By HOWARD S. WEITZMAN
NASSAU COUNTY residents send their children to schools widely considered to be among the best in the nation. They also pay among the highest local taxes in the nation — mostly school taxes. It follows, therefore, that Nassau residents simply choose to pay more in order to have superior schools. Right?
Not necessarily. Nassau County residents pay a bigger share of their incomes in school taxes than those who live in comparable suburban counties, like Suffolk and Westchester, despite similar income levels and education spending. Nassau also receives far less aid than New York City or, on average, the other counties in the state. In fact, based on a study my office has conducted, it’s clear that the state is shortchanging Nassau County on aid for education, and this needs to stop.
Adding urgency to this struggle over how to apportion state aid to education, the New York State Supreme Court last week issued a ruling in the case brought by the Campaign for Fiscal Equity. The decision, unless it is overturned on appeal, will compel the state to provide an additional $5.6 billion in annual aid to New York City schools. This has implications beyond the city and argues strongly for the need to redesign the formulas used to determine state aid.
In our study, we determined that the average local tax burden per household, including property taxes and local income taxes, is $6,056 in Nassau, $4,182 in Westchester, $3,818 in Suffolk, and $2,984 in New York City. In other words, the people of Nassau County pay nearly 50 percent more than those in Westchester, 60 percent more than their neighbors in Suffolk and more than double what the residents of New York City pay.
Surely this is because Nassau’s incomes are higher, right? Well, no. The average household income in Westchester ($122,833) is higher than in Nassau ($110,429). The result is that in Nassau, local taxes — two-thirds of which go to schools — constitute 5.48 percent of income. In Westchester and every other county we studied, the percentage is lower: 3.4 percent in Westchester, 4.21 percent in Suffolk and 4.1 percent in New York City.
Not coincidentally, Nassau’s level of school aid from the state, 16.6 percent, is the lowest in the New York metropolitan area. Compare that to 19.3 percent in Westchester, 29.8 percent in Suffolk, 43.3 percent for New York City or the statewide average of 37.4 percent.
Perhaps Nassau residents pay a greater percentage of school taxes because they spend more on schools than fellow suburbanites? Wrong again. Compared to Westchester and Suffolk’s costs, Nassau’s are in the middle at about $16,800 a year per student. That’s $1,200 less than Westchester and about $800 more than in Suffolk.
So why do Nassau residents pay more of their incomes to support schools? It’s because they receive less state aid.
That, of course, raises the thorny question of how state aid is determined. The current system is Byzantine and based on an array of often conflicting formulas — more than 50 separate formulas that according to New York’s Supreme Court ”are understood by only a handful of people in state government.” The court has also found that the formulas are politically ”malleable” and manipulated ”to conform to budget agreements reached by the governor, the speaker of the Assembly and the Senate majority leader.”
These state aid formulas are based not only on the percentage of low-income students, but also on measures of wealth. Because property wealth is considered equally with income, even though homeowners cannot realize such wealth until they sell, the formulas tend to exaggerate the affluence of counties like Nassau, where home values have risen substantially in the last 20 years.
Economists say that with the median home price in Nassau now $437,000, more than half of Nassau residents could not afford to buy their own houses based on their incomes. Meanwhile, they are being squeezed on local taxes — primarily school taxes — based on the premise that they are affluent because of their property values.
This squeeze is particularly a problem for the elderly, who must contend with huge tax bills and soaring health care costs, and for the young, for whom property taxes make even a modest home in Nassau unaffordable.
Household income provides a more accurate picture of ability to pay taxes. In the wake of last week’s court ruling, it is crucial that state aid formulas be simplified. The state needs to recognize regional cost differences — a teacher’s salary, for instance, goes a lot further in Olean, in western New York, than it does in Oceanside. The formulas should not be subject to political manipulation. And most important, they should be tied to measures of income, not based on property values which in this overheated real estate market, are an indicator of neither income level nor ability to pay taxes.
Howard S. Weitzman is the Nassau County comptroller.