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Schools are rolling in new dough

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Now that big state tax hikes will funnel massive increases in state aid to schools, when do the big property tax decreases begin?

The current debate around school funding in New York centers on the idea that the state should pay more, and local property taxes should provide less. A funding system more heavily borne by the state would be more equitable because resources would go where they are most needed, not simply where the wealthiest taxpayers live. More state funding would take the burden off homeowners with lower incomes and those living in districts with little commercial property or wealth.

The best way to do that, advocates argue, is to raise state income taxes on the wealthy and corporations, and that's done. Next year's budget includes increasingly higher rates for families earning more than $2 million, $10 million and $50 million a year, and a corporate tax hike. They are expected to reap about $4 billion a year until they either are reauthorized or allowed to sunset — the corporate hike in three years and the income tax increase in six.

That funding should reduce local school taxes, but budget votes set for May instead include proposed increases on Long Island averaging 1.8%. Those hikes on homeowner's bills would come despite this year’s enormous increases in state aid. On Long Island, the jump in Foundation Aid, the biggest pot of state support, averages 13%. And that's just the first of three huge annual hikes that will increase state aid by $4 billion, essentially all the new revenue from the tax hikes. Now add in $9 billion the federal government granted the state’s schools in its most recent stimulus, and we're talking about unprecedented resources for public education.

Take two districts: Hempstead, with a $225 million annual budget, gets a state aid hike of $38 million and additional, cumulative increases for the following two years, plus $19 million from Washington to spend over two years — and is keeping taxes flat. William Floyd, with a $240 million budget, gets a $22 million increase this year, two more years of huge hikes, and $25 million from Washington — and is seeking a 2.91% tax increase.

The gigantic increases in state funding became unnecessary and ill-advised when the recent $1.9 trillion federal stimulus package was approved. But now those big checks are in the mail and the money must be used wisely and effectively.

School districts should cancel planned property tax increases this year, and look to lower them next year. They also must become more transparent. State Comptroller Thomas DiNapoli looked at a random selection of 13 state districts recently, and found that Rockville Centre and Island Trees had made errors posting information related to audits. And for now, limits on districts' reserve funds of 4% of annual budgets should be allowed to increase. If the state cannot maintain this generous aid, districts should be in position to stave off a fiscal cliff.

State taxes should not have been raised. Now the proceeds must be used to raise up our schools, and lower property taxes.

— The editorial board