The Cahill Bill

 

 

TITLE OF BILL : 

 

An act to amend the education law, the real property tax law and the tax law, in relation to abolishing certain school taxes, providing for alternative taxes and state distribution to school districts; and repealing certain provisions of the real property tax law and the tax law relating to certain taxes

 

PURPOSE : 

 

The purpose of this plan is to permit the financing of public schools in New York State within the context of the following objectives:

 

1) the elimination of the inequitable and regressive real estate tax as the support of public schools;

 

2) the retention of present levels of local control by school districts; and

 

3) the guarantee of quality and equality of educational opportunity for all children of the state.

 

SUMMARY OF SPECIFIC PROVISIONS :

 

The plan consists of the following basic principles:

 

1) The state shall assume all the costs of Basic Quality Education (BQE), including all general and special education services which the commissioner, under guidelines established by the legislature, shall define as necessary. Basic quality education as defined by the commissioner, shall allow sufficient latitude so that choices may be made by local districts with respect to their individual needs. "BASIC" shall be defined in terms of equal services to all pupils regardless of differences in cost in different districts for those services.

 

2) The "BASIC" costs shall be borne by increases in statewide business and individual income taxes in conjunction with the elimination of school district real estate taxes. New York City, which does not identify the school portion of its real estate taxes, and also collects an income tax, shall apply the full amount of the school portion of its budget toward a reduction in the real estate tax. The same formula shall apply to the cities of Buffalo, Rochester, Syracuse and Yonkers. Property tax reductions would be passed through to tenants on a pro-rate basis where lease permits. Where this is precluded by a lease, tenants will be entitled to tax credits or

rebates on their state income taxes for the duration of the lease.

 

3) BASIC budgets shall be submitted by local boards of education to the State Education Department for approval.

 

4) All monies for BASIC budgets shall be collected by the state through the business and personal income tax. The "BASIC Education Tax" shall be levied as a percentage of the business or individual income tax.

 

5) Transition period: During the first (seven) years after enactment, a district may opt to receive as its BASIC BUDGET one of following: a) budget amount of the school year during which this law shall take effect (dollar save harmless); b) the district budget of the school year during which this law shall take effect increased or decreased by changes in enrollment (pupil save harmless); or c) the amount resulting from the application of the BQE formula, but not to exceed the average statewide increase over the prior year, plus 10% growth ceiling. After five years only option (c) will apply.

 

JUSTIFICATION : 

 

This legislation would eliminate the use of regressive real estate taxes for the purposes of funding education. The bill first and foremost ensures that every child has access to the same quality education regardless of where they live or the level of their family's income. By eliminating the school real property tax and shifting to a more progressive statewide income tax, we will be able to fund our schools equitably, fairly and more affordably for all New Yorkers.

 

Grassroots movements in every region of the state, have pushed education funding reform to the forefront. There are groups fighting for property tax relief, the Campaign for Fiscal Equity fighting for more funding for New York City schools and small cities and towns all across upstate New York struggling to balance their school budgets.

 

Since 1995, local property tax levies have grown by 60 percent, more than twice the rate of inflation during that period (28 percent). Most of this growth occurred in the last 5 years -- when property tax levies increased by 42 percent, compared to inflation of 13 percent. The cost of education has been the driving force behind these

destabilizing increases.

 

The bill requires the definition of a basic quality education be developed in such a way that school districts retain sufficient latitude to devise their budgets based on individual needs. In creating a schedule of mandatory services and authorized costs, the State Education Department will be directed to take regional cost differences into account. Perhaps the most critical aspect of this proposal, as it relates to local control, is that the initiatives and expenditures that give each individual school district its own identity -- programs that might not be deemed required to ensure a basic quality education but are certainly necessary to give our children the experience of a fully enriched education -- can still be funded through a locally raised income tax subject to the approval of the district voters.

 

The only way we are going to achieve meaningful school financing reform is to proceed with the core societal value of this being about our children. Ensuring that each and every child has access to the same basic quality education regardless of where they live, how high their family's income is or how much their property is valued, should be our top priority. The state has a moral and legal obligation to ensure equity in our education system statewide.