State legislators reject Hochul’s education aid changes, propose tax hikes on wealthy earners

The New York State Legislature is pushing back on Gov. Kathy Hochul’s budget proposal, introducing alternative plans that would raise taxes on wealthy earners and increase funding for schools across the state. 

Both the State Senate and Assembly Democratic majorities propose more state funding for school districts than Hochul set forth in her plan. Although Hochul proposed increasing school aid statewide 2.4%, her budget would institute a change to the state allocation formula that would cause some districts to see a loss in funding.

Under Hochul’s proposal, the Riverhead Central School District’s state funding would increase by $3.3 million to a total of $80.4 million. That is not as much as the district would get if the formulas remained as they are now, and school administrators have said they expect budget negotiations with legislators to restore that funding. It is currently unknown how much more Riverhead schools might receive if the state fully funds the aid.  

Both chambers propose allocating $1 million for the State Education Department to recommend updates and changes to the state Foundation Aid formula.

More money from the state could be important for Riverhead schools, which is seeing the loss of nearly $20 million in temporary federal coronavirus funding. The school district’s administration has proposed an increased budget that would cut back on employees — including the equivalent of roughly 38 teaching positions — and raise district taxes as much as possible without exceeding its tax levy cap. 

The school district’s interim business official, Marianne Cartisano, has said the district will “do a better job in staffing and allocating our faculty resources” next year. Cartisano is set to speak at tonight’s school board meeting about the district’s instructional staffing plan. 

Both chambers also propose raising the income tax rate for businesses and people making more than $5 million. The income tax for earners with a personal income over $5 million but not over $25 million would rise from 10.3% to 10.8% and for earners making over $25 million from 10.9% to 11.4%, from 2024 to 2027.

Other highlights in the Senate and Assembly bills include: 

• The Assembly proposes expanding the earned income tax credit to a wider income range and establishing a one-year homeowner tax rebate program for households eligible for STAR benefits that have incomes at or below $250,000. 
• The Senate proposes replacing an existing child tax credit with a new and “more generous” Working Families Tax Credit that would offer $550 per child to married couples earning under $130,000. Couples with higher incomes could receive a reduced credit.
• The Senate proposes increasing the value of a tax credit for volunteer firefighter and ambulance workers from $200 to $800.
• The Senate proposes creating a payroll tax credit for independently owned media entities employing news journalists of 100 or fewer employees.
• The Senate proposes cutting New York off from the federal Qualified Opportunity Zones program and taxing capital gains from investment in those zones the same as other capital gains.
• The Assembly proposes spending $200,000 more for the Peconic Bay Estuary than proposed by the governor, for a total of $750,000.
• The Assembly proposes allocating $100 million for Office of Parks, Recreation and Historic Preservation grants for municipal parks, including $50 million for projects in underserved communities. 
• Both chambers propose allocating money for a commission to study reparations. The Assembly proposes spending $5 million, while the Senate proposes spending $10 million.
• The Senate proposes creating the Office of Racial Equity and Social Justice to plan and coordinate changes in race or social justice policies and practices, and creating the Office of Native American Affairs to act as a resource for Native American nations.
• Both chambers propose creating an Office of Civil Representation with the goal of helping provide legal representation for people at risk of losing housing. 
• Both chambers propose providing $500 in clean water infrastructure funding, restoring a $250 million cut proposed in the governor’s budget.