Provides that actual valuation, for state school aid purposes, shall be based on the calendar in which the base year commenced

BILL NUMBER:S4313A

Title of bill

An act to amend the education law, in relation to actual valuation for state education aid purposes

Purpose

Provides that actual valuation, for state school aid purposes, shall be based on the calendar in which the base year commenced.

Summary of specific provisions

Section one amends paragraph c of subdivision 1 of section 3602 of the Education law to require that the valuation of taxable real property in a school district obtained by taking the assessed valuation of taxable real property within such district. as it appears upon the assessment roll of the town, city, village, or county in which such property is located, for the calendar year immediately preceding the calendar year in which the base year commenced be used.

Section 2 states the enactment date.

Justification

Technology has progressed significantly in the past twenty years. With these advances has come the ability to compile and use data almost in real time.

Unfortunately, the current school aid formula is inconsistent in that it relies upon stale data. Local tax levy changes from year to year are based on the changes in local property values. Yet, the state aid formula to determine state school aid, including the GEA, the foundation aid formula, and cost-driven aids, use property value data that is over three years old in calculating aid that is then used by schools four to five years later.

For example, the enacted state school aid formula for the 2012-13 school year uses a GEA based on the year 2000 federal census, and projected operating and foundation aid formulas for schools are based on 2009 calendar year property value data. Therefore, schools are being funded based on their school need and demographics as measured in 2000 and 2009 which, by January 2013, is a gap of 13 years and 5 years, respectively.

This significant lag in data causes a disconnect between state school aid, which uses outdated property values and the funding schools are authorized to raise from a local share of aid. This makes it difficult for schools to accurately determine both their funding needs and the amount of aid they can expect to receive, especially in the face of a fluctuating and weak economy.

In this age where real-time data sharing is simple to do through internet and other electronic means, the formula to determine state school aid funding should use data from the same base year as the year school districts use to determine the local share of funding.

By implementing this legislation, schools will receive state school aid consistent with the most current property data available. It will enable schools to meet their fiscal obligations and needs based on

school aid driven by data from the most recent preceding year instead of from three or more years prior.

Prior legislative history

This is a new bill.

Fiscal implications

Undetermined.

Effective date

This act shall take effect on the first of July next following enactment.