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Letters 97 March 20, 1997 The Hon. George E. Pataki Dear Governor Pataki: We are writing you this letter to comment on your STAR funding proposal. As a coalition of 26 civic groups in New York City, we monitor the impact on students of budget and administrative decisions. Our objectives are to secure educational equity for all children, improve the quality of public school instruction, and drive available funds to the classroom. We want to thank you for putting these difficult, but critical issues on the agenda for debate and discussion in Albany -- how to increase the state’s share of public school operations and equity for New York City. We are concerned, however, that your proposals, as they stand now, would restructure state funding and contain the rising cost of general and special education in some areas of the state, but not provide for better education and services for children or equity in school resources and tax relief. Sixty-seven years ago the New York State Legislature agreed to an aid plan in which the state would share with localities the cost of providing education in inverse proportion to each district’s ability to raise local revenues. But, as you know, the continuing reductions in state education funds have created: • Continual pressure on local school districts to replace declining state dollars with local resources to fund their schools, so that local property taxes have escalated. • Sharp differences among school districts in the amount of resources invested in the education of public school students and in property tax rates, with residents in the lower-wealth districts shouldering a heavier tax burden in order to provide less than adequate instructional programs. The quandary in solving this problem always revolves around whether there are enough state resources to "level up" or enough political will to "level down" and risk hurting school districts that offer their students high quality instruction. EPP finds that your $3.4 billion STAR proposal neither levels up nor levels down. Instead, it is designed to contain education expenditures across the board, so that present sharp differences among school districts in the quality of education they can offer will remain. We also find that only 22% of STAR funds go to the classroom. Three-fourths of the new state resources are directed, not to improving the quality of instruction in districts where it is lacking, but to providing much higher levels of tax relief to property owners in the most affluent school districts, residents who are currently subject to lower tax rates than the residents in most other school districts. As explained in our enclosed analysis, at the end of the five-year STAR plan, residents of high-wealth school districts will have excellent schools and their homeowners will experience lower property tax burdens, while residents of low-wealth school districts will still struggle to provide even basic instructional services, will still have higher tax rates, will still fail to attract new homeowners and businesses. EPP members, in discussing the STAR proposal, have also commented that your tax relief measures ignore the school tax burdens of New York City and other big city residents by excluding renters (who also pay property taxes through their rents) and by not recognizing the full array of local taxes that go towards support of our schools. We pay a municipal sales tax and a municipal income tax along with our property taxes. By directing most tax relief measures to exemptions on full value of homes, you ignore how local revenues for public education are raised in fiscally dependent school districts. EPP is mindful that the proposal also contains an effort to raise the level of funding for the New York City school district by $680 million in five years and to use an additional $135 million for additional reforms of school aid for school districts in the rest of the state. The lack of details in the STAR proposal hampers our ability to understand in greater depth the full scope of your plans. But based on what is outlined in the Executive Budget, both the dollar amounts and your definition of "equity" fall short of solving the problem of very unequal educational resources throughout the state. Using tables 12 and 13 from the October 1996 Education Department’s Analysis of School Finances 1994-95, STAR’s $680 million comes down to a per-pupil allocation of $618. This would not even make up for that school year’s gap of $789 between state payments to New York City and the average state payments to school districts in the rest of the state. But sharp inequities also exist among these school districts. Table 10 of the same publication shows that there are 780,000 students being educated by school districts with lower than average operating expenses. The STAR plan’s allocation of $135 million for the rest of the state would only provide $173 in additional funds per pupil. Even if the additional resources for the rest of the state were concentrated in providing resources to 78,000 students in the poorest school districts, $1,730 per-pupil in additional state resources will simply not close the $6,000 per-pupil gap in resources between the lowest wealth districts and the highest wealth districts. Why in America and particularly in this state, should some children be educated in school districts that have half the resources of other school districts? EPP urges you to propose a solution that eliminates these inequities for children in all school districts. But school funding equity isn’t just an education issue. The fact that New York City is one of only two major cities in the nation where the public school per-pupil funding level is below the state average really calls into question whether the state has a genuine policy of encouraging economic development and discouraging dependence on welfare. A genuinely equitable school funding system would fulfill the promise made sixty-seven years ago to provide the funds to low-wealth school districts so that they could provide a quality education to their students and prepare them to participate in the civic and economic life of our society. This is why a state school funding system was developed. The concept of equity, that is, driving more state funds to lower-wealth and higher needs school districts is now being eroded. It is popular now to define the solution to the underfunding of New York City’s school district as providing state aid on the basis of the proportion of students that school district educates, 37%. But state operating aid isn’t on a flat per-pupil basis. EPP is concerned that a simple slogan, which unfortunately we help to popularized, has allowed you and legislative leaders to begin to substitute "equal" for "equitable." This popular distortion of what the state formulas are supposed to accomplish has even worse long-range implications for school districts of lower wealth than New York City. EPP urges you to consider increasing the state’s share of public education costs as the best way of ensuring a more equitable distribution of state funding to lower-wealth school districts and as the best way of promoting tax relief. We believe that there are mechanisms to ensure that a greater investment of state dollars will not result in an across-the-board escalation of expenditures by all school districts. Cost containment, absent strategies to improve the quality of education and to better target resources to children with greater needs, does not have positive results. New York City is a good case in point. Your budget analysts will confirm that both Mayors Dinkins and Mayor Giuliani, despite an annual growth of 20,000 additional students, have cut the school budget by $2.7 billion over eight years and contained costs. The results so far have been larger class sizes and lower student outcomes. What has been the benefit to the taxpayer? Improved quality of life? A better city? Families with children are even less likely now to send their children to public schools, a public service that their tax dollars purchase. Is this what you want for the rest of the state? The enclosed analysis document provides greater detail of EPP’s concerns about the STAR proposal. Again, we applaud your willingness to begin to grapple with school funding equity and tax relief issues. EPP stands ready to work with you and the legislature on crafting a proposal that would promote both tax relief and excellence in education. Sincerely, CC |
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