By Haley Raphael

There are indications of it on the GNTA pins teachers wear. There are whispers of it in the hallway among students. It is ubiquitous, present in every Powerpoint presented, handout distributed, and assessment given. Yet, despite the role it plays in the lives of students, teachers, and administrators, the budget is, to many, more perplexing than the ingredients in the school’s chicken nuggets. Until now.
Few have made it through the past few years without hearing the term “Two-Percent Tax Cap.” But what is it really? Is it the angel saving the Great Neck residents from unreasonably high taxes? Or is it the madman making students bear the summer without air conditioning?
The Two-Percent Tax Cap is formally known as the New York State Property Tax Cap. Since its introduction in 2012, this policy has limited the total percent by which local governments are allowed to raise property taxes. Each year, the maximum amount that property taxes can be raised is determined using a formula that factors in either two percent or the rate of inflation, whichever is lower. Hence, this is why many refer to the policy as “the Two-Percent Tax Cap” even though the cap can be substantially higher or lower than two percent.
While this law was originally supposed to mitigate the effects of the recent recession, it has had unintended repercussions. According to social studies teacher Mr. Timothy Madden, this law encourages school districts to raise taxes to the tax cap of a particular year in order to be fiscally responsible, even if they do not need the extra revenue. He explained that if a district does not raise taxes to the maximum percentage that they are allowed, then they will, in effect, be punished the next year because each following year’s budget increase is based on the budget of the previous year. For this reason, many are criticizing our district for not raising taxes to the maximum this past year.
However, Assistant Superintendent of Business Mr. John Powell had his own reasons for raising property taxes by only 1.97 percent for this school year even though the cap was 2.39 percent. This decision was based on the tax cap’s de facto name—the “Two-Percent Tax Cap.” Because of the extensive use of this name, he did not want to raise taxes by more than two percent for fear of losing “the trust of the public”: The residents of the district have traditionally been very supportive. The budget for the 2015-2016 school year was approved by an overwhelming majority of over eighty percent of residents who voted—and he did not want to risk damaging the district’s “political credibility factor.”
Moreover, Mr. Powell noted that if taxes in Great Neck continue to increase at the same rate, “the affordability of Long Island would be out of reach for people looking to start a family here.” High taxes would also encourage residents whose kids have graduated from high school to move to areas with cheaper taxes. This would create a high supply and a low demand of houses in Great Neck which would lead to the overall devaluation of Great Neck.
Despite the the tax cap, Mr. Powell said that few changes are going to be felt directly by the students: students will probably only notice the integration of more technology in classrooms, like the use of ebooks.
However, more changes are planned to take place behind the scenes. Our district has started to self-insure for workers’ compensation rather than pay an outside company, which makes a profit off the process. Conversely, the district has found that for transportation, it would be cheaper to hire an outside company. By doing this, the district will eventually eliminate the added cost of maintaining bus driver and bus matron benefits.
Additionally, the district is planning to save money through new teacher contracts. The contracts, which were approved in early December, will increase the amount of time between raises for all new teachers hired. Mr. Powell said that Great Neck “teachers deserve more,” but “our district is just not in a position to pay more right now.”
Changes have been received negatively because of the $19 million that the district placed in a capital reserve fund last year. These funds, which some students suggest using to install air conditioning, are completely separate from the budget that pays for things like teachers’ salaries.
The $19 million was accumulated through accidental over-budgeting over the past few years; according to Mr. Powell, “the yearly budget increases have been slightly inflated, which has led to favorable balances in many of the budget lines.” Since 2013, these lines have included those for employee salaries, employee health insurance, and teacher retirement funds.
Nonetheless, budget cuts have been and will continue to be made in response to the Property Tax Freeze Program enacted by Governor Cuomo. Initiated during the summer of 2014, this program “freezes taxes for all homeowners with an income of less than $500,000 in school districts that stay within the property tax cap and develops a plan that will save their taxpayers 1% of their 2014-2015 real property tax levies from the 2016-2019 school years,” according to a powerpoint presented at a Board of Education meeting.
To get the refund for Great Neck home owners, our district had to save $1.9 million in the 2014-2015 school year. In order to do this, our district partnered with the Roslyn, Port Washington, Jericho, Syosset, East Williston, Herricks, Carle Place, Oyster Bay/East Norwich, Locust Valley, Glen Cove, North Shore, Garden City, and Manhasset school districts. In the 2014-2015 school year, these districts had a total combined savings that was one percent of their total budgets from the previous year. This allowed our district to reap the benefits of the Tax Freeze Program without actually reaching the $1.9 million in savings that we needed because some of the aforementioned districts saved more than they needed to.
The budget impacts your classes, your school, and your education. It impacts everything from the edition of the textbook you read to the time you spend in the library signing into the printers. Now that you (hopefully) have a better understanding of considerations that factored into the Proposed 2016-2017 school budget, stay tuned for the next article on this issue which will be in the print May 2016 edition of The Southerner. If you would like to learn more about the budget in the meantime, you can peruse the proposed budget on your own at here.