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A "Ladder" To Sky-High Schools Taxes


A "Ladder" To Sky-High Schools Taxes

December 26, 2000
Urban PolicyOther

The New York State Board of Regents this month celebrated the season of giving by calling on Gov. Pataki and the Legislature to giftwrap another $1.45 billion in state aid to public schools next year -- an 11 percent hike on top of this year's record $1.16 billion increase, which brought total school aid to $13.6 billion.

For once, the inflated bottom line on the board's holiday wish list was at least technically grounded in reality:

Left unchanged, the statutory aid-to-education formula would automatically generate $1.45 billion in new cash in 2001-02.

But that's easily four times more than Pataki can realistically propose in his upcoming executive budget - not that the Regents ever concern themselves with such details.

So, once again, the state's supreme education policymaking body is fueling unrealistic expectations while ignoring the real problem in the state's school-aid formula -- a problem that, if left uncorrected, will dramatically increase the burden on already overtaxed New Yorkers.

That problem is LADDER, or "Learning-Achieving-Developing-by-Directing Education Resources" -- Assembly Speaker Sheldon Silver's pet education program.

LADDER includes funding for classroom computers and building renovation projects, but its costliest rungs consist of targeted "categorical" funding for universal pre-kindergarten and reduced class sizes -- both of which, not coincidentally, are big favorites of the state's powerful teachers unions.

Moreover, LADDER gets taxpayers coming and going, because it's a "spend-to-get" program: It drives up local school spending by requiring participating districts to commit their own matching funds for new pre-K programs and class-size reductions. Since this also requires more classroom space, LADDER adds to demand for state building aid.

And as LADDER grows, it crowds out the kind of unrestricted state aid that districts could - and should - be using to reduce their reliance on local taxes. Under LADDER, local priorities take a back seat to what is essentially a statewide job-development program for the teachers union.

LADDER robs school districts of financial and administrative flexibility when they need it most -- and promotes further growth in sky-high school property taxes.

The rise of LADDER is a key reason why New York's school aid increases have been even bigger than usual in recent years.

New York's voters rejected an expensive piece of LADDER when they defeated the $2.4 billion School Health and Safety Bond Act in 1997. But the program is still geared to cost well more than $1 billion a year in new school spending when fully implemented next year - at least 10 percent more than the total school aid budget in the year LADDER was adopted, 1997.

Under current law, LADDER alone is scheduled to grow by roughly $500 million in the 2001-02 school year, according to the state Council of School Superintendents.

Yet the program is left intact in the aid proposal of the Regents, whose appointments are controlled by the Assembly. Now more than ever, the school-aid formula is on a collision course with fiscal reality. New York State spending in 2000-01 is rising by 7 percent, more than three times the rate of inflation, and school aid accounted for fully one-quarter of the increase.

But as the stock market stagnates and the nation's economy cools, the record revenue hikes that fueled this expansion are coming to an end. Pataki's hopes for controlling the state budget in 2001-02 - and for keeping the state's tax-cut promises in the future - will hinge to a great extent on his ability to curb total growth in school aid.

He'll need to argue -- convincingly -- that a relatively small aid hike, with fewer strings attached, is better than another budget-busting climb up the Assembly's LADDER.

Unfortunately, the Regents' fanciful 2001-02 aid request has got the state budget process off on precisely the wrong foot.

It looks like another long winter in Albany.