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SCHOOL-TAX RELIEF FROM ALBANY? GOOD IDEA, BUT DON'T COUNT ON IT

One of the issues clogging the legislative arteries at the state Capitol involves the financing of public education. There are competing proposals to lower the local property taxes that fund schools by substituting money from the state. But agreement is elusive as Albany's three-cornered power structure fails again and again to settle much of anything this year.

The basic concept is right. Property taxes are regressive, particularly hurtful to elderly homeowners and struggling families with modest incomes. As school taxes increase year by year, it's small wonder that taxpayers are organizing to fight back, generally, and defeat school budgets, specifically. Shifting more school financing to the state means a greater share of the burden would be carried by the more progressive income tax and sales tax. That's a fairer way to go.

New York can also look to the prominent example of Michigan, which a few years ago simply banned use of local property taxes to fund schools and had the state step in. There was more leeway there, however, than New York has now; Michigan's state sales tax was low enough to be raised without unduly burdening the public.

This year in Albany, Republican Gov. Pataki, the Republican-led Senate and the Democratic-controlled Assembly have all put education-financing plans on the table with considerable fanfare and self-congratulation.

Not surprisingly, the Pataki and Senate plans have a common core. Homeowners would get $30,000 knocked off a home's full-value assessment when school taxes are computed. Those over 65 years of age with incomes under $60,000 would get $50,000 off. New state aid would make up for the revenue lost at the local level. Cost to the state would be $1.7 billion when the reductions are implemented in full in five years.

The plans from Pataki and the Senate would also give extra aid to school districts that freeze or reduce their property tax levies, and the Pataki plan puts a cap on property-tax hikes.

The Assembly plan shells out $5.5 billion in new aid over five years to provide pre-kindergarten and full-day kindergarten for all children, low class size for early grades, school building construction and other programs. In a can-you-top-this mode, the Assembly promises even greater tax relief than the GOP plans.

As right as the tax-relief concept is, there are flaws and questions about all the plans.

Are state finances structured to afford the relief? All three grow from small beginnings in the first year to full scale over five years, guaranteeing ever-increasing state spending at a time the state is also slicing its own taxes year by year. Tax caps and freezes sound good, and in economic boom times they can also work pretty well. But local school boards ought to have flexibility within whatever limits are set by local voters, not by the state.

Finally, the Assembly's plan has no mechanism to guarantee that the extra state money spent on schools would actually provide local tax relief.

But perhaps the biggest problem is the skepticism informed citizens must have about Albany in this Year of the Sloth. Grand plans might be churned out daily by single sources of Capitol power, but in the present climate nothing much is really happening.

The sorry truth is that the three centers of power cannot bring to finality a budget that would include a tax-relief plan negotiated to the point where all can support it. Progress has eluded them month after month. It's getting difficult to take them seriously.

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