"This is a major issue facing a number of school districts in the North Country and around the state. I have introduced legislation that will give a significant and much-needed financial boost to struggling schools that have an outsized proportion of tax-exempt properties located within their district boundaries," Assemblywoman Russell said.
"Because of the role property taxes play in funding school budgets, communities that have a high number of tax-exempt properties often end up asking a small percentage of the population to shoulder a large financial burden. This legislation is necessary to more equitably provide and fund a basic education for New York’s children," she added.
The bill would call for additional state aid payments on a sliding scale basis for school districts with 40 percent or more of tax-exempt property.
The maximum payment would range from $500,000 for a district containing 40 to 44 percent of tax exempt property to $2.5 million for districts with 65 percent or more tax exempt property. The reimbursement would be based, in part, on school size and the district's economic status, with the poorest districts in the state eligible for the highest payments.
Ogdensburg School Superintendent Tim M. Vernsey said he feels the state should take the amount of tax-exempt property in a district into consideration in its state aid allocations.
"The city of Ogdensburg and the Ogdensburg City School District have some of the highest tax exempt property percentages in New York State. At last glance it is upwards of 70 percent or over $400 million," Mr. Vernsey said.
"Much of the tax-exempt property is state owned and ends up forcing a much larger burden on the local taxpayers and businesses. The Ogdensburg City School District has the highest tax rate per thousand ($26.49 per $1,000 is projected for the 2016-17 budget) of any district in the region. The reason for this is that roughly only 30 percent of the property in the district is taxed, again forcing a major burden on the local taxpayers who are left to make up the difference," he noted.
"I believe this is a bill that makes sense as school districts who are in this situation have no choice but to have significantly higher tax rates than schools that do not have significant tax- exempt properties within their borders," according to Mr. Vernsey.
Massena Central School Superintendent Patrick H. Brady, who previously served as the school superintendent at Potsdam Central, said the amount of tax-exempt properties in both communities is a concern.
"We appreciate the strong consideration given by Assemblywoman Russell to school districts with a high amount of tax-exempt property," he said.
"Having been the superintendent in two such communities, I know the challenges of developing a budget balancing the needs of our students with the fiscal capacity of local taxpayers." Mr. Brady noted.
"Schools are limited in their revenue raising ability as funding is largely derived from state aid and the local property owners. When there is a high rate of exemption in the local tax base, the burden is inequitably born by those who do not qualify for such exclusions," he pointed out
The property value for the Massena Central School District on the 2015-16 tax roll was $1.9 billion, but $1.2 billion - 61.6 percent - is tax exempt.
"If the full value of property were taxable, it would add $22 million to the district while at the same time more equitably distributing the responsibility. It would also significantly lower the tax rate for all," Mr. Brady said.
"The same would be true for school districts such as Potsdam that have similar tax exemption issues. Real property tax laws are difficult to change in regards to institutions of higher learning, public authorities, places of worship and other exempt entities since they have enjoyed historic deference," he said.
But he said the legislation introduced by Assemblywoman Russell tackles the problem from a different angle by providing additional financial support to schools that have experienced these inequities.
"It will help to provide a fairer playing field for schools who do not have the same revenue raising capacities as those whose tax levy is more evenly distributed. I applaud and support this effort," Mr. Brady said.