Everywhere you look it seems everyone is discussing school budgets and taxes. Money is tight and everyone is feeling it. Things only get more frustrating when people are not explained the reasons behind rises in taxes or budget cuts.
Although the community has shown up for school board meetings and asked questions during open forum, the Nanuet Schools Superintendent Mark McNeill made sure to reach all district residents by attending the April 8 Nanuet Civic Association meeting to answer questions and explain the situation with the Nanuet School District.
Pfizer, a global pharmaceutical company with a research facility in the Nanuet School District, was a huge taxpayer for the Nanuet School District and covered a great portion of the yearly expenses. On the day of the Nanuet School District budget vote, Pfizer announced that they were downsizing their operations, explained McNeill.
Pfizer also challenged its property taxes for school semesters 2006-07 through 2010-11 in court.
The Nanuet School Board, Town of Orangetown, and Pfizer met Jan. 24, 28, and Feb. 14 to discuss and negotiate.
Pfizer agrees to withdraw its petitions for tax certiorari on property taxes for each of the past five years
At the end of the five years, the agreement will eliminate the district’s exposure to liability of $50 - 70 million and the Town of Orangetown’s liability for $20-25 million in court-ordered refunds.
Pfizer agrees to limit development of 200+ acres of undeveloped land to either commercial or over-55 adult housing, both of which will have minimal impact on future school district budgets and tax levies. The land in question includes Pfizer’s property bordering Convent road in the Town of Clarkstown.
The Nanuet School District agrees that Pfizer’s property taxes for each of the next five years will be $10,450,000, which represents a 45 percent reduction from $19,000,000.
Using the 2010-11 figures, Pfizer’s contribution to the District’s Tax Levy changes from about 38 percent to 19 percent.
Also, the Town of Orangetown agrees that Pfizer’sproperty taxes for each of the next five years will be $3,960,000, which represents a 45 percent reduction from $7,200,000
For the school semesters of 2011-12, Pfizer will pay $10.45 million in taxes each year for five years, 45 percent less than in previous years. Superintendent McNeill stressed that if brought to court, Nanuet School District would have had to issue bonds for $50 million to $70 million to pay back Pfizer.
Unfortunately, New York school taxes are covered by property taxes, which leaves the homeowners and businesses of Nanuet to pick up the slack and cover the $8.55 gap left by Pfizer, said McNeill
Pfizer owns 200+ acres of land. As part of the contract, Pfizer agreed to limit the development of their land to either commercial or over 55+ senior housing, which will have a minimal impact on future school budgets.
With less taxes, Pfizer should be able to rent out the state of the art facilities they are not currently using due to their downsizing so that, when the contract is reassessed in five years, Nanuet will get even more taxes from the property. Also, reducing the taxes means that utilizing the facilities will be more economically viable and potentially sustain tax revenue generated from the site’s existing structures.
To ease the burden on taxpayers, Nanuet School District pledged to maintain a 0% tax levy increase in 2011-12. Furthermore, McNeill stated that the Nanuet Mall might start to bring in more property taxes in the years to come, easing the burden on taxpayers even more.
Nanuet currently receives less state aid than other most other districts in the county. This is because state aid is determined by property tax and income tax.
Although most families in Nanuet are dual-income families, according to property taxes, Nanuet is wealthy. This unbalances the equation and doesn't show a true picture of the state of Nanuet.
State aid may increase because of the decreased amount of taxes Pfizer pays, said McNeill.
School semesters 2011-12 is the fourth year Nanuet School District had to cut teacher positions due to budget issues.
“Enrollment is the same but we are less 18 teachers,” explained Superintendent McNeill. “We're trying to just hold on and hold this levy way down. We're holding expenditures down. We don't want to give people the wrong impression. Tax rates are going up but there's nothing there that's due to extra spending.”
Q&A between Superintendent McNeill and Public
Q: Concerning the space that they vacated. If they want to have commercial brokers rent it out, is it realistic to expect other drug companies to use the same facilities given the corporate tax rate that the United States has and the cheap labor that's overseas? I'm less than confident in their ability to rent out that space over the next five years to anybody.
A: This is what I know. The team representing Nanuet School District that took part in negotiations, what we heard is that the agreement—now I'm not an expert, I have no background in negotiations in large companies—but the agreement is such that if we were to go to court there would be greater exposure. In North Rockland, they have to pay back bonds in past years, let alone future reduction assessments.
What Pfizer was saying in their rationalizing of their demands is, right now, it's a little under $10 a square foot—the taxes divided by the square footage. It would be laid on any company who came in and wanted to rent out a building. They compared the square footage to Cambridge, Mass and Manhattan, which was about $7. Now it's about $5. They're basically saying with this agreement that Pfizer is in the ballpark for being able to attract companies.
Q: Is there a difference between the residential and the business rate?
A: The Board of Education passes a law called the homestead / non-homestead law. I believe that first came into affect in the 80's, maybe the early 80's. By passing the law, what it means is that when the calculations of tax rates are done, there is a bigger burden on the commercial than homeowner. It's not 50/50. (An audience member called out: "It's 63 percent / 37 percent. 320 million is residential and the non homestead is 193 million. So they make up 37 percent of the evaluation and they pay basically 67 percent premium to the residential.) I don't have the numbers, but there is that difference.
Q: I know you're prohibited from speaking about contract negotiations but personally the negotiations of contracts of teachers in this district is of importance to me. I am a New Jersey teacher and everyone knows that the contracts of teachers in Jersey are under attack, but I also feel like that the teachers throughout Nanuet have been very generously bestowed upon with benefits of all kinds, whether dental, health benefits. They have a very generous package.
I feel very strongly that if I'm biting the bullet in New Jersey and still have to pay taxes in Nanuet that the teachers in Nanuet should contribute more to benefits, to contribute more to reduce the burden. The salary cannot keep going up, up, up at high percentages. I'm asking you to hold the teacher's union in Nanuet accountable. I'd like to see you make other changes. I know you have special education teachers' aid mandated by the state, but where I work, we don't have teachers' aid and I feel like that's another area that there can be cuts. I know you have a tremendous amount of aid in Nanuet. Teachers can and will be held more responsible for what goes on in the classroom. I'm responsible for all the kids in my class and I have no aid. I don't want to see anyone lose their job but when my taxes are going up and we're in a critical situation.
We need to make serious cuts. It's not your fault but you're asking us to dig deeper in our pockets and there aren't enough cuts being made. You're trying to do it in the least painful way to the teachers at Nanuet, but unfortunately, they've got to bite the bullet. I feel very strongly that I'm getting reduced in my salary but you're telling me I have to pay more in my taxes. Something has to give.
A: I cannot comment on negotiations because we're at an impasse. Next year, I will remind the Civic Association to please come to the budget workshops, line by line, reads by reads. We have gotten rid of printers. We use copiers where everyone sends what they need to a copier. We don't send anything out copy-wise, but we've looked at toner. We're always looking for places to save. I invite people to come to the budget workshop and listen to the conversation, hear what the line is and what it was for the last four years. Figure out if there's another place we can save. We're in sync.
But, other than teachers, over the past four years, we have. We have cut custodial, we've cut teacher's assistants. There's 2 ½ teacher assistant positions being eliminated in this year's budget. Three years ago there were four or five assistants eliminated. We've eliminated clerical. We have. We decided to go the perimeter of the core instructional program but now we're inside the core instructional program. That's what so frustrating. We have this property wealth, we're looked at as wealthy, but it's getting very serious. We're doing everything we can, but again, come to the budget workshops and let us hear any suggestions you might have.
Public Response: I'm a teacher at Nanuet and I'm telling you, there's not a lot of fluff. We have one person who does all the copying for all the teachers. Maureen Rocco, her husband just got laid off. I pay 20 percent of my health benefits. I can assure you, there isn't anything extra.
Q: New Jersey (teachers) pays 100 percent of their health benefits. I'm a property owner and business owner. You're killing the golden goose. If you walk down Nanuet, a lot of people are hurting. Commercial property pays half the school bill. Look around, you see a lot of For Rent signs. Nanuet business and Commercial property pays 30 percent more than Clarkstown. I'm already paying $80 per $1000, I'd like to know what has the superintendent and the teachers have done to help the sacrifice.
A: There are a lot of variables in the formula, which complicates things. The Board of Education resolution—they do it every year—the idea that's presented with the passing of that is that, it's purposely to shift a bigger burden. What I'm hearing is that you're saying it's a 30 percent bigger burden in a commercial owner in Nanuet than it is in the Clarkstown School District. I never knew that. I'll look into that.
Towards the end of the meeting, one of the attendees finished with this thought:
“With the increase over the next five years, we will be picking up a disproportional share because Pfizer won't be sharing in the increases. By the time we get out in 5 years, we're going to be 50 percent more than Clarkstown. Now, I love Nanuet. I got two kids in the school. I love the school, I love the teachers, but I have a hard time at the end of the day justifying paying 50 percent more to send my kid to Nanuet than to change the sign over the door to Clarkstown. And if we don't look at what's going on, our teachers are going to face great disruption when another school comes to take it over. I don't think they have a real grasp at the true financial situation at any level of the union and realize that there's a good chance in the next few years that we're going to have a consolidation between the schools because we're not paying 50 percent more to go to a school.”
Revisit other Patch articles about Pfizer and their settlement: