School votes are hiding issues

By The Associated Press

Sunday, May 17, 2009 11:33 PM EDT

ALBANY - Most New Yorkers will vote on local school budgets Tuesday that will increase spending and property taxes an average of 2 percent, one of the smallest increases in years.
But lurking are factors that make the vote a scarier prospect for schools and taxpayers. They include:

• Federal stimulus aid. Billions of dollars in federal economic stimulus grants support new levels of funding and help districts avoid cuts, but the aid ends in two years. Schools get $1.1 billion more, far less than typical increases to school aid, which is now more than $21 billion.

• Low inflation. That temporarily lowers at least some school districts' costs. Typical inflation would have put the 2 percent tax hike closer to the 5 to 7 percent averages of recent years. That trend prompted Gov. David Paterson to call for a cap on increases to what are among the nation's highest property taxes.

• Fixed labor costs. Teachers and administrators will get an average raise of 5.6 percent this year, based on labor contracts signed before the recession hit. Labor costs are about 70 percent of a school district's costs.

A Web site launched this week gave a peek at how much local teachers and administrators are paid. The database, provided by the Empire Center for New York State Policy, has drawn so much interest that it briefly locked up under the strain of 44,000 visits in its first 24 hours.

“When it comes time to vote on a school budget, the public has very little information,” said the Empire Center's Lise Bang-Jensen.

And harder times are ahead for schools and taxpayers.

In two years, pension fund payments by schools will spike to absorb losses of 10 percent or more on Wall Street investments. That two-year lag goes the other way, too: When the stock market recovers, schools face another lag before they see a rebound in returns.

“The loss of stimulus money and the increase in pension funding beginning in the 2010-11 school year are going to be a big hit on school districts,” said Tom Suozzi, the Nassau County executive who leads Paterson's tax cap efforts. “That's why it's essential we take action now. People's property taxes are still too high.”

Paterson's proposal would limit school tax increases to 4 percent unless local voters overwhelmingly supported lifting the cap. The idea died last year in the Legislature, where the powerful New York State United Teachers union opposed it. Paterson has renewed his effort, but this year's school budget votes may show that just raising the issue has been a victory for Paterson.

“There is definitely a concern over a property tax cap and obviously that's one of the things that has driven the lower tax levies this year,” said David Albert of the New York State School Boards Association.

He said school boards and administrators have “cut to the bone” to reflect the economic reality, including salary and health benefit concessions by employees and about 2,000 layoffs statewide. He expects more than 90 percent of budgets will be adopted Tuesday, or about the same number as in recent years.

“I think what happened really is the economy is falling apart so they have to worry about people voting `no' on their school budgets,” Suozzi said in a recent teleconference with reporters.

On the Net

Empire Center for New York State Policy: http://www.empirecenter.org

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There are 1 comment(s)

brew1234 wrote on May 18, 2009 3:09 AM:

" Salary increases of average 5.6% in this economy are not in line with reality. These unions need to give back these increases or suffer layoffs. They need to look ahead at the problems coming soon. "

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