State Sen. John Brooks recently sponsored a bill that could begin redefining how schools are funded, reducing the burden on local homeowners.
Senate Bill S.1687, which was passed by the Senate during the final days of the legislative session, calls for a task force to analyze the current funding system for primary and secondary education. The goal, the Seaford Democrat said, is to publish a study and propose a new system in which schools are funded through state income taxes, rather than the current practice of using property taxes. Brooks, whose district stretches from Freeport to western Suffolk County, represents most of Seaford and Wantagh as well as parts of Bellmore, Merrick and Freeport.
The current system is “unfair,” Brooks said. “The challenges facing education are dramatically changing,” he said on June 24. “The way we fund education is presenting significant problems. We have an overdependence on residential property taxes.”
Every year in their proposed budgets, school districts announce their tax levies — the amount of property taxes that need to be collected to meet a district’s expenses. In school systems with low commercial tax bases, Brooks said, residential property taxes can account for as much as 80 percent of the budget. In both the Wantagh and Seaford school districts, for example, property taxes amount to more than 70 percent of the budget.
As an illustration of the problem, Brooks offered two hypothetical homeowners, each with residential property with an assessed value of $500,000. In the case of Homeowner A, the property is inherited or the mortgage paid off. But Homeowner B is a first-time buyer who financed all but 3 percent of the home’s assessed value and has a mortgage for the rest. Current models neither account for such disparities in homeowners’ equity nor take into account differences in income, making property taxes regressive, Brooks explained. Income taxes take at least some of these disparities into account.
Geographically, the quality of education is also affected. Malls, offices and other businesses within school districts relieve residential taxpayers’ burden. The commercial property taxes that are funneled into those districts are a major contributor to school funding, Brooks said. “A district with little to no commercial property taxes,” he added, “is going to have a significant tax liability in [residential] property taxes.”
Seniors are disadvantaged as well, he said. In many cases, they purchased their homes when both prices and taxes were lower. For those on fixed incomes, their ability to pay has not kept pace with the assessed value of their assets. “We’re saying that the value of their house is a pure indication of their financial position,” Brooks said, “when it’s not.”
Brooks’s concerns grew out of an independent, comprehensive examination of how every school district in the state is funded and the educational disparities among them.
“What we need to do is take a step back, re-examine the role of education and figure out how we can change this,” he said, “so that every student, regardless of where they live, has an opportunity for a quality education.”
Funding from the state, he said, should meet school requirements. If districts wanted to spend more, they would still have the option to do so under a new system. Just like propositions in the current budgets, districts could ask taxpayers to vote on and approve extended measures and programs that would be funded by property taxes.
Jeff Gold, a Bellmore tax lawyer who is a public advocate for Nassau County’s current property reassessment initiative, said that Brooks’s idea raises concerns. While he would like to wait and see what the task force’s final study proposes, Gold said, it “may hurt as many people as it helps.” Higher-income residents may have to pay a larger share if a new income-based tax rate does not have a cap.
Local school officials were similarly lukewarm when asked about proposed alternatives earlier this year. Wantagh Superintendent John McNamara said he was concerned that more state funding could translate to greater state involvement in how the funds would be spent.
The task force, which would include school officials and educators, would have three years to complete its study. At that point — which could be sooner than the deadline, Brooks said — a report would be published offering the best recommendations, according to the bill. There would also be a dedicated website on which the findings would be posted, and on which the public could comment.