NYSUT challenges State’s Property Tax Cap in Court

February 22, 2013
Susan Smith, LaborPress Albany Bureau

ALBANY, N.Y.  – New York State United Teachers, seeking to protect public schools and students from an inescapable cycle of cuts and ensure the state's poorest and most vulnerable children are not further harmed by grossly inequitable education funding, challenged the state's property tax cap in court on February 20, 2013.

"We believe very strongly in the principle that every student, no matter where they live or go to school, should have the opportunity to receive a quality public education," said NYSUT President Richard C. Iannuzzi. "In challenging the constitutionality of the tax cap, we are fighting for that principle, just as we are fighting for the democratic principles of 'one person, one vote' and for the right of citizens, through local control of their schools, to determine for themselves how much they want to spend on their own community's schools."

NYSUT's lawsuit charges the tax cap enacted in June 2011 is unconstitutional because it arbitrarily caps property tax levy increases, under a complicated formula, at about 2 percent and, thus, locks in and perpetuates funding inequities between affluent and low-wealth school districts. The union said the tax cap unconstitutionally limits the ability of school districts and their taxpayers to address these inequities by exercising substantial local control, a concept enshrined in the state Constitution and which the Court of Appeals has ruled is the only "rational basis" for allowing unequal distribution of state aid to schools.

Among seven causes of action, the suit also defends the principle of "one person, one vote" in arguing that the 60 percent supermajority required to override the tax cap is unconstitutional. Under the tax cap, a citizen who casts a ballot in favor of exceeding the tax cap has only two-thirds the voting power of one who votes against the proposal.

"We need to have a meaningful conversation in the public arena about what equity in public education really means," Iannuzzi said. "We can no longer accept an education funding system which denies poor students the same life-enriching educational opportunities provided to students in more affluent communities, sometimes just a few miles away. The state's undemocratic tax cap is exacerbating glaring inequities in funding while pushing many school districts to the brink of educational and financial insolvency."

Iannuzzi added, "There is an unmistakable connection between poverty, the achievement gap and persistent shortfalls in state education funding. The state's ill-conceived property tax CAP only widens those gaps. NYSUT's motivation, in going to court and in its continuing advocacy efforts, is to force difficult conversations in Albany's corridors of power about how inequitable funding and this tax cap dooms generations of students to lesser educational opportunities."

Iannuzzi stressed the union's 600,000 members are also taxpayers who, too, feel the burden of rising local taxes and sympathize with efforts to control property tax hikes. Yet, he said, the most effective way to curb local school tax increases is through dramatically increased state support for public education as well as income-based circuit-breaker legislation, which would provide tax relief when property taxes rise beyond a homeowner's ability to pay.

NYSUT said the state has failed to invest adequately – and equitably – to address decades of educational neglect, as affirmed by the Campaign for Fiscal Equity case.

NYSUT's suit notes that New York State agreed in April 2007 to address the court's decision in the CFE case by investing $7 billion in additional state aid in low-wealth school districts. Instead, the state has repeatedly reneged on its funding commitments, pushing more and more of education costs onto the backs of local taxpayers. NYSUT underscored that state aid to public schools is virtually flat compared to 2007-08 and, despite a state increase in the proposed executive budget, is still projected to be about $300 million less in 2013-14 than in 2008-09, five years earlier.
NYSUT said, for example, the state's share of education funding, which once neared 50 percent, dropped to 39.7 percent in 2011-12, the lowest percentage since 1992-93.

The suit contains seven specific causes of action. In addition, the suit contests "poison pill" language designed to discourage school budgets from exceeding the tax cap as a violation of voting as free expression under the state constitution and First Amendment of the U.S. Constitution. And, the suit charges school district budget voters and education funding are treated unequally, in violation of equal protection clauses of both the state and U.S. constitutions, compared to non-school budget voters and non-education voting proposals. The suit notes most towns, villages and cities are comprised of a mayor, and four council members or trustees. Thus, the overwhelming number of local governments can exceed the tax cap with a 3-2 vote that satisfies the supermajority requirement mathematically, but in reality is nothing more than a simple majority.

February 22, 2013

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