Decision No. 13,583

(March 22, 1996)

Donald Brenner, Esq., attorney for petitioners

MILLS, Commissioner.--Petitioners bring three separate appeals challenging the decisions of the South Orangetown Central School District, the Clarkstown Central School District and the determination by District Superintendent Dr. A. Glen Everhart to alter the school districts' boundaries. Because the appeals involve similar issues of law and fact, they are consolidated for decision. The appeals must be dismissed.

Petitioners are the owners of several parcels of property located within the boundaries of respondent school districts which have been designated as non-homestead property under Article 19 of the Real Property Tax Law ("RPTL"). On February 6, 1995 respondent South Orangetown passed a resolution transferring sixteen properties located in the Town of Clarkstown from respondent South Orangetown CSD to respondent Clarkstown CSD. Of the properties transferred, eleven are utility properties, four are non-homestead properties and one is a homestead property. At the time of the transfer, no children resided on any of these properties. As a result, no students changed school districts as a consequence of the property transfer. The value of the transferred property is approximately $3.5 million dollars. The 1994-95 taxes generated from these properties was $73,580. As a consequence of the property transfer, all properties in the South Orangetown CSD are now located within the Town of Orangetown.

On February 13, 1995, respondent Clarkstown CSD passed a resolution accepting the property transfer. On February 28, 1995 the District Superintendent, Dr. Everhart, entered an order, pursuant to Education Law '1507, altering the school district boundaries between respondent districts. The tax rate for non-homestead property in the South Orangetown CSD for the 1994-95 school year was 19.98%. The tax rate, after the property transfer, for the remaining non-homestead property in the South Orangetown CSD for the 1995-96 year is 29.69%. The tax rate for non-homestead property in the Clarkstown CSD for 1994-95 was 40.49%. The tax rate for non-homestead property in 1995-96 is 44.00%.

Petitioners contend that the property transfer was improper because it was done solely for economic reasons. Respondents contend that although economic considerations were a factor in the transfer, they were not the sole basis for that action, and that ultimately the students of both districts will benefit from the boundary change which resulted from the property transfer.

Under Education Law '1507, a district superintendent is authorized to alter school district boundaries with the consent of the boards of education involved. The record reflects that both boards of education involved in the property transfer consented to the boundary change. The only question remaining is whether I should overturn the district superintendent's determination to alter the boundary.

The factors to be considered in determining whether to alter school district boundaries are the educational interests of the students involved, the effect of the transfer on the tax revenues of the districts involved and the effect of the transfer on the educational programs of the school from which the property is transferred (Appeal of Michailides, 31 Ed Dept Rep 204; Appeal of Salerni, 27 id. 393; Appeal of McCord, 19 id. 509; Appeal of Schaeffer, 9 id. 57; Appeal of O'Connor, 4 id. 8). Since the record reflects that no students were transferred as a result of the property transfer, the educational interests of students is clearly not a basis upon which I can overturn the district superintendent's determination. Moreover, nothing in the record indicates that the educational interests of students in either school district will be compromised in any way as a result of the transfer.

The remaining factors to consider are the tax ramifications for the districts involved and the effect of the transfer on the educational programs of the school from which the property was transferred. In an appeal before the Commissioner of Education, the petitioner has the burden to establish the facts upon which he seeks relief (8 NYCRR 275.10; Appeal of Haff, 35 Ed Dept Rep 130; Appeals of Parrish, 32 id. 261; Application of Sabuda, 31 id. 461; Application of Verity, 31 id. 485; Appeal of Singh, 30 id. 284). Petitioners have failed to supply me with anything more than conclusory allegations and speculation that the programs and services to the students of respondent South Orangetown would be compromised by this property transfer. The record reflects that although respondent South Orangetown would lose a small amount of tax revenue as a result of the property transfer, programs and services to the students were not expected to be compromised or even modified in any way. Accordingly, because there is no evidence that the transfer has negatively impacted upon the programs of the district from which the property was transferred, this cannot be a basis to overturn the district superintendent's determination.

Petitioners assert that the transfer must be overturned because it has a negative tax impact on respondent South Orangetown school district. It is clear from the record that respondent South Orangetown lost $73,580 out of $27,116,780 in tax revenues as a result of the property transfer. This is .25 of one percent of the district's total tax revenues. The property transfer also resulted in significant changes in the formulas used by the district in calculating its tax levy.

Prior to the property transfer, respondent South Orangetown school district was a split tax district. A split tax district is a school district located in more than one city or town. Under RPTL '1903-a, the governing body of a school district which is a split tax district is authorized to established separate tax rates for homestead and non-homestead property within the district. Respondent South Orangetown had adopted this system of differential tax rates. As a result, respondent South Orangetown was required to calculate separate class tax rates for homestead and non-homestead properties within the district (RPTL '1903-a(4)). The practical effect of this requirement was that the apportionment of taxes between the homestead and non-homestead classes was based upon the proportion of taxes that those classes paid prior to a revaluation. Consequently, prior to the property transfer, the non-homestead class taxpayers of the South Orangetown school district paid approximately 35% of the district's taxes while taxpayers of the homestead class bore approximately 65% of the district's tax burden.

Upon the property transfer from respondent South Orangetown school district to respondent Clarkstown school district, respondent South Orangetown school district was wholly located within the Town of Orangetown. Because respondent South Orangetown was no longer a split tax district, it was able to calculate its tax rates using RPTL '1903 instead of '1903-a. This change enabled the district to lower the tax rate for homestead properties while increasing the tax rate for non-homestead properties. Respondent South Orangetown contends that the small loss of tax revenue resulting from the property transfer is overshadowed by the district's enhanced ability to set reasonable tax rates for its residents and consequently to pass school budgets, thereby providing better programming for its students.

It is clear that the tax rate for non-homestead property owners whose property was transferred to respondent Clarkstown school district were subject to a higher tax rate in that district. However, petitioners' reliance upon prior Commissioner's decisions to support their argument that the transfer of property must be overturned because it was done solely for economic reasons is misplaced. This is a case of first impression. There are no prior Commissioner's decisions which address the transfer of property between two school districts, without the transfer of any students, for the purpose of achieving what both districts perceive as economic and programmatic benefits.

In this case, as compared to the cases upon which petitioners rely, there are no students directly involved. Petitioners' specific reliance upon Appeal from the Order of the District Superintendent of the First Supervisory District of Albany County, 37 St Dept Rep 283, to support their position is also misplaced. In Appeal from the Order of the District Superintendent, supra, the Commissioner held that boundaries could not be altered solely to equalize tax rates between two school districts. In this case, the record is devoid of any evidence demonstrating that the purpose of the transfer was to equalize tax rates between respondent school districts. Instead, this case turns on a determination by respondent South Orangetown to use a different method of calculating tax rates within its own district. Moreover, in Appeal from the Order of the Superintendent, supra, the Commissioner also based his decision on the interests of students potentially involved in the boundary alteration.

Although petitioners perceive the tax ramifications of this property transfer negatively, respondents' considerations must necessarily be broader than petitioners' individual concerns. Respondents are obliged to examine community considerations and the long term educational interests of the students involved (Appeal of Michailides, supra). Clearly an addition of property worth approximately $3.5 million dollars will ultimately benefit respondent Clarkstown school district by increasing its revenues. Additionally, although respondent South Orangetown initially stood to lose $73,580 in tax revenues, this loss of less than one percent of its tax revenues provides the district with the ability to calculate future tax rates in a way which it perceives to be more favorable for the community as a whole. Furthermore, respondent South Orangetown has determined that the long term positive impact on district homeowners resulting from this change will ultimately translate into increased support for school district programs and services which will benefit the students of the district. Respondent South Orangetown's articulation of this benefit indicates that it has adequately evaluated competing community concerns in consenting to this property transfer. Accordingly, I am satisfied that the two districts involved in this appeal have made a reasonable decision based upon community considerations and the long term educational interests of the students involved. In view of these factors, the proposed change appears to be in the long term educational interests of the residents of the areas affected.

THE APPEALS ARE DISMISSED.

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