New York’s new property tax cap has numerous loopholes for school districts and local governments

  Published on December 1st, 2011

Andre Claridge of PC Public Affairs, NYSBCA’s government relations consultant,  highlights the tax cap and some of its loopholes, “As we have seen over the years, new laws coming out of Albany aren’t always as they seem.  This statement rings true with New York’s new two percent property tax cap.”

The tax cap has been touted by politicians in Albany as the solution to keeping property taxes low in New York State.  It has also been used as an excuse by some school districts as a reason why they need to cut back on student transportation.  The following information highlights the law, some of its loopholes and sheds some light on how school districts will conform to the new law:

• Beginning with the fiscal year that starts in 2012, no school district, except “The Big Five,” would be authorized to increase its property tax levy by more than 2 percent or the rate of inflation, whichever is less.

• School districts have the ability to present a budget that increases its tax levy by more than 2%; however, it must be voted on and pass with at least 60 percent of the votes cast (plurality).

• The Tax Cap applies to most school districts and local governments i.e., (counties, towns, villages and special districts) and is set at the rate of inflation or 2 percent, whichever is less.

• The property tax levy limit for school districts does not apply to school districts with a population of 125,000 or more (“The Big 5″ school districts).

• To preserve local control, the plan empowers residents to go over the cap with a 60 percent majority vote for school districts and 60 percent of the local governing body for local governments when they believe it is in the best interest of the school district or community.

• School bus services continue even if a school budget fails.

• If the budget is defeated after two presentations to the voters, or  after one defeat where the school district decides not to resubmit a budget to the voters, then the district would be required to adopt a budget with a tax levy less than or equal to that of the prior year.

“With a recent survey of New York’s school superintendents revealing that nearly 70 percent of the superintendents felt that the new 2% tax cap would have no negative impact on pupil transportation services, it will be interesting to see how school districts address the two percent cap in the context of their budgets,” Claridge commented.

“We worked hard to ensure that transportation funding was protected in this year’s budget, Claridge continued.  “During the year the state instituted the property tax cap, state pupil transportation funding increased by more than $70 million or 4.5% for a total of $1.655 billion.  We’ll continue to communicate the Association’s support for policies that promote the safest, most reliable and efficient pupil transportation services in the country.”

Andre Claridge is the Managing Partner at PC Public Affairs and responsible for the New York School Bus Contractors Association’s Government Affairs and Lobbying efforts ensuring pupil transportation contractors’ voices are heard and interest are protected on the Hill in Albany.