Submitted by Larry Littlefield, Jan 28, 2008 10:48

The key proposal in the entire budget is to eliminate the STAR income tax credit for NYC residents earning more than $250,000. This will cut the city's share of back-door education funding under STAR, and probably its share of education funding as a whole. Meanwhile property tax benefits under STAR, which the city gets little of, decrease.

This shift was immediately denounced as unfavorable to suburban homeowners. The likely result is the elimination of STAR income tax credits entirely as fiscal problems intensify. That is the problem when the city receives one kind of aid, the "deserving" rest of the state another.

If denouced as a cut in school aid, the state could respond that is the elimination of a special tax deal. If called an increase in taxes, the rest of the state will say the city's "wasteful" school spending could be cut so its "efficient" school spending can be increased.

Pandering to those with an outsized sense of entitlement will never make them happy. I expect an outright cut in state education spending for New York City, combined with an increase for the rest of the state, once the real state budget is decided after the November elections. The result could be a NYC school shutdown in the Spring of 2009.

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