Senate Votes To Change The Way Education Is Funded

John J. Bonacic

June 22, 2006

The State Senate today passed a bill (S.8360) to permanently change the way schools are financed. The legislation is the first substantive real property tax reform legislation passed in more than a decade. The legislation would allow voters in each school district to vote to phase out the property tax on homeowners, for the operating costs of local school districts. The phase out would take place at a rate of 20% a year, for the next five years.

The legislation was developed jointly by State Senators John Bonacic and Stephen Saland, who respectively Chair the Senate Committees on Housing and Education. "Voters should not have to choose between the cost of home ownership and a quality education for their children. It is an untenable choice and one which Senate Republicans have chosen to end," Bonacic said.

Statewide, nearly 90% of school budgets passed last month. At the same time, more than 60% were defeated in Ulster and Dutchess Counties. Various taxpayer groups across the region are calling for school property tax reform. Bonacic has led the effort in the Senate for years to change our school tax system. In the past three years he has held a series of public hearings on property tax reform. This legislation was developed after studying the results of those hearings.

The last significant real property tax proposal to pass either the Senate or the Assembly, passed the Senate in 1994. Despite strong bipartisan support for that legislation, the bill was never considered by the Assembly.

Under the bill which passed the Senate today, voters in each school district could opt into a system where State financing would replace property taxes which are now levied on people’s home and which currently fund the local share of school operating costs. In those Districts whose voters opt in, the property tax levy would phase out for that local share over the next five years.

Bonacic said, "Starting next September, if the Assembly doesn’t procrastinate and make excuses, school property tax bills will do something they haven’t done since the first year of STAR - they will go down. The message to Assembly Democrats is simple: no more excuses - pass this bill or pass your own bill we can take to conference committee. The burden of ending the property tax nightmare is now squarely on the shoulders of the Democrats who control the State Assembly."

"The STAR program, once beneficial, has not worked the way it was intended. The tax credit enacted this year, while modestly helpful, is not a solution. We do not need more tinkering with STAR. We do not need a band-aid approach; we need fundamental change. The Senate has voted for fundamental change," Bonacic said.