Teachers’ Union Plans Lawsuit to Stop Tax Cap

The head of a state teachers' union said in a radio interview that the state-imposed property tax levy cap will be challenged in court.

“Educationally it’s a resounding failure, and it needs to be addressed," said Richard Iannuzzi, president of NYSUT, appearing on The Capitol Bureau show on radio station WCNY. "It needs to be addressed and it will be addressed in the courts by NYSUT at some point, probably not that far off.”

Iannuzzi said that a challenge is being worked on now but has not been filed.

“We are preparing a case and when we’re satisfied that we’ve addressed all the issues that we want to address, we will go to court.”

Responding, host Susan Arbetter asked whether the lawsuit would come before Jan. 1, 2013.

Iannuzzi replied, “[I] don’t know, but I would say that’s fairly close to where we would probably wind up.”

The issues that NYSUT would argue against involve whether the cap is democratic; Iannuzzi noted the 60-percent supermajority needed by public vote to override it. Another issue would involve whether the cap contributes to funding inequity between school districts, he said in the interview.

The cap limits the tax levy, which represents the amount of revenue that a school district, municipality, county or other special district, can raise for a given budget cycle year over year. The limit is the lesser of 2 percent or the rate of inflation, although there are exemptions for things such as some pensions costs and changes to the property tax base.

The cap, however, does not limit the tax rate, with is the amount of money paid by taxpayers per $1,000 of assessed value. The rates can fluctuate depending on changes to the assessed property value of the tax base, or in the case of multi-town entites such as school districts, because of the equalization rate formula used to apportion the costs among constituent municipalities.

The cap has caused frustration among school district and municipal officials locally, who feel that is presents a financial burden while they are not getting relief from expensive state mandates, such as pension contributions and required busing for private school students. While school districts need a supermajority of voters in a referendum, other forms of local government only need a 60-percent threshold from their elected boards to override the cap.

The cap was signed into law by Gov. Andrew Cuomo, a New Castle resident and Democrat, in June 2011, shortly after it passed the state legislature.

School districts and local governments are currently in their first fiscal years under the cap. Ninety-two percent of school district proposed budgets for 2012-13 that were at or under the cap, according to the New York State School Boards Association.