If President Barack Obama and Congress do not act to avoid the fiscal cliff, school districts throughout New York could lose $164 million in federal funding, or an average of $243,000 per district, according to an analysis by the New York State School Boards Association.
Districts in the Lower Hudson Valley, which were grouped with those in the Mid Hudson Valley for this analysis, would lose $14.1 million, or $139,000 per district, according to the group. Yonkers, one of the state’s so-called Big Five districts, could lose $1.6 million.
New York City schools would face the largest cut at $95.3 million, Western New York schools could lose $16 million – $175,000 per district – and Long Island schools could lose $13.3 million, or $110,000 per district.
The tax levy in Lower/Mid Hudson districts would need to increase by an average of 0.3 percent just to make up for the loss, NYSSBA said, and state aid to the region would have to rise an average of 1.3 percent.
Several school districts in Westchester, Rockland and Putnam, following the trend of many municipal budgets unveiled this fall, are expected to push for tax levy increases in 2013 that exceed the state’s 2 percent tax cap – moves that would require approval by a supermajority of voters. Consequences of the fiscal cliff would only exacerbate the district’s financial pressures.
“The consequences of lawmakers not reaching agreement on the fiscal cliff are severe for students in New York schools, especially those in city school districts,” said NYSSBA Executive Director Timothy G. Kremer. “The impact of the fiscal cliff is made far more pronounced by the state’s property tax levy cap, which essentially limits the amount of revenue schools can raise locally. For the sake of our students, President Obama and lawmakers in Washington, D.C. must prevent schools from becoming a casualty of the fiscal cliff.”
State Comptroller Thomas DiNapoli warned last week that New Yorkers could see more than $43 billion in tax hikes, including federal and payroll taxes, and the loss of more than $609 million in federal aid next year if a deal isn’t reached. (Read Tax Watch’s coverage here).
Without a deal a range of temporary tax cuts would expire at year’s end, increasing taxes for most Americans. Republicans want to keep tax cuts for all taxpayers, regardless of income, and they are seeking greater spending cuts. Obama and the Democrats want to continue tax cuts for everyone except those individuals earning more than $200,000 ($250,000 for married couples).
For NYSSBA’s full press release, click here.