Long Island Public School Spending Defies The Cap

Now that the school budget votes are behind us, it’s time to reflect upon the Newsday editorial from earlier this week that questioned why spending and taxes continue to rise beyond the rate of inflation, despite the imposition of a tax cap. This is something our Center has been talking about for quite some time.

The editorial astutely pointed out that spending on the Island’s schools is up 18% since 2012-13, while inflation was just 10%. Meanwhile, school enrollment in Suffolk declined by more than 5%.

They mentioned that, in the meantime, the amount that schools have to contribute to pension costs have been almost halved since they peaked in 2014-15, primarily a result of improved returns from the stock market. Why is it that taxes and spending seem to soar when our pension contribution nearly doubles, but never seems to go down when the contribution is halved?

They also mention that while press releases touted no raise contracts in the height of the recession, there never really were “no raise” contracts, thanks to automatic annual step increases. They are alluding to the Triborough Amendment, which guarantees the step increase even after a contract has expired. The elimination of the Triborough Amendment has been one of our Center’s top 3 mandate relief priorities.

We have also fought to prevent the cap from being circumvented through excessive borrowings.

We will continue to focus on getting our Albany representatives to finally address these issues.

Long Island public school spending defies the cap

2% limit on tax hikes has helped, but budget growth still outpaces inflation

When Long Islanders vote on school budgets Tuesday, they will be presented with the latest in a string of annual spending plans that are not escalating as quickly as they once did but are still growing at a distressing pace. School taxes are a primary reason why this region is becoming unaffordable.

To stem that, in 2010, New York State imposed a property tax cap of 2 percent a year, or the rate of inflation, whichever is lower, to curb increases that averaged 6 percent annually in the preceding decade.

But mostly because of generous annual increases in state aid that have averaged about 4 percent a year and the exemption of certain expenses from the tax cap, school spending in Nassau and Suffolk counties has risen at nearly double the rate of inflation, despite the cap. Spending on the Island’s schools is up 18 percent since 2012-13, while inflation was just 10 percent. That’s your money, whether it’s funded by state income taxes coming through the back door or property taxes upfront.

School budgeting is complicated, and there is no simple way to conclude that these faster-than-inflation increases mean schools are overspending. However, the largest factors affecting budgets suggest spending should shrink or grow more slowly than inflation, not outpace it, particularly in Suffolk County.

The most obvious explanation for spending increasing faster than inflation would be higher enrollment, but the region has seen lower public school enrollment. Nassau saw a 1.5 percent total population increase from 2012 to 2017, but school population fell about half a percentage point, from 201,579 K-12 students to 200,886. In Suffolk, the overall population fell by four-tenths of a percent from 2012 to 2017, and school enrollment declined by more than 5 percent, from 247,139 students to 234,524.

But in both counties, school spending would increase about 18 percent from the 2012-13 school year through the 2019-20 budgets that will be voted on Tuesday.

Pension costs, a factor that school officials and teachers unions frequently cite to argue that more funding is needed, have plummeted. After the stock market crashed in 2008, pension contribution costs doubled. At the height, in the 2014-15 school year, districts had to contribute an amount equal to 17.53 percent of their payroll for pensions. But the markets recovered and the payments dropped. For the 2019-20 school year, the contribution has declined to 8.86 percent of payroll, a huge savings for districts.

So where does the money go?

To educators, mostly. When the tax cap passed, and as the economy suffered, many districts touted “no raise” contracts that were never really “no raise,” thanks to automatic annual step raises for increased seniority. Now, though, more contracts include annual raises in addition to step increases, and total hikes of 4 or 5 percent are not unheard of.

As technology progresses, school enrollments decrease, pension costs plummet and state aid grows, Long Islanders ought to get a break on property taxes. Yet the vast majority of budgets include property tax increases, and unless the results of Tuesday’s vote is a surprise, nearly all will be approved by residents, who continue to cherish their local schools but increasingly cannot afford them. — The editorial board.