Decline in NY tax collection clouds Central Valley’s fiscal future

New York’s tax revenues are declining. That leaves Central Valley district officials wondering about future funding.

New York State Comptroller Thomas DiNapoli recently announced the state’s tax receipts are down $1.3 billion compared to the last year. That is unsettling news, because 83 percent of Central Valley’s funding comes from state aid.

“Just 17 percent of our school revenue comes from local taxpayers. Any change in state aid has a big impact on our budget,” said Superintendent Rich Hughes.

“State officials are hinting that schools may take a hit in the 2017-18 state budget. We don’t expect that school aid will decline, but we don’t expect any sizable increases either. Without an increase, Central Valley may face tough decisions.”

Dr. Hughes said a reasonable 2-percent increase in state aid translates into approximately $700,000. Raising that money locally is not possible—it would require an unacceptable 8.4 percent tax increase.

“We understand that New York tax revenues are down. Lower oil prices and declining corporate profits mean there is less to tax. Understanding the why, however, is less important than trying to figure out what this will do to our local schools,” he said.

Like many New York schools, Central Valley has been underfunded. In 2007, Gov. Pataki and the legislature approved the State Education Budget and Reform Act of 2007. The act established a formula that would steadily increase school aid to districts that needed it the most. Less than two years later, the state went back on its promise to schools. Not only did New York ignore promised increases, it “took back” previous increases.

“If Central Valley had received what was promised in 2007, we would have received an additional $35,931,209. Almost $36 million to spend on our Thunder,” Dr. Hughes said.

Central Valley has been insulated from the worst funding swings thanks to merger incentive aid. Dr. Hughes warned, however, that merger aid begins steadily disappearing in July 2019.

“We need a predictable, equitable funding formula so schools can plan long-term. We can’t make long-term plans because we don’t know what we will have. As long as school funding takes place at the whim of ‘three men in a room,’ our students’ futures will be at risk,” he said.

“Three men in a room” refers to the Senate and Assembly majority leaders and the governor crafting a budget behind closed doors with limited input from other elected representatives. The practice is secretive and arbitrary, he said.