Falls' School District Will Have to Boost Levy

Niagara Falls School Supt. Cynthia Bianco faces unprecedented challenges.

The Niagara Falls School District  announced that they might be forced to increase their tax levy for the first time in 19 years due to a budget crisis caused in large part by the massive increase in the employer contribution rate to the New York State Teachers Retirement System (TRS).

The increase will come right off the top of the state aid the district receives this year, putting Niagara Falls in the position of having to utilize $2.5 million of their reserve fund and increasing the tax levy between 3 percent and 3.7 percent to make up the difference.

The TRS is the second largest public retirement fund in New York. The employee contribution rate is set annually in July and determines, based upon the stock market, how much a district will have to pay into the system each year. The actuaries in charge of the pension fund assume an eight percent investment return each year, which means that during a market downturn, the taxpayers must make up the difference.

Despite the stock market being at an all-time high, the rate over the past two years exceeded 11 percent, requiring Niagara Falls to dip into its reserve fund to make up the difference. The looming 37 percent increase in the employee contribution rate could have the effect of depleting the district’s reserve fund completely if the Seneca casino cash issue isn’t resolved by the end of June.

Lawmakers have hinted that a bridge loan may be made available to the district in the  event the dispute between the state and the Senecas continues to protect the $1.5 million in lost casino cash from having to be written off as a loss to the district.
The district is facing a grave problem.

And while it is true that this increase is the first increase in the local tax levy in 19 years, that single fact tells only a part of the story.

Individual taxpayers are paying more in taxes than they did 19 years ago.

The reason for this is that the city has been losing population at the fastest rate in the region, if not the state, for decades. It is anticipated that after the next census Niagara Falls’ population will fall below the 50,000 number required to qualify for federal aid to cities.

Niagara Falls is a shell of what it used to be, and the number of children enrolled in the school district reflects that reality. In the last decade, enrollment in the district has fallen approximately 18 percent, yet the local tax levy of $25,076,688 remained the same. In the 2003-04 school year, there were 8,457 students enrolled in the Niagara Falls district, representing a per-child local cost of $2,965. Enrollment for the 2010-11 school year indicated that there were only 6,896 students enrolled, which equals a $3,636 per-child cost to local taxpayers.

And it wasn’t just children moving out of the district, but their parents -- the taxpayers themselves -- leaving behind a smaller number of people to shoulder the ever-increasing burden of education.

So while the levy never increased, those left wind up paying more for less.
This is ironic too, because the challenges that this poverty district faces requires the administration and the teachers to do more with less.

it seems only the retired teachers are required to make no sacrifices. 

Meantime, many of the people who left Niagara Falls did not move to adjoining districts, so that their state tax dollars might flow back into the city anyway. New York State lost two congressional seats after the last census, indicating that many people are simply leaving the state altogether.

People are leaving the high tax and spend states to places where business friendly governments prevail.

It is a vicious circle.

Niagara Falls is a "high-needs" district and that means more money from the state and federal governments. It is true that last year’s $67 million capital project referendum isn’t going to cost local taxpayers a dime. And the district received $89.4 million in state aid last year toward a $122 million budget, or more than 73 percent of its total budget in state aid.
Neighboring districts such as Lew-Port, which receives 34 percent, Niagara Wheatfield (45 percent), Lockport (48 percent), and North Tonawanda (49 percent) receive much less state aid, and therefore, the local taxpayers pick up a greater share of the education costs each year.

It might be instructive to ask what kind of a return the taxpayers of Niagara Falls are getting on their investments. But it requires a little more than a cursory study.
The total per pupil cost to “educate” a child in Niagara Falls is approximately $17,500 a year based on the total budget amount and student enrollment figures, producing a 73 percent graduation rate.

North Tonawanda spends around $16,900 per student and 84 percent of its students graduate.
Lockport’s graduation rate is eight points higher than Niagara Falls, yet they spend only $15,800 per student. Niagara Wheatfield manages 88 percent graduation rate for only $15,250 per student, giving its citizens the best bang for their educational buck.

Lew-Port, the local gold standard, spends approximately $18,000 per student, but it graduates 95 percent of its students.

But, before one leaps to the hasty conclusion that these schools are doing better a job than Niagara Falls, a look at other numbers show that none of these face anywhere near the same challenges. The numbers reveals that a strong correlation exists between poverty and graduation rates, much more so than how much is spent per pupil.

Until the underlying social issues like out-of-wedlock births and single-parent households that often lead to poverty are addressed, no amount of money will fix the problems in cities like Niagara Falls.

To a cynic, it might appear that taxpayers are being asked to pay to fund a generous retirement plan rather than to ensure student success. Education used to reflect the values of a community and the schools were the mechanism by which we passed them on to the next generation. Perhaps the students have learned all too well the lesson that being a poor school district “pays” in tax and spend, big-nanny New York State.

Nothing else seemingly does.