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RSA Concerns with Local Property Tax Levy Cap

RSA Concerns with Local Property Tax Levy Cap. Existing Inequitable Allocations become “Locked in Place,” Based upon Wealth Difference Existing Spending Gaps Widen to Become Chasms. Concern #1: Locking into Place Existing Inequity. Eom , Duncombe and Yinger —March 2011

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RSA Concerns with Local Property Tax Levy Cap

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  1. RSA Concerns with Local Property Tax Levy Cap Existing Inequitable Allocations become “Locked in Place,” Based upon Wealth Difference Existing Spending Gaps Widen to Become Chasms.

  2. Concern #1:Locking into Place Existing Inequity Eom, Duncombe and Yinger—March 2011 “Property tax limitations have potentially serious equity implications because they tend to freeze in place existing disparities in spending across school districts.”

  3. Concern #2:Existing Gaps Become Chasms The NY State Rural Schools Association is concerned not only that existing inequalities are frozen into place by a Local Levy Cap—but that over time those expenditure differences widen. The only means to assure existing gaps do not become chasms is for all new state aid to be distributed via highly wealth equalizing formulas. We doubt the political will exists to assure future aid increases address the needs of Low Wealth School Districts.

  4. How Gaps Become Chasms:A Decade Under the Local Levy Cap • The next several slides illustrate how the Local Levy Cap has a differential impact on Low Wealth School Districts versus High Wealth. • The assumptions built into the charts that follow include: • Both districts pass 2% levy increases each of the next ten years, and • Student enrollments remain constant for each district over the next decade.

  5. An Illustration: How Gaps Become Chasms:Bedford vs. Indian River • The chart that follows illustrates that Indian River generates between $14-$17 per pupil annually when imposing a 2% levy increase. • Bedford generates $478-$571 per pupil annually while enacting the same 2% levy. • If not offset by larger state aid increases for Indian River the per pupil expenditure gap between these two districts grows from $10, 131 initially to $15,206 over ten years.

  6. An Illustration: How Gaps Become Chasms:Bedford vs. Indian River

  7. How Gaps Become Chasms:A Decade Under the Local Levy Cap

  8. An Illustration: How Gaps Become Chasms:Bedford vs. Indian River • The next chart illustrates that in Year 1 over $2M of additional state aidwould be required to maintain the initial per pupil spending difference at $10,131. • By the end of the decade an additional $22M per year in state aid would be required to maintain a $10,131 per pupil difference. • NY State’s cost over a decade to maintain a $10,131 per pupil expenditure gap exceeds $119M!

  9. Additional State Aid Needed toMaintain a $10,131 Per Pupil Gap

  10. Conclusion: • The Local Levy Cap legislation exacerbates New York State’s School Funding Inequity. • The longer we operate under the existing cap the wider gaps between wealthy and poor school districts become—and the more expensive necessary solutions become for the taxpayers of the state. • We need new formulas that provide equitable funding ASAP!

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