Time for Action

Wainscott School District is in a pickle. How it got there is instructive for a variety of reasons. The situation suggests that the state’s “one-size-fits-all” approach to keeping school budgets reined in has a glitch that is unworkable for the smallest school districts, no matter how wealthy they are. There are only two answers: carving out an exception for tiny districts, or getting rid of them altogether.

A cap on tax levy increases, first signed into law by then-Governor Andrew Cuomo in 2011, affects all municipal governments and taxing districts, but it was clearly aimed at school districts. In the 30 years prior to its enactment, state officials noted, school district tax bills were rising at an annual rate of 6.3 percent, nearly twice the average annual increase in the Consumer Price Index. The cap mandated that all budgets, with some exceptions for certain types of spending, had to be funded by a tax levy that was no more than 2 percent greater than the previous year. For school districts, a larger increase would require a 60 percent vote by taxpayers on the budget in the spring.

The cap was made permanent in 2019, and it has done its work: On Long Island, the overall increase in taxes has dropped below 2 percent annually. But a district like Wainscott — a wealthy district that spends more than $36,000 a year per pupil, according to the most recent data by the State Department of Education — is handcuffed.

A decade ago, Wainscott had a healthy fund balance of $2.4 million, which was equal to well over half its annual budget. But that’s a problem: The state comptroller stepped in, requiring the district to return most of that to taxpayers, since the state allows districts to keep only 4 percent or less as a fund balance — at the time, about $140,000.

A small district like Wainscott cannot quickly raise taxes, nor can it create a “rainy day” fund of even modest size. So when the unthinkable happens — say, 20 students move into a district with a total enrollment of 100, as happened last year — the fiscal impact is devastating. That’s made worse by the fact that it’s not simply a matter of absorbing new students into existing classrooms: Because the district only has classrooms for kindergarten through third grade, the biggest expense is paying tuition to neighboring schools for older students.

Even the district’s best math students couldn’t solve this equation. The only real solution was for Wainscott voters to understand the dilemma and approve the $6.1 million budget with more than 60 percent of the vote, accepting that a jump in taxes (in a district with a relatively low tax rate) was not a matter of mismanagement or profligacy, just a fact of life in an antiquated district.

That didn’t happen. Wainscott is now in no-man’s land, so to speak, hoping for the State Legislature to help find a way out. And it should — but not just in the short term. This requires more than a stopgap solution.

The legislature might step back from the celebration of the tax cap’s success and recognize this lone flaw, which pushes a small district to the breaking point when there are unforeseen changes. It should be noted that Wainscott, and other small districts, very well could see a repeat of this math in future years, as these are areas where the push for more affordable housing — with the full support of Albany — will take place.

So the state should consider certain enrollment triggers that allow a smaller district to sidestep the cap. Or perhaps allow smaller districts to create reserve funds solely to provide a cushion to deal with such circumstances.

Alternately, the state might decide that this is a red flag suggesting that the time of tiny school districts is past, that economy of scale requires the dismantling of a system where tuition is paid to educate older students in neighboring districts, and simply require every school district to offer K-12 education within its borders — and if it cannot, it must consolidate.

Wainscott’s plight in 2023 is unusual, but it’s not going to be isolated. New York State has a dilemma, too. It’s time to fix it.