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Tuesday, July 16, 2024 | Back issues
Courthouse News Service Courthouse News Service

NY Teachers Union Challenges Tax Cap

ALBANY, N.Y. (CN) - The state's largest teachers' union sued New York, claiming the state's property tax cap on school districts unconstitutionally hampers their ability to educate students.

The cap, enacted in 2011, limits increases in school and local property taxes to 2 percent a year or to the rate of inflation, whichever is less.

The law requires school boards that want to exceed the cap get approval from 60 percent of the voters in their districts. This "places an undemocratic and unconstitutional supermajority requirement on votes for school budgets," the New York State United Teachers says in its complaint in Albany County Supreme Court.

Other local governments subject to the cap - cities, towns, villages, counties and special taxing districts for fire, library, sewer and other services - need only a supermajority vote of their governing boards, which most often is the same mathematically as a simple majority, according to the complaint.

"The apparent purpose and practical effect of the tax cap is to limit the ability of school boards and school district voters to increase school funding beyond that permitted under the tax cap, and to deter efforts to exceed the tax cap," according to the complaint.

As a result, the teachers say, "The tax cap has the effect of perpetuating and widening the existing gross education funding inequities between school districts," which hit poor and minority students particularly hard.

In New York state, the wealthiest 10 percent of school districts already spend an average of 50 percent more per student than is spent by the poorest 10 percent of districts, the union says in the complaint.

Albany-based NYSUT, a federation of local unions representing current and retired school, college and health-care workers - including 98 percent of public school teachers in the state - brought the lawsuit on behalf of a handful of plaintiffs who are voters in school districts across New York. Many are parents of school-aged children and some are also teachers.

Named as defendants are the state, Gov. Andrew Cuomo, state Education Commissioner John King and state Comptroller Thomas DiNapoli.

A first-year report on the tax cap, issued by the governor's office in September 2012, called it a success. Of the 678 school districts in the state, 95 percent stayed within the cap; 81 percent of the 2,399 local government units reporting a proposed levy did likewise, according to the report .

It said the cap was needed to counter New York's "negative tax climate reputation," where the $4,090 median property tax paid by a homeowner is twice the national median.

The teachers union says it is not seeking a court-ordered increase in schools' local tax levies or state aid to education.

"Rather, the essence of plaintiffs' claim is that the state cannot legally justify an education funding system that permits gross disparities in district funding and educational opportunities for school children, and then impose an arbitrary, across-the-board percentage cap on local spending."

The 50-page complaint offers a history lesson on how education is funded in New York.

As far back as 1795, New York took a role in supporting a statewide system of "common schools," with state aid to fund them augmented by local taxes. That system essentially still exists today, except in the "Big Five" school districts of New York City, Yonkers, Syracuse, Rochester and Buffalo, which are governed and financed by their cities.

But the state's share of school funding, which typically averaged 41 percent to 47 percent annually, has been drifting lower, the union says. For the 2011-12 school year, it was 39.7 percent, the lowest percentage in a decade.

Changes to other state aid formulas also occurred in recent years, leaving many districts "on the verge of actual financial insolvency," according to the complaint.

So state aid has been "capped" even as the property tax cap limits the amount school districts can raise through taxation.

But the state constitution, which provided early on for "common schools," requires that all children receive "a sound, basic education so as to function as a productive citizen."

The NYSUT claims the tax cap "deprives school children of their rights ... by arbitrarily and unequally limiting the right and ability of local school boards and school district taxpayers to address existing funding inequalities, and to provide enhanced educational opportunities, if they choose to do so."

The cap also interferes with constitutional "local control" provisions that school boards and district voters are supposed to have over education.

And it has a "chilling effect on the free expression and voting rights of taxpayers" by discouraging attempts to exceed the tax cap unless a supermajority can be achieved, according to NYSUT.

The plaintiffs, represented by NYSUT General Counsel Richard Casagrande, ask that the tax cap be declared unconstitutional as it applies to school districts, and that a permanent injunction bar its application to education funding.

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