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Do boards of education have the option of placing multiple expenditure propositions on the ballot for voters to consider in addition to the main budget this May?  For instance, can funding for sports, extra-curricular activities and kindergarten be voted on separately from other general fund expenditures? The answer is yes, thanks to wording of the tax cap legislation. The State Education Department confirmed this in a guidance document issued March 20 and posted on the SED website (www.p12.nysed.gov/mgtserv/propertytax/taxcap).

The issue has been debated in the state’s legal community because the commissioner of education ruled in 2006 that, with some exceptions, school districts are not permitted to place separate expenditure propositions on the ballot.

In Appeal of Hubbard, 45 Ed. Dept. Rep. 496 (2006), the commissioner considered a district that had asked residents to vote on separate propositions for (a) the purchase of new buses with general fund monies and (b) a change in the district’s transportation policy. While the commissioner found no flaw in the second proposition, he found that the board of education was without authority to present a separate proposition to purchase buses with general fund monies. However, the commissioner said it is permissible to have a separate proposition for the district to use debt financing to pay for a bus purchase or capital expenditure.

The commissioner cited section 170.8(d) of the Commissioner’s Regulations, which requires school districts to present a budget to district voters in three components: an administrative component, a program component and a capital component. In this case, the buses were not being financed as a capital expense, so it was not appropriate to present them to the voters in a resolution separate from the program  component.

This ruling would suggest that it is inappropriate to break the program component of the budget into two or more resolutions. But that was before changes in section 2023 of the New York State Education Law concerning the tax cap. Section 2023-A(9) of the law specifically permits boards to submit additional items of expenditures to the voters for approval as separate propositions. The law states that for such propositions to pass, they must receive at least 60 percent approval from the voters if the proposition or all of the propositions, collectively with the primary budget resolution, would result in a tax levy that exceeds the cap. Presumably, only a simple majority would be required if all of the budget resolutions, collectively, are under the cap.

The statute states:

Nothing in this section shall preclude the trustee, trustees, or board of education of a school district, in their discretion, from submitting additional items of expenditure to the voters for approval as separate proposition or the voters from submitting separate propositions pursuant to sections two thousand eight and two thousand thirty-five of this part, provided, however, except in the case of a proposition submitted for any expenditure contained within subparagraphs (i) through (iv) of paragraph 1 of subdivision two of this section. If any proposition, or propositions collectively that are subject to a vote on the same date, would require an expenditure of money that would require a tax levy and would result in the tax levy limit being exceeded for the corresponding school year, then such proposition shall be approved if sixty percent of the votes cast thereon are in the affirmative.

Officials in the State Education Department have advised the authors that the new legislation, in essence, nullified the Hubbard ruling. Therefore, school districts may submit a separate proposition for budgetary expenditures. Another issue involves what level of approval is required when there are multiple budget resolutions. While it is clear from the legislation that the separate proposition must be approved by a 60 percent voter margin if it would result in a tax levy that exceeds the cap, there is a question as to whether the primary budget proposition would likewise require a 60 percent approval in such a scenario. According to the guidance from the State Education Department, it would. It is possible that litigation could ensue over this issue. It may be significant that the legislation specifically includes the phrase “any proposition or propositions collectively” in addressing the need for a 60 percent approval if the cap should be exceeded. There certainly exists ambiguity in the law such that reasonable people could differ as to the intended result.

The guidance document issued by the State Education Department does not fully address another ambiguity that exists in the statute. Suppose a district asks voters to consider a main budget proposition that is under the cap and a separate budget proposition that would bring spending above the cap. What if the main budget passed by a simple majority but not a supermajority, and the separate budget resolution fails?
Does the main budget not pass?

Taxpayers could file appeals to the commissioner of education if they disagree with interpretations taken by school districts with respect to the need for a 60 percent voter approval of the main budget in situations in which separate propositions are on the ballot. There could also be disagreement with SED’s guidance document as well.

It is notable that the law permits citizens who gather enough signatures to place spending proposals
on the school ballot as separate initiatives, which would appear to be a way for groups of citizens to ensure that all school budget resolutions need 60 percent approval, even if school boards ensure their proposals to the voters remain under the cap. This raises a question of legislative intent. Did the learned New York State legislators really intend to give community members the ability to manipulate the main budget proposition voting percentage requirement by submitting separate propositions that result in a collective budget that exceeds the cap?

Do school boards have any way to protect themselves from such manipulation of the budget approval process? If a board anticipates a legal challenge to budget passage by a simple majority, it can seek clarification of the law by requesting declaratory judgment relief from a court. Additional legislation may be required to clarify statutory language that has created uncertainty.

Members of the New York State Association of School Attorneys represent school boards and BOCES. This article was written by Chris Venator and Neil M. Block of Ingerman Smith LLP, a law firm with locations in Hauppauge and Harrison, N.Y.

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