, I don’t think you can.”

Silver said he was well aware, however, of the widespread anti-property tax sentiment, which prompted former Gov. Eliot Spitzer to name a commission earlier this year headed by Nassau County Executive Tom Suozzi to come up with a tax cap plan.

Asked what advice he would give Suozzi, Silver said, “Probably I would tell him to look for a dedicated tax.” Silver said he even had one in mind – raising tax rates on New Yorkers with incomes above $1 million. Silver said that could raise $1.5 billion for schools. While Silver said the public would support such a move, the “millionaires’ tax” was already rejected earlier this year by state Senate Repub-lican Majority Leader Joseph Bruno.

On other issues, Silver said:

• Nothing is politically more important to state lawmakers than school aid. “Educating our children should not know the ups and downs of the economic cycle. The future of New York depends on those children and we can’t tell them, ‘Sorry, revenue collections aren’t so good this year.’”
• 2009 will likely be a tough year for putting together the next state budget. But Silver believes New York’s economy will rebound in the third or fourth quarter of the current fiscal year that ends March 31, 2009. Gov. David Paterson has painted a much less rosy picture, already saying state agencies may have to cut spending by 5 percent to 10 percent next year.
• Teachers’ unions really do have the political muscle they are often credited with. “There’s no question about it.”
• The two-year ban on the use of student test scores in evaluating teachers for tenure purposes is a good example of the limits of interest groups’ power in Albany, including the teachers’ unions. “I think we crafted a solution that didn’t satisfy anybody. But that’s usually a good solution, when all the parties aren’t that happy with it.”

The Assembly leader said he planned to seek re-election this fall to the lower East Side seat he has held since 1976, and pending a successful outcome, said he has no plans to soon abandon the speakership he has held since 1994.

“Senator Bruno is 79 years old. So I have told him that I have to see what it’s like when I get to his age,” said Silver, 64.