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Wednesday, May 23, 2012

Where Did the Money Go?

A reporter and photographer from the Albany Times Union visited the school today to prepare a story on one of the many peculiarities within the entangled financial web of state aid to public schools in New York. The same newspaper had already published an article a couple of weeks ago explaining how the much ballyhooed "2% tax cap" was first, not a tax cap but a tax levy cap, and second, the dramatic impact that a PILOT (Payment In Lieu Of Taxes) could have on the state's formula for districts to calculate their allowable tax levy cap for voting purposes. Our permissible tax levy cap turned out to be 13.946 due to the loss of funding ($348,080) in the local power authority's annual contribution in lieu of taxes. We eventually proposed a 12.47% increase that was subsequently approved by 58% of those casting votes on the budget.

Today's story involved the potential and future impact of a Green Island resident sharing in a mega millions lottery prize last year. Each year, when you file your state income tax you are required to identify the school district in which you live. this allows the state to determine the aggregate income wealth in the respective school districts. This total, combined with the sum of the assessed property value within the boundaries of the school district, produce a measure of the particular community's ability to generate revenue in support of the school. the higher the index, called the CWR (Combined Wealth Ratio) is then used in the formula to allocate funds from the state. The lower the district's CWR, the higher the rate of state aid distributed to the district.

The good fortune of the local winner (he received a prize of 28.9 million dollars before taxes) left our district vulnerable to a drop in future state aid since his winnings represented an increase in our aggregate income of nearly 70% - without elevating the socio-economic level of our district. That is, our collective income reflects a community unlike our actual socio-economic level. We still have the same poverty rate as before, the same percentage of children eligible for free/reduced lunch, the same of everything. All that's changed is the total amount of income and the average income - not the median income. Accordingly, the state would dispense far less aid to our school on the basis that in a strictly mathematical calculation we are far more affluent than before, whereas in a conceptual and practical analysis, we are exactly the same in terms of our needs.

I stated earlier that this is a potential and future problem we face. Since the state aid to education formula is frozen during the ongoing fiscal crisis the impact of this financial windfall will likely be delayed, if and when the freeze on the formula thaws. We are hoping in the mean time for appropriate intervention by the legislature (we contacted both of our local representatives and apprised them of the issue and asked for their help in mitigating this possible disaster) and/or the state department of education.

I'm sure many have asked themselves, before buying a lottery ticket, "What are the odds of me winning?" Similarly, we have asked, "What are the odds of the smallest town in the state (0.7 square miles) having a resident hit one of the biggest lottery prizes ever awarded in the state?"

I hope the article, expected to be included in the upcoming Sunday edition of the paper, will bring attention to an awkward and devastating problem facing our school district in the future.

Our greater hope is that the state lawmakers will eventually display the courage to ensure a more equitable distribution in state aid to education, as directed by the successful litigation brought on by the Campaign for Fiscal Equity. Such an action would require lawmakers to become more concerned with what is right instead of who is right. The children who would benefit by the equity are neither democrats nor republicans. They are all worthy of our investment in their future.

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