Add S1307, RPT L; add S25 & Art 2-A S26, amd S33, Gen Muni L; add S52-a, Leg L; amd Ed L, generally; amd
SS365-a & 368-a, Soc Serv L; add Art 4-B SS57 - 59, Exec L; add S742, amd S740, Lab L; add S190.73, Pen L;
amd SS211 & 217, R & SS L
Enacts the "New York state property taxpayers protection act"; relates to limitations upon school district tax levies; requires the state to fund certain programs mandated for municipal corporations and school districts; requires the estimated cost of mandated expenditures and appropriations within the body of the bill; relates to the streamlining of planning and reporting requirements for school districts and boards of cooperative educational services; relates to the effectiveness of additional costs to school districts; relates to state payment of all optional medical assistance services and to the state reimbursement of county payments for medical assistance fraud, waste and abuse detection software; enacts the "New York state school taxpayers' protection act"; establishes a municipal cooperation program; authorizes a county to enter into a cooperative agreement with school districts, towns and villages within such county to provide for health care benefits for their employees.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4141
SPONSOR: Fitzpatrick (MS) TITLE OF BILL: An act to amend the real property tax law, in relation
to limitations upon school district tax levies (Part A); to amend the
general municipal law and the education law, in relation to requiring
the state to fund certain programs mandated for municipal corporations
and school districts; to amend the legislative law, in relation to
requiring the estimated cost of mandated expenditures and appropriations
within the body of the bill; to amend the education law, in relation to
the streamlining of planning and reporting requirements for school
districts and boards of cooperative educational services; to amend the
education law, in relation to the effectiveness of additional costs to
school districts; and to amend the education law, in relation to aid for
fourth and eighth grade student testing (Part B); to amend the social
services law, in relation to state payment of all optional medical
assistance services and to the state reimbursement of county payments
for medical assistance fraud, waste and abuse detection software (Part
C); to amend the education law, the executive law, the general municipal
law, the labor law, the penal law and the retirement and social security
law, in relation to the oversight of school district contracts and
spending; and to amend the general municipal law, in relation to estab-
lishing a municipal cooperation program (Part D); and authorizing a
county to enter into a cooperative agreement with school districts,
towns and villages within such county to provide for health care bene-
fits for their employees (Part E)
PURPOSE: Establishes the "New York State Property Taxpayer Protection
Act." Provides for real property tax reform and relief by limiting the
property tax burden on homeowners and businesses; relieving school
districts of unfunded mandates; reducing county Medicaid costs;
strengthening financial accountability over school tax dollars; promot-
ing local government efficiency; and encouraging (at local option)
insurance pooling.
SUMMARY OF PROVISIONS: Section 1 and 2 sets forth the provisions of
the bill and provides the title of the act to be cited as the "New York
State Property Taxpayers Protection Act."
Part A:
Part A amends the Real Property Tax Law by adding a new Section 1307,
which provides limitations upon school district tax levies. Beginning
with the 2011-12 school year the amount of taxes levied for school
district purposes for any school year may not exceed the amount of taxes
levied for the prior school year by two percent, or by the inflation
factor, whichever is lower.
Provides exceptions to the tax levy limitation by voter approval, by a
two-thirds majority vote. No vote shall apply to more than one school
year. Further this section provides that if a school district is experi-
encing an enrollment growth, the tax limit may he increased in propor-
tion to the net percentage increase in such enrollment. In addition, if
the quantity of real property within the school district has increased
due to new construction, improvements or other physical changes, the tax
limit may be increase in proportion to the net percentage quantity
increase.
Provides for erroneous levies. In the event a school district's actual
tax levy for a given school year exceeds the maximum allowable levy
under this section due to clerical or technical errors, the school
district shall place the excess amount of the levy in reserve,
The provisions of this section shall apply to all school districts other
than city school districts which are subject to Article 52 of the Educa-
tion Law.
Part B:
Sections 1 and 2 amend the General Municipal Law and Education Law to
require that any state mandated program imposed on municipalities and
school districts, which creates an annual net additional cost in excess
of 510,000 or an aggregate annual net additional cost of $1 million, be
funded by the state. However, the state will not be required to fund any
new or expanded programs for municipalities and school districts if the
mandate is: required by a court order or judgment; provided at the
option of the municipality or district; results from the passage of a
home rule message requesting the statute; required by an Executive Order
of the Governor; or required by a statute or Executive Order that imple-
ments a federal Law.
Section 3 adds a new Section 52-a to the Legislative Law to require that
any bill that enacts or amends any expenditures or appropriations shall
state the estimated cost of such expenditure or appropriation in the
body of the bill.
Section 4 amends Section 215-b of the Education Law, to require the
Commissioner of Education to annually report to the Governor and Legis-
lature information necessary to assure the accountability of boards of
cooperative educational services for its fiscal and programmatic
resources. This report shall be submitted electronically over the Inter-
net through a secure webpage taking the place of paper copies.
Section 5 repeals subdivision 32 of Section 305 of the Education Law and
adds two new subdivisions 32 and 32-a to mandate the Commissioner, to
the extent practicable, to eliminate and streamline reporting require-
ments. The Commissioner is requited to create of a single comprehensive
district wide plan and building level plans that include, but are not
necessarily limited to, information such as capital plans. Such plans
shall be submitted electronically over the internet through a secure
webpage. Furthermore, the Commissioner is empowered to grant waivers of
all state imposed annual reporting requirements upon a finding that the
purpose of such reports can be met on a three or five year reporting
basis and the report is not necessary to compute state or federal aid.
Section 6 amends paragraph (c) of subdivision 4 of Section 1950 of the
Education Law, to incorporate boards of cooperative educational services
reports into district-wide comprehensive plans and requiring such
reports to be submitted electronically over the internet through a
secure website.
Section 7 amends paragraph (b) of subdivision 10 of Section 3602 of the
Education Law, to incorporate district plans of service for Limited
English Proficiency Aid into district wide comprehensive plans and
requiring such plans be submitted electronically over the internet
through a secure website.
Section 8 requires the Commissioner of Education to issue a report to
the Governor and Legislature detailing precisely what reporting require-
ments are waived or consolidated as a result of the authority granted to
him under this legislation to be submitted electronically over the
Internet through a secure website.
Section 9 amends the Education Law by adding a new section 207-b, to
require any policy, rule and regulation adopted by the New York State
Board of Regents that creates an annual net additional cost to any
school district in excess of $10,000 or an aggregate annual net addi-
tional cost to all school districts in excess of S I million dollars to
be approved by the New York State Legislature and signed into law by the
Governor; and may not take effect until the next school year after it
has become law.
Section 10 amends section 3602 of the Education Law by adding language
that would provide school districts a 100 percent reimbursement in state
aid for expenses generated as a result of fourth and eighth grade Math
and English testing mandated by the State Education Department starting
in the 2013-14 school year.
Section 11 provides the effective date for this Part.
Part C:
Section 1 provides the Legislative intent. The legislature finds that
Medicaid waste, fraud, and abuse increases for New York taxpayers state-
wide each year. This act will continue to make Medicaid reform, a top
priority in the hopes of saving each property taxpayer in New York
State. We believe that all savings recouped from the following Medicaid
reforms should be returned to the taxpayers in the form of property tax
relief.
Section 2 amends the Social Services Law by adding a new subdivision to
Section 365-a that would authorize the state to alleviate the county
costs of medical assistance by assuming all expenditures related to
providing optional services under the program. This provision further
requires that such fiscal relief be phased in over a five-year period
and any savings at the end of such period shall be used by the counties
and/or local social services districts to offset the cost of their real
property taxes.
Section 3 Amends the social services law by adding a new paragraph (z)
to Section 368-a of the social services law to require the state to
reimburse counties if such county has previously purchased or intends to
purchase data mining software that detects inaccuracies in the Medicaid
system. Further defines "data mining software" as a database application
that utilizes advanced data searching capabilities and statistical
analyses to discover patterns and correlations in the use and abuse of
medical assistance practices.
Section 4 provides the effective date for this Part.
Part D:
Section 1 sets forth the legislative findings that public school
districts in the state have recently experienced numerous instances of
financial scandals. Outlines the legislative as seeking to curb and
eventually eliminate scandals through the creation of a New York State
Inspector General for Education and by establishing new school district
financial safeguards with sanctions for violations of school district
finance laws.
Section 2 creates a mandatory reporting scheme for public school
district officials and employees to report any cases of suspected
corruption, other criminal activity or conflicts of interest occurring
within a school district. Any mandated reporter who willfully fails to
make such a report would be guilty of a class A misdemeanor with possi-
ble civil liability for violations. Any mandated reporter who in good
faith participates in making a report shall have immunity from liabil-
ity.
Sections 3 and 4 shall require the treasurer, of either a common school
district or union free school district, whichever is applicable, to
issue an annual report concerning all money received and disbursed by
the district with such treasurer certifying that they have reviewed the
annual report. In addition, the treasurer shall certify that based on
their knowledge, the report does not contain any untrue statement of a
material fact and the financial statements and other information in such
report fairly presents, in all material respects, the financial condi-
tion of the school district.
Section 5 requires a public school district superintendent to certify in
the annual financial report that they have reviewed the annual report.
Furthermore, the superintendent shall certify that based on their know-
ledge, the financial statements and other financial information fairly
presents in all material respects the financial condition of the school
district and the report does not contain any untrue statement of a mate-
rial fact,
Section 6 requires all public school districts outside of New York City,
except those with less than eight teachers, to establish a local school
district compensation committee to oversee and report on proposed
employment contracts between school districts and those districts'
bargaining units, administrators and superintendents. Only one of the
three compensation committee members is allowed to be from a school
board and no school district employees may serve on such committee.
Section 7 mandates school districts to give notice of the availability
of proposed employment contracts or agreements at public libraries, the
school district office(s) and on the school district web site (if one
exists) at least five weeks prior to the vote on whether to approve such
contract.
Sections 8 and 9 amend the current Education Law to require annual
school district budget administrative components to contain a section
outlining all compensation and fringe benefits to which school district
teachers, administrators and superintendents are entitled under existing
employment contracts.
Section 10 and 11 provide for the annual school district budget state-
ment to be placed on the school district web site (if one exists) and
notice be given to the availability of such statement at public
libraries and school district offices at least thirty days prior to any
school budget vote.
Section 12 stipulates that a school district who prepared a corrective
action plan in response to any findings contained in a State Comptrol-
ler-issued audit report shall notify residents of the availability of
such plan at public libraries, the school district office(s) and on any
existing school district web site. Failure to comply with this require-
ment shall subject a school district to a civil penalty of up to $5,000.
Section 13 establishes a new, independent office called the "Office of
the State Inspector General for Education." This office would be charged
with receiving and investigating complaints from any source, or on its
own initiative, regarding allegations of corruption, financial impro-
prieties, unethical conduct, misconduct or other criminal conduct within
public school districts. The Inspector General for Education would also
issue a yearly report to the Legislature, Comptroller and the Board of
Education that details the results of the Education Inspector General's
investigations and contain detailed analysis of the current financial
status of those school districts that have been reviewed.
Section 14 amends the General Municipal Law to require the State Comp-
troller to audit federal and state grant program expenditures in all
school districts, BOCES and charter schools,
Section 15 amends the General Municipal Law to require the State Comp-
troller to report any final audit report findings from audits performed
on the grant program expenditures of school districts, BOCES and charter
schools to the Office of the State Inspector General for Education.
Sections 16 and 17 amend the Labor Law to enact protections for any
public school district employee who in good faith acts as a "whistle-
blower" by reporting an activity, policy or practice of a public school
district (or agent of such district) that the employee reasonably
believes constitutes fraud, criminal activity or other malfeasance.
Section 18 amends the Penal Law to create the crime of "defrauding a
public pension plan," a class E felony, whenever a person engages in a
scheme of an ongoing course of conduct with intent to obtain a benefit
or asset, or assist a third party to obtain a benefit or asset, from a
public pension plan to which the person or the third party is not
other-wise entitled to pursuant to the restriction of Retirement and
Social Security Law Section 211.
Section 19 amends the Retirement and Social Security Law by expressly
providing that a retired person receiving a retirement allowance, who is
employed and earning compensation in a public service position with
total compensation exceeding the applicable Retirement and Social Secu-
rity Law section 212 limit without having receiving the requisite legal
waiver of such limit, as well as any person who knowingly assists anoth-
er person the above mentioned conduct, is guilty of larceny and is
punishable for such as provided in the Penal Law.
Section 20 amends the Retirement and Social Security Law by requiring
any public school district BOCES and college or university to report all
money earned by a retired person in their employ that exceeds the afore-
mentioned Section 212 limit, to the applicable retirement system from
whom such retired person is receiving their retirement allowance: Addi-
tionally, a school district employing a retired person eligible to
collect, or already collecting, a retirement allowance from a
state/local school retirement system shall report on a monthly basis to
both the applicable retirement system and the New York State Inspector
General for Education. The report shall list the re-employed retiree's
name, date of birth, place of employment, current position and all earn-
ings.
Section 21 amends the General Municipal Law by adding a new article, 2-A
titled: The Municipal Cooperation Program (also known as Metro-STAR).
This new section establishes: a State Commission on municipal cooper-
ation, and eight regional municipal cooperation commissions; the member-
ship of the state conference, the purpose and powers of state confer-
ence, and process for development of regulations to govern the
commissions; the membership and powers of regional commissions; the
process for the appointment of executive director and staff; the mission
of the regional commissions (which is to: increase communications
between local government to foster the sharing of municipal services
where appropriate; technical and financial assistance to local govern-
ments seeking to merge or share services; the identification of state
and local laws which require changes to facilitate the productive shar-
ing of services); and the manner in which funds will be set aside for
different types of projects.
Further this section requires each regional commission to seek to
provide research assistance or in lieu thereof, grants to localities
that seek to research the efficacy of mergers or consolidations; when
such research is beyond the scope of the commission. In addition, this
section provides for implementation of grants to localities that seek to
implement mergers or service consolidations. Provides that grants to
support service consolidation will be funded at no more than 50 cents
per dollar of costs, and grants to defray the cost of implementing merg-
ers may be fully funded. Cooperation reward grants will be provided.
Cooperation reward grants are grants provided by the state to localities
that execute a merger or consolidation of services, in the form of
matching grants for savings achieved through cooperative efforts. Grants
for service consolidations can be as much as 50 percent of savings, and
grants for mergers can be as much as 100 percent of savings. Finally,
this section ensures that all local governing authorities, to include
school and special districts, can participate in this program.
Section 22 provides the effective date for this Part and provides that
any cost to any school district pursuant to sections two through 20 of
this act shall be paid by the state.
Part E:
Section 1 amends the Insurance Law or any other provision to the contra-
ry, authorizing a county to enter into a municipal cooperative agreement
with one or more school districts, towns or villages in order to provide
health care benefits or establish a health care plan for their respec-
tive employees. Such county is authorized to charge an administrative
fee to a municipality for participation in such agreement.
Section 2 provides the effective date for this Part.
Section 3 provides the severability clause.
Section 4 provides the effective date for the act, provided, however,
that the applicable effective dates of Parts A through E of this act
shall be specifically set forth in the last section of such Parts.
JUSTIFICATION: New York's property tax system is in dire need of
change in order to keep the residents of New York in their homes. The
sheer cost of living in New York has forced many residents and busi-
nesses to leave, thus slowing the economic engine of the Empire State.
Currently, New York collects 78% above the national average in local
taxes making New York the highest in the nation. In 2008, New York was
ranked forth in median property taxes paid on homes with an average of
53,662. Thus, reducing. New York's tremendously high tax burden is the
number one issue facing families throughout our state.
Part A: Limiting the Property Tax Burden on Homeowners and Businesses
This section controls property taxes increase by: preventing school
district tax levies from increasing by more than 2% each year or the
rate of inflation, whichever is less. It also provides voters with the
ability to override this limitation by a two-thirds majority vote. Note:
the increases in school district enrollment can be reflected in the
limit and that the tax limit may proportionately increase due to new
construction and expansion of the community.
In 1997, as part of his Executive Budget proposal, Governor Pataki
introduced the STAR program. While thousands of taxpayers across the
state are familiar with the benefits of this program, few may remember
that the original STAR proposal included a limitation on school district
tax levy growth identical to what has been proposed here. While this
provision was excluded from the enacted STAR program, it was not the
first time such a proposal was presented. In 1995, Speaker Silver had
his own "Real Property Tax Limitation Act," which passed the Assembly
(A.6171, Passed 144-1).
Part B: School District Mandate Relief
Restrictions on Unfunded Mandates
State mandated programs, unlike locally rendered decisions, place local
taxpayers and officials in the difficult position of paying for services
which they have little control over. The state has mandated local prior-
ities that force municipalities and school districts to increase spend-
ing and thus increase tax bills. This section requires any state mandate
proposed by the Board of Regents, Legislature or Governor that is
imposed on a municipality or school district and costs more than 510,000
a year (or has a statewide additional cost of $1 million) to be funded
by the Legislature.
Fiscal None to the state; future savings to muni-
cipalities, school districts and property taxpayers from the elimination
of unfunded mandates by the State of New York and Board of Regents.
Mandate Cost Reporting on Legislation
Responsible decision-making requires that the fiscal impact of legis-
lation must be known. to all parties before a bill is voted upon by the
Legislature. All too frequently, the Legislature has approved measures
without blowing the estimated cost of mandated expenditures or appropri-
ations. This includes the imposition of unfunded mandates on local
governments that have crippling effects on local budgets and have added
to the already high tax burden placed on all New Yorkers. It is well
documented that over one million New York residents have moved to other
states since 2000, largely due to the high cost of living and doing
business in the state. We can help reverse this trend by truly under-
standing the fiscal implications of legislative actions. This measure is
an important step in accomplishing this objective. Coupled with unfunded
mandate relief, we ensure that local governments and taxpayers across
the state remain in control of local spending and services.
Fiscal:
None to the state; however, the State and local governments will benefit
immensely by knowing the fiscal impact of legislation which may also .
act as an impediment to the passage of certain legislation.
Paperwork Reduction
on June 1, 2003, the Commissioner of Education, acting pursuant to
legislation, issued a report detailing 125 state, federal and local
reporting requirements imposed on school districts. The report confirmed
the assertions of administrators that paperwork was taking valuable time
away from core academic responsibilities and contributing to bureaucrat-
ic expenditures. Unfortunately, more than three years after its issu-
ance, no steps have been taken to eliminate this onerous mandate. This
section, also known as the "Paperwork Reduction Act," accomplishes this
goal by giving the Commissioner of Education the power and responsibil-
ity to consolidate needed reporting requirements and eliminate unneces-
sary ones, saving taxpayers and school districts valuable time and
money.
Fiscal: None to the state; School district and property taxpayer
savings as a result of reducing paperwork.
Fourth and Eighth Grade Test Reimbursement
Many school districts have experienced an increased cost as result of
the Board of Regents requiring fourth and eighth grade testing of Math
and English. This requirement places an unfunded mandate on school
districts across the state. This bill would provide a 100 percent
reimbursement to school districts statewide for costs incurred as a
result of fourth and eighth grade Math and English tests, starting in
the 2008-09 school year. This provision is a good faith effort on behalf
of the New York State Legislature to eliminate unfunded mandates placed
on school districts as a result of changes to state law, policy or regu-
lation.
Fiscal: an estimated $30 million cost to the state; future
savings to school districts and property taxpayers.
Part C: Lowering Property Taxes through Reducing County Medicaid Costs
Enabling Local Governments to Combat Medicaid Fraud
Medicaid waste, fraud and abuse are estimated to cost New York taxpayers
approximately $4.5 billion annually. Between DOH and the State's Medi-
caid Fraud Control Unit (MFCU), New York spends more than $130 million
to combat fraud annually.
This section provides approximately $7.5 million to counties to do their
own fraud investigations (thereby, freeing up resources at the State
level for more complicated cases) by reimbursing counties that have
previously purchased or intend to purchase data raining software. This
software is a database application that utilizes advanced data searching
capabilities and statistical analyses to detect inaccuracies in the
Medicaid system. Counties can immediately determine where there may be a
problem by drilling through reimbursement data, thus giving them better
control of their Medicaid dollars and increasing accountability to
taxpayers.
Combating Medicaid waste, fraud and abuse is the first step in fixing a
broken system. The Medicaid program itself was established with honest
intentions and it is our duty to preserve it so that those individuals
who need Medicaid services the most receive them, and those who are
utilizing Medicaid fraudulently are prosecuted accordingly.
Fiscal:
$7.5 million cost to the state; future savings of $4.5 billion to the
State, local governments and property taxpayers as a result of reducing
Medicaid Fraud.
State Take Over of Optional Medicaid Services
This section requires the state to take over financial responsibility
for all optional Medicaid services within the next five years, ultimate-
ly saving taxpayers 510 billion. This measure will allow overburdened
county governments to return the costs savings in the form of lower
property taxes. According to the New York State Association of Counties
(NYSAC), Medicaid costs are the largest part of county budgets, and in
some cases, the cost of providing Medicaid services is greater than the
amount of property tax revenue collected. New York is second behind
Wisconsin in the amount of optional services it provides to persons
eligible to receive Medicaid. Medicaid spending is also one of the
primary reasons that taxes in New York have escalated in the past
decade. By requiring the state to pick up the tab for optional Medicaid
services, counties can lessen their burden even further and put this
money towards much needed property tax relief.
Fiscal: Future cost
savings to local governments and property taxpayers of $10 billion as a
result of the state absorbing these costs.
Part D: Strengthening Financial Accountability Over School Tax Dollars
and Promoting Local Government Efficiency
Enhancing Fiscal Oversight
While New York has some of the best teachers and administrators, there
continue to be instances of school district property and tax dollar
abuse. Because of the magnitude and frequency of financial crimes occur-
ring in the public school system, this section supports the strengthen-
ing of accountability over school tax dollars by creating the Office of
State Inspector General for Education. This new and independent state
agency will have broad authority to investigate financial abuses in
schools, allegations of corruption or other misconduct within the
district, and refer cases to the appropriate law enforcement authorities
when warranted. The office will also be charged with issuing recommenda-
tions to assist school districts in avoiding such problems in the
future. This addition is in response to a grand jury investigation into
numerous public school financial misdeeds and reflects virtually all of
the legislative recommendations made by such grand jury. The overall
goal is to increase transparency by ensuring fiscal accountability over
the $43 billion in taxpayer funds spent on education in our state.
Fiscal: 524.7 million cost to the State for the first year of the
program and after five years of the program the state and property
taxpayers should realize net savings of $9 million. The state will
absorb any costs to school districts as a result of this section.
Metro-STAR
It has been widely acknowledged that New York State has too many layers
of government that cost too much to run. Currently the state has over
4,200 local governments and approximately 9,200 taxing jurisdictions.
These government entities have in part been responsible for systemic
inefficiencies and service overlaps at the expense of the taxpayers. Our
goal is to reduce local government's reliance on property taxes by
encouraging consolidation of services. This section provides $30 million
in Metro-STAR grants to research the efficacy of mergers or consol-
idations of local governments that help reduce the tax burden on home-
owners. Metro-STAR provides localities with the assistance and incen-
tives they need to work more effectively by sharing services, or fully
merging, where appropriate.
Fiscal: $30 million cost to the state for
local government grants
Part E: Encouraging Insurance Pooling
Insurance Pooling - Local Option
The pooling of risk for health insurance spreads the cost for health
care across a greater number of participants who are in the pool. The
higher the number of participants, the more stable the average cost per
user becomes since participants who incur high health care costs are
more easily absorbed. Governmental employees' health care insurance
premiums are frequently contributed to by the employer as a benefit. By
reducing the total premium for health insurance for these workers, the
contribution from the government is decreased, resulting in savings for
the taxpayer.
Fiscal: None to the state; future savings to munici-
palities and property taxpayers as a result of decreased insurance
costs.
PRIOR LEGISLATIVE HISTORY: 2010 - A.2796 - Held in Education 2008 -
A.8775-A - Held in Education
FISCAL IMPLICATIONS: Overall Fiscal Impact of "Property Taxpayers
Protection Act" $10.1 billion cost to the state over a five year period.
$t6 billion in municipality, school district and property taxpayer
savings over a five year period.
EFFECTIVE DATE: This act shall take effect immediately provided;
however, that the applicable effective dates of Parts A through E of
this act shall be specifically set forth in the last section of such
Parts.
