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The legislature and the governor have got to get together and come up with an overall plan, and quickly.

Funding expert: NY schools on "sliding slope" toward fiscal insolvency

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Voters across New York state will decide Tuesday whether or not to approve their local school district budgets, and the property tax levies needed to pay for them. School budgets are complicated, to say the least, and they're even more complicated this year because the new 2% property tax increase cap is putting additional limits on what school boards can ask for. Many schools have had to make serious cuts in the last couple years--and are now looking at more.

We heard last week on how one rural school district is trying to balance its financial needs with money coming from local taxes and the state. For a wider view, WRVO's Catherine Loper spoke with Rick Timbs, executive director of the Statewide School Finance Consortium. They spoke about the effect this year's budget cycle will have on schools and the future of education funding in New York--and about new questions raised by the tax cap:

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Catherine Loper
news director, WRVO

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Now what the tax cap has done has actually closed down another revenue stream for school districts. Technically speaking, school districts then, during these cuts, could rely on taxpayers to try and fill in the gap after school districts got finished using more fund balance, cutting staff and opportunities, anything that was left they could usually rely on taxpayers to help with. But the new tax cap law put limits on what the taxpayers can and should pay, and therefore what has actually happened is that it has actually changed the political dynamic, the way people look at budgets, as if there is some type of artificial cap on the amount of taxes that can be increased through a tax levy from a school district.”

Some would argue poverty tax relief was badly needed in parts of the state.

“Oh, there’s no doubt about it. I think everybody would say that actually they did want property tax relief, but this could have been mitigated if the state was able to fulfill its promise that it made. When you’re lacking seven billion dollars over four years, then obviously you can only cut so many programs and use up so much fund balance; it just doesn’t come back. Truly I think everybody recognized that the rate of increase of taxes had to be slowed down, and I think it has been. But at what cost? Part of this is simply a transfer of the burden from the state to local citizenry. And if the local citizenry refuse to accept that burden, then the school district must adhere to cuts.”

Do you think that we will see most budgets pass this year, as they normally pass by an overwhelming majority?

“Well I would hope so. But the problem is going to be is going forward. Even if most of these pass, or all of them pass, or a huge majority of them pass, will school districts have the capacity to keep this type of work going? Will they be able to continue to use fund balance (for) good staff. And I would suggest, no they’re not.”

Some of the districts we spoke to said, ok if there’s going to be a cap, then at least the state should reduce the number of mandates to the districts so they can figure out more things to cut. What do you think about that?

“That’s probably a good idea. See part of the problem is that school districts are hugely regulated and have a huge number of fixed costs, many of which are beyond total control of a school board or a school district. (A) school district cannot make a lot of unilateral decisions on its own. It either needs permission and compliance with a bargain unit, or the state. And in some cases, those are not forthcoming. In other cases, you know, unions have made concessions and so on and this has kind of held back some of these cuts, but unions won’t make concessions forever. So, a more long term solution has got to be revealed somehow, especially if the state could actually get back on the formula as it had promised. The dilemma is that these unfunded mandates have life cycles. In other words, they are on automatic pilot, I would say. For instance, pension costs keep escalating. School board has no control over those.”

How would you just sort of sum up the current and future state of school funding in New York State?

“I would say that the current state of school funding in New York state has put almost every school district on a sliding slope towards educational and fiscal insolvency. I think the legislature and the governor have got to get together and come up with an overall plan, and quickly. Time’s running out.”

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