Makes certain technical corrections

Summary of specific provisions

Enacts a chapter amendment stipulating that notwithstanding any other provision of law to the contrary, a restoration in the 2010-11 education, labor and family assistance budget of the amount of state funding for public schools payable to school districts for the 2010-2011 school year, exclusive of those districts designated as high need or those districts identified as a "Big Five" school district, shall be used solely for the reduction of local proper- ty taxes. The funds shall not be used to add additional appropriations to proposed, enacted or adopted school budgets, nor shall the funds be deposited in school district reserve funds or retained in unreserved fund balances after levy of taxes.

Justification

New York State is struggling with an unprecedented budg- et deficit. As state lawmakers determine the budget cuts necessary in order to enact a balanced budget that best advances the interests of the state, there is a need to restore a portion of state aid for public schools previously cut in the 2010-11 Executive Budget.

With the state's public school districts having proposed, enacted or adopted budgets reflective of these proposed cuts in state aid, the burden of financing next year's school budgets will fall disproportion- ately on the state's already overburdened property taxpayers.

The Commission on Property Tax Relief issued its Preliminary Report and Recommendations on June 3, 2008. The Commission's report explores the root causes of the growth in property taxes and highlights several key facts:

* New York State's local taxes are the highest in the nation, and are 79% above the national average;

* Outside of New York City, school property taxes make up 62% of the property tax burden;

* Nine of the top ten counties in the country with the highest tax rates relative to home values are in upstate New York;

* Nassau, Suffolk, Rockland and Westchester counties are in the nation's top ten in terms of the percentage of household income that must be devoted to paying property taxes; and

* Property tax levies are currently rising at more than twice the rate of inflation and salary growth.

In light of the dire need to reduce the crushing burden of property taxes on local residents, which stands to be even more severe due to cuts in state aid to public school districts, this legislation will ensure that any restoration of state aid for public schools for the 2010-2011 school year will be used solely for the reduction of local property taxes.

Pursuant to real property tax law, school districts have adopted their budgets and are now in the process of preparing school tax rolls and determining the tax levy required to support 2010-11 school year budg- ets. Also under current law, in preparing warrants for the collection of school property taxes, school districts may hold in reserve a limited amount of funds that are not applied in determining the amount of the school tax levy. This legislation will ensure that restored state aid for public schools for the 2010-2011 school year will not be deposited in school district reserve funds or retained in unreserved fund balances. This legislation will also ensure that restored state aid will not be used to add additional appropriations to proposed, enacted or adopted school budgets.

Prior legislative history

None.

Fiscal implications

Fiscal implications at the state level will be determined upon restoration of state funds to be appropriated pursuant to enactment of the 2010-11 education, labor and family assistance budg- et. Adoption of this bill would assist in addressing the crushing burden of local property taxes.

Effective date

This act shall take effect immediately.