State Funds All School Costs

Section 1. Title V of the education law is amended by adding a new article 71 to read as follows:

ARTICLE 71

FINANCING OF SCHOOL DISTRICTS Section 3501. Legislative intent.

3502. Basic quality education.

3503. Minimum apportionment.

3504. Collection and distribution.

3505. Construction with other laws.

3506. Severability.

§ 3501. Legislative intent. It is the intent of the legislature to fulfill its obligations under article eleven of the state constitution with respect to the financing of public schools within this state and, at the same time, eliminate the inequitable and regressive real estate tax as the support of such schools. The legislature hereby further intends to guarantee the quality and equality of education for all our children, while leaving with the individual school districts the present level of local control including the authority to permit or prohibit the transfer of students into or out of such districts in accordance with the provisions of this chapter.

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD01311-01-7

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§ 3502. Basic quality education. 1. The state shall assume all costs of basic quality education, in accordance with section thirty-five hundred four of this article, including all general and special educational services which the commissioner, under guidelines established by the legislature, shall define as necessary. Basic quality education, as defined by the commissioner, shall allow sufficient latitude so that choices may be made by local school districts with respect to their individual needs. As used in this article "basic" shall mean equal services to all pupils regardless of differences in cost in different districts for such services.

2. Such costs shall be funded as provided for by the legislature, in conjunction with the elimination of real estate taxes for the support of education. Within the cities of New York, Buffalo, Rochester, Syracuse and Yonkers, the tax on real property shall be reduced by the dollar amount of such city's share of the cost of public school education. Such reduction shall be apportioned to all real property taxpayers on a prorata basis, and tenants shall receive tax credits, tax rebates, or reductions in rent as provided in section four hundred sixty-seven-k of the real property tax law.

3. Each school district shall submit a basic budget to the department for purposes of determining reimbursable services.

4. The department, under direction of the board of regents, shall establish a schedule of mandatory basic services and authorized costs therefor related to differing costs throughout the state. Such basic schedule shall reflect guidelines established for this purpose by the legislature.

§ 3503. Minimum apportionment. In any school year a district may elect to receive as its basic budget the highest of:

1. The district budget of the school year during which this article shall take effect, except that this apportionment option shall exist only for the period not exceeding the five school years immediately after this article shall take effect.

2. The product of (a) the district budget of the school year during which this article shall take effect divided by the enrollment at the start of such year and (b) the enrollment at the start of the school year for which the budget is being determined. This apportionment option shall exist only for the period not exceeding the five school years immediately after the effective date of this article.

3. The basic budget submitted in accordance with subdivision three of section thirty-five hundred two of this article, except that in no case shall the per pupil apportionment exceed the per pupil apportionment of the previous year by more than the average statewide increase of per pupil budgets plus ten per centum of the per pupil apportionment of the previous year.

§ 3504. Collection and distribution. Notwithstanding the provisions of any other law, code, rule or regulation, the state shall, within five years from the effective date of this article, collect and distribute to school districts all moneys relating to the financing of public education, exclusive of higher education, within this state, as provided by the legislature. This assumption by the state of all costs of basic quality education shall be accomplished in approximately equal increments over a five year period from the effective date of this article. During this period, the amount of money derived by each school district from real property taxes shall be reduced accordingly. After five years from the effective date of this article, moneys distributed to any school district shall be reduced by the amount of any revenues received

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by such school district from taxes imposed on real property by or on behalf of such school district.

§ 3505. Construction with other laws. The provisions of this article shall be controlling, notwithstanding the provisions of any other law, code, rule or regulation to the contrary. However, no existing right or remedy of any character shall be lost, impaired or affected by reason of this article, nor shall the validity of any action taken by any public official under the law in force immediately prior to the time this article shall take effect be affected by the enactment of this article. Collection of all outstanding tax liens shall be pursuant to the provisions of the real property tax law.

§ 3506. Severability. If any clause, sentence, paragraph, section or part of this article shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, section or part thereof directly involved in the controversy in which such judgment shall have been rendered.

§ 2. Article 13 of the real property tax law is REPEALED.

§ 3. The real property tax law is amended by adding a new section 467-k to read as follows:

§ 467-k. Provisions for tenants. In every case where taxes on real property are reduced due to the reduction of school taxes on such property, the amount of such reduction shall be pro-rated among the tenants, if any, of such real property, and the total rents reduced in an amount equal to such real property tax reduction. Where such rent reduction is precluded by a lease or other agreement, such real property tax reduction shall entitle such tenants to a tax credit in that amount against income taxes due, or to a rebate for any amount in excess of income taxes due, until the expiration of such lease or agreement, at which time the rent shall be reduced accordingly.

§ 4. Subdivision 1 and paragraphs (b) and (c) of subdivision 3 of section 972 of the real property tax law, as amended by section 12 of part B of chapter 389 of the laws of 1997, are amended to read as follows:

1. Adoption. Notwithstanding any provisions of this chapter, or any other general, special or local law to the contrary, the legislative body of a county may, by local law, provide that thereafter and until such local law is repealed, the county shall become the tax collection agency for the purpose of collecting taxes in installments as prescribed by this title [and by sections thirteen hundred thirty-six through thirteen hundred forty-two of this chapter]. The term "taxes" as used in this title shall include special assessments which are levied by the county legislative body at the time and in the manner provided by law for the levy of county and town taxes.

(b) If an installment is not paid on or before the date it is due, additional interest shall be added as provided by section nine hundred seventy-five [or section thirteen hundred forty] of this [chapter] title.

(c) The amount of any interest which shall be added to any installment pursuant to this section and section nine hundred seventy-five [or section thirteen hundred forty] of this [chapter] title shall belong to the county.

§ 5. Subdivision 6 of section 975 of the real property tax law, as added by chapter 953 of the laws of 1962, is amended to read as follows:

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6. The county treasurer of a county which has enacted a local law pursuant to section nine hundred seventy-two of this [chapter] title may promulgate and amend suitable rules and regulations prescribing the necessary forms for carrying into effect the provisions of this title [and of article thirteen of this chapter] relating to the installment payment of taxes.

§ 6. Subdivision 5 of section 1618 of the real property tax law, as added by chapter 512 of the laws of 1993 and as further amended by subdivision (b) of section 1 of part W of chapter 56 of the laws of 2010, is amended to read as follows:

5. When the commissioner has established a final equalization rate for a consolidated assessing unit as a whole, school district and county taxes within the consolidated assessing unit shall be apportioned without the use of equalization rates, notwithstanding the provisions of [articles] article eight [and thirteen] of this chapter.

§ 7. The tax law is amended by adding a new section 601-b to read as follows:

§ 601-b. Additional taxes for education. (a) In addition to the taxes on income imposed by this chapter for taxable years or periods ending on or after December thirty-first, two thousand seventeen, there shall be imposed a tax equal to a percent of the taxes imposed by such sections and articles as is necessary to fulfill the requirements of section thirty-five hundred two of the education law. Such a tax may be levied either as a surtax, or by readjustment of the appropriate tax schedules.

(b) Each school district may also increase the additional taxes for education, imposed pursuant to subsection (a) of this section, by resolution adopted by a two-thirds vote prior to the levy of taxes in any year. Such resolution shall provide for the increase to be imposed either in the form of a higher surtax rate or a standard lump sum amount; provided, that all such proceeds from the increase on the additional tax for education be collected and accrued to the school district in which such tax was collected.

(c) The commissioner shall establish a separate account or accounts to receive the additional tax imposed by subsections (a) and (b) of this section and shall pay into such account or accounts the total of all such taxes when received and retain the same subject to disbursement in accordance with the provisions of the education law.

§ 7-a. The real property tax law is amended by adding a new section 307-b to read as follows:

§ 307-b. Additional tax on non-residential property. 1. The commissioner of taxation and finance shall establish an additional tax on non-residential property to be imposed in addition to other locally levied property taxes. Such tax shall be levied by the state through the county, city, town or village governing body and shall be a low-rate, uniform tax. For the purposes of this subdivision, "non-residential property" shall mean any (a) non-residential commercial property, (b) industrial property, (c) agricultural property and (d) vacant land which is either commercial property or industrial property.

2. The commissioner of taxation and finance shall set the rate for the additional tax on non-residential property, as required by subdivision one of this section, at an adequate rate to provide funding for meeting the requirements of sections thirty-five hundred one and thirty-five hundred two of the education law. The commissioner of taxation and finance shall establish a separate account to receive the additional tax imposed by subdivision one of this section and shall pay into such account the total of all such taxes when received and retain the same

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subject to disbursement in accordance with the provisions of article seventy-one of the education law.

§ 8. Sections 1204, 1211 and 1212 of the tax law are REPEALED.

§ 9. The tax law is amended by adding a new section 1200 to read as follows:

§ 1200. Certain taxes reduced. Notwithstanding the provisions of any other section of this article, on and after the effective date of this section, the provisions of this article relating to taxes for the benefit of school districts or school purposes shall be deemed reduced in accordance with section thirty-five hundred four of the education law.

§ 10. Section 1213 of the tax law, as amended by section 2 of part WW of chapter 57 of the laws of 2010, is amended to read as follows: