School leaders say aid cuts unfair to upstate

Staff reports
A comparison of the proposed budget cut impacts between Penn Yan and Rye Neck School Districts

The Penn Yan Central School District,  along with other upstate rural school districts will be hurt more by state aid cuts than the more wealthy downstate school districts, says Doug Tomandl, assistant superintendent for business at Penn Yan.

To illustrate his point, Tomandl compares the Penn Yan district to the Rye Neck School District. Rye Neck is located northeast of Yonkers.

As he looked at the total budgets for the two school districts, Tomandl notes that while nearly 50 percent of the Penn Yan $31.6 million budget for 2010-’11 is paid through local property taxes, nearly 90 percent of the Rye Neck $35 million budget is paid for through the property tax levy.

That means the Penn Yan district receives a greater percentage of its budget through state aid, so when the aid is cut, it hits the Penn Yan district, and similar  districts harder.

Tomandl says based on projected state aid reductions, the true value tax rate in Penn Yan will go from $9.97 to $11.18, while the true value tax rate in Rye Neck will go from $13.93 to $14.03. Applied to a property valued at $100,000, a taxpayer in the Penn Yan district would see a tax increase of $121 while theRye Neck property owner would see an increase of just $10.

“It’s just not fair,” Tomandl told the Penn Yan School Board on Feb. 16.

He’s not the only administrator who thinks Gov. Andrew Cuomo’s plan isn’t fair.

Rick Timbs, executive director of the Statewide School Finance Consortium, recently wrote: “Upstate districts are way below average in income and property wealth, taxing capacity, course offerings and educational opportunities. They also have the highest rates of poverty, largest distances to transport students, and diminished local resources due to major losses of business, industry and population.”

Timbs says Cuomo’s claim that school districts have $1.5 billion in reserves and unspent federal funds that will allow them to absorb the state cuts fall short.

“Over 150 school districts have reserves insufficient to cover their state aid cuts. Some have virtually no reserves at all. Prudent financial management requires districts to maintain sufficient reserves for emergencies. Even those districts that do have reserves exceeding this year’s state aid cut would be ill advised to use all their reserves this year. Costs beyond the district’s control, such as for pensions, fuel and health insurance, will continue to escalate,” writes Timbs.

In Penn Yan, Tomandl is recommending that $470,500 from the school district’s employee retirement system reserve fund be applied to the budget gap. In addition, the district has reserved $541,349 in federal jobs bill funds from last year that can be used as revenue.

But using those reserves will help for one year, and as Timbs notes, “With a tax cap in place next year, districts will face another round of deep cuts that reserves could help mitigate.”

According to information found on the consortium’s website, a 2 percent tax cap would limit the maximum spending increase per Penn Yan student to $184. Meanwhile, the same tax cap would allow an increase of up to $419 per pupil in Rye Neck.

To see a spreadsheet comparing the state budget impact and the potential impact of a tax cap on school districts from around the state, visit www.statewideonline.org/