Trump’s tax law will blow up New York's school funding politics

Joyce N. Boghosian/White House

That loud rumbling sound New Yorkers are hearing is the ground shifting beneath their feet.

The recently enacted federal package of tax cuts and increases does much more than increase the state’s outsized contribution to the federal treasury. It will fundamentally transform New York’s government and politics by undermining support for current school funding arrangements.

To provide a quality education to a population with many high-needs students, New York spends more per pupil than any other state – an average of more than $22,000 a year. This figure varies throughout the state and there is a lot of attention paid to disparities in school spending. Many school districts don’t have sufficient local resources and need state funds to pay for teachers, physical space and supplies.

Most education money comes from two separate taxes. The local share is usually paid mostly by property taxes, a particularly regressive tax that does not consider the taxpayers’ income or ability to pay. In most of the state outside New York City – which has low property taxes and an income tax – school property taxes are an enormous social and political problem.

The state steps in with its own funding on top of the local share, getting its money from the income tax, and distributing it through a formula that sends most of the money to poorer districts. A wealthier suburban district can get as little as 5-7 percent of its budget from the state. Poorer districts, most of them upstate, get 70-75 percent of their budgets from the state. New York City gets 40-50 percent of its budget from the state, largely because it is a wealthy district when compared to the statewide average.

RELATED: How the tax law could exacerbate NY's stagnant population growth

It’s not as complicated as it seems. The state redistributes income tax revenue to make up for disparities in wealth. Schools across the state function under the system. Taxpayers everywhere complain, but it has been a stable system. The regional impacts are clear. Generally speaking, New York City gets back in state dollars a little less than it sends to Albany in tax payments. Upstate gets an enormous subsidy provided by suburban taxpayers.

President Donald Trump has blown up that delicate balance. Measured across all state programs – not just education – New York City and the suburbs send billions of dollars to upstate communities. That system has been tolerated partially because it’s fair: State dollars are directed at communities that need the money for basic services, including schools, and partially because political leaders bargained their way into a sustainable compromise.

Enter Donald Trump. His tax reform legislation unravels a central economic premise of New York’s school funding system. Suburban taxpayers pay both high property taxes and high state income taxes, but they could deduct from their federal income taxes what they paid in state and local taxes. That deduction is now capped at $10,000, far less than the state and local taxes paid by many middle-class and affluent homeowners in New York City and its suburbs. So now many of those New Yorkers will see their total tax liability increase by thousands of dollars a year. New York, already the largest net donor among the states, will be sending an additional $14 billion per year to Washington.

This will undo the political bargain that has kept the current system afloat. Suburban taxpayers might be willing to absorb an additional burden if those dollars flowed to their home districts. Instead, slowly but surely, they will learn that their money is heading out of town and they won’t like it. That will inevitably erode public support for regional subsidies. A taxpayer revolt is coming.

RELATED: The tax law won't help New York clean up its act

To make matters more complicated, many upstate voters are under the false impression that they are subsidizing downstate, and many advocates for low-income communities in New York City already want to redirect more school funds from the suburbs to the city. The city as a whole isn’t poor, but it has large numbers of high-needs students – children from neighborhoods of concentrated poverty, special education students and English language learners – that drive up costs. As the Trump tax reform law and other Republican policies take more money from New York and cut more social spending, local government budgets will feel the squeeze. Upstate Republicans and New York City Democrats will both be looking to get more money for education from the same suburban taxpayers who are already taking a huge hit from Trump’s tax law.

The state government, especially Gov. Andrew Cuomo, will have to find a solution to this brewing problem. When this conflict will come to a head is uncertain, as it will take time for state voters and politiciansto make connections between their growing tax bill and the school aid debate. But it will happen, and the smart folks in Albany better start thinking about how best to respond to it.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.