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Let's see how it works for a few years... before we start lopping away pieces of it.

Cuomo vetoes bill to allow schools to borrow against pension funds

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Governor Cuomo has vetoed a bill that would have allowed school districts to borrow up to $1 billion dollars against the worth of their pension funds, saying the bill would be fiscally irresponsible and reckless, and would undo much of what Cuomo's tried to do with his 2% property tax cap. Karen DeWitt has the details.

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Karen DeWitt
NYS Capitol Correspondent

The bill, which surfaced late one evening during the final days of the legislative session, was rapidly approved in both houses of the legislature. It would have permitted schools to borrow against their pension funds, to help meet operating expenses over the next couple of years. The districts would then repay the bonds with interest, and charge the cost to tax payers.

The Citizens Budget Commission, a budget watchdog group, lobbied against the measure, saying it would essentially defeat the purpose of the 2% across the board property tax cap recently approved by the legislature and championed by Cuomo. 

The Commission’s Betsy Lynam says Cuomo was wise to reject the measure.

“A veto is definitely the right step,” said Lynam. “Let's see how it works for a few years and what kinds of discipline it does impose before we start lopping away pieces of it.”

The tax cap expires in five years, with an option for the legislature and governor to renew it. 

Governor Cuomo, in a statement, says the bill would have permitted the borrowing by the school districts without voter approval, and he says New Yorkers “have made it clear that they will no longer tolerate the fiscal irresponsibility and reckless spending that has driven their property taxes through the roof.”

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