At the most recent meeting of the Westport Central School District's Board of Education, it was suggested by a man in the row I was sitting in that deep cuts in the school budget were necessary to provide tax relief for those senior citizens living in Westport solely supported by their Social Security benefits.* (Cutting property taxes to provide relief to the poor is, on the face of it, an absurd idea.)
What was suggested by those dissatisfied with the extent of the Board of Education's budget cuts thus far, those apparently seeking another $400,000 in budget cuts, was that staff layoffs are necessary to keep poor people on Social Security from losing their homes. I have been thinking about how to look at this by the numbers. Just today, I got an email suggesting that some of the WCS employees should "get the axe."
We could identify low-income elderly home owners by looking at what properties qualified for Enhanced STAR tax exemptions, but that program was discontinued in 2009,** and so the data might be hard to come by in 2010. Enhanced STAR exemptions were formerly available to "available to senior homeowners whose incomes do not exceed the statewide standard." I am going to see if I can get the data on this from the town.
The idea of cutting taxes to aid the poor is in principle an appealing idea, but one should bear in mind that 33% of the students at the Westport Central School qualify for reduced price lunches. And so one third of the school budget is already providing services to the low-income population.
It is not clear how cutting money from the school budget translates to cuts in what taxpayers in the Town of Westport pay in taxes. But from a standing start, if -- hypothetically speaking -- a $400,000 cut from the school budget translated frictionlessly to $400,000 less collected from taxpayers, that tax cut would have to yieild $133,000 in tax relief for low income households for the low income population to break even.*** This seems unlikely.
Off the top, for richer or poorer, 38% of the residential tax relief would leave the area because it was given to residential property owners with zip codes outside the Adirondack Park. So that leaves about 62% of the potential residential tax relief of which a bare minimum of $133,000 must go to the poor for the poor to break even on this deal.
Not all property tax bills are created equal. Property tax relief enacted by unilateral cuts in the tax rate per $100,000 is in proportion to the value of the property. For every dollar of tax relief delivered to the homeowner of a house assessed at $64,000, the home owner of a water-front property assessed at $649,000 gets $10.14; for a property assessed at a million dollars, the owner gets $15.62 in tax relief. So for every person with a million-dollar property, it takes 16 homeowners with $64,000 homes to equal him in terms of tax relief. In an area where there is such a large range of property values, the idea that unilateral property tax cuts are tax relief for the poor just doesn't work out.
I don't have all the numbers to work this out properly, but I defy anyone to demonstrate numerically how, collectively, the low-income residents of Westport can possibly realize a net gain out of a school tax cut. When evaluated as a tool for helping the poor, cuts in the school budget seem to be a regressive form of tax relief.
One further issue that needs to be addressed is how poverty is distributed in our community. My understanding is that a Westport resident age 18 or under is twice as likely to be living below the poverty line than a Westport resident 65 or over. So it doesn't make a lot of sense to cut programs benefitting children to give tax relief to those over 65 in order to address the problem of poverty in our community.
(Meanwhile, someone should do an analysis of the economic impact of Westport Central School along the lines of the report recently commissioned on the economic impart of Moriah Shock. It is possible that that kind of analysis would show a net gain for Westport taxpayers for each school employee, not a net loss.)
A further thought: There is one struggling segment of Westport resident homeowners that would benefit from school budget cuts as tax relief. In a column in the Valley News, Colin Wells, who is supportive of the school budget, discusses his struggle to hold onto a family property that he inherited. Cuts in the school budget might, in the short-term, benefit the owners of properties than have been in families for more than a generation, since the value of those properties may have no relationship to the earning capacity and other assets of the owners.
However, manipulations of the school budget are not a good instrument for helping such families. Their difficulties stem from much larger governmental systems than what can be controlled through the WCS Board of Education. Ironically, economic development and smart growth, the tools most likely to help everyone else, may ultimately force such owners out of their homes, since gentrification causes a rise in property values which is usually followed by a rise in tax assessments.
* Former school board candidate Ulrich Hoffmann summarized the comment as follows in an email apparently circulated to the Future for Westport email list:
It was noted, as well, that the Board should bear in mind that continued school tax increases in the high-single and double digit percentages are an intolerable burden on a major portion of Westport taxpayers. These persons are on limited incomes and/or are over the age of 65 and have incomes that come solely or primarily from Social Security which promises no increases in the next couple of years.
I'm not sure where these demographic claims come from. Using the figures from the Adirondack Regional Assessment Project, about 26% of the residents of Westport are over 65 as of 2000; the 2000 Census put the figure at 20.4%. Not everyone over 65 is retired. Surely, it is not being argued that we need to bail out second home owners who are solely supported by Social Security. Entitlement programs like Social Security were never intended to afford recipients a vacation home, nor should they be.
So this "major portion of Westport taxpayers" would need to come out of that 25% of the Westport resident population over 65. Using the figures from the Adirondack Regional Assessment Project, in Westport, of the three demographic groups they list -- under 18, 18 - 64, and 65+ -- those over 65 were the least likely to be living below the poverty level. (I don't have figures on the number of Westport residents living on Social Security who are under 65, but the number is unlikely to be large.)
It is possible that Mr. King's analytical framework is accomplished by first subtracting children from the community when assessing educational needs, or that "taxpayer" is a euphemism for "landowner." Even children pay sales tax. It has been a quite long time in America since only the landed could vote; suffrage only for the landed went out in the 19th century before women and non-whites got the right to vote. Surely, Mr. King is not consciously positioning himself as the champion of Westport's landed gentry.
Another implication of Mr. King's formulation is that adult recipients of income from government entitlement programs are more entitled to their benefits than children receiving an adequate K-12 education at public expense. That seems to me unreasonable.
Also, as far as I know, the double-digit tax increase under discussion and coming up for a vote is to fund the municipal center, not the school.
** The STAR tax relief program may be coming back. Its restoration apparently passed the NY State Senate. Also, as reported, it appears that Enhanced STAR exemptions would not be a good measure of "low income": the household income cap is $150,000 which is substantially above the median household income for this area.
*** Since a portion of the Town's retired people supplement their Social Security income by working part time for the school district and are among those most vulnerable to losing their jobs in the case of deep budget cuts, this figure should probably be higher.
