BC News

June 28, 2011

Property tax cap changes school budget landscape in New York

New York State has a property tax cap.

Adopted by the Legislature in late June in a flurry of end-of-session activity, the measure seeks to limit the annual increase in the tax levies of local governments and school districts.

The legislation also included a package of items that legislators said was intended to offer districts some “mandate relief,” referring to state laws and regulations that drive up costs — and ultimately taxes.

Related link: Summary of tax cap law & BC context

Though much-publicized, the “lesser of 2 percent or the rate of inflation” is only one factor contributing to a district’s cap, or "tax levy limit." In fact, there are eight different steps to the calculation outlined in the legislation, plus certain costs that are exempt from the limit. As such, many districts may propose tax levy increases above the 2 percent threshold and still be within their “cap.”

Voters will still decide on school budgets in New York.

A ditrict's cap -- or its "tax levy limit" -- actually refers to the figure that determines what level of voter support is needed for a school budget to pass. If the tax levy increase is above the cap (or limit), the support of a supermajority (60 percent) of voters would be required for budget passage. If it is within the cap, a simple majority is needed for budget approval.

"We are still gathering details about the property tax cap and what it means for Bethlehem," Superintendent Michael Tebbano said. "This will certainly be a major factor in the coming years, and could force more difficult decisions like what we have seen in the last few budget cycles.”

“At the same time,” the superintendent added, “our first glance at the new law indicates that that our basic approach to budget development won’t change: We will make every effort to fund a high-quality program while limiting tax increases to only what is necessary to do so.”

Dr. Tebbano stressed that the district did not yet have full details about the legislation from the state. But, he said that given the high-profile nature of the issue, the district wanted to provide the community an overview of the information that is available. Click here for that summary.


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