In this first year of New York’s property tax cap, information about its provisions and implementation continues to evolve. This publication answers some questions that parents, taxpayers and school staff members may have, based on what is known as of this printing. School districts continue to await further clarification from the Office of the State Comptroller, Department of Taxation and Finance, State Education Department, Division of the Budget and the Governor’s office. As additional details become available, your school district will share them with the public.
- Our district supports property tax relief. New York has some of the highest property taxes in the country. We understand property owners’ desires for to keep a lid on tax increases.
- New York’s elected officials have not yet provided schools with meaningful solutions to address the biggest cost drivers in our budget. So although we may be restricted as to how much revenue we can raise through taxes, our expenses will continue to increase significantly.
- We need to hear from our community to help guide us through these difficult decisions. Please get involved – call, write, send an e-mail, or attend a meeting. If you’ve never gotten involved in the district’s budget process before, this is the year to do so.
- There will still be a community vote on the budget. Our goal will be to find the right balance between what our community can support and the cost of providing every student with the highest quality education.
- The new law has been referred to as a “2 percent tax cap,” but the law itself does not limit how much the tax levy can actually increase under a proposed budget. The law does, however, require at least 60 percent voter approval for a school budget if the proposed levy increase exceeds a certain amount.
- That amount, called the “tax levy limit,” will be calculated by each district according to a formula outlined in the law. However, by law, the tax levy limit does not include any taxes we would levy to pay for expenditures related to certain “exempt” items, including some court orders, some pension costs and local capital expenditures.
- A proposed budget that carries a tax levy (before exemptions) at or below the levy “limit” will require approval by a simple majority. If the tax levy (before exemptions) is above the levy “limit,” a supermajority (60 percent or more of voters) is what is needed for approval.
- Although we have the option to exceed the “tax levy limit,” we are well aware that any proposed school tax levy increase will be benchmarked against our levy “limit,” adding to the pressures we are under to control taxes even in the face of escalating costs and expectations for teaching and learning.
- Obtaining our community’s support for our budget proposal—whatever level of voter approval is required—is more critical than ever, given the law’s new contingent budget restrictions. If a district fails to gain voter approval and must adopt a contingent budget, then the levy increase is truly “capped.” Under a contingent budget, there can be NO increase in the tax levy. At this time, it is unclear whether the exemptions would still apply.
- The tax cap law does not cap an individual’s school tax bill. The law applies solely to the school tax levy. Increases in individual tax bills are often different from increases in the tax levy due to a variety of factors outside a school district’s control, and this will continue to be true.
- Property taxes and state aid are the two biggest sources of revenue that fund our educational programs. State aid has been reduced the last two years.
- Every year, we balance spending with available revenues. Over the last few years, we have taken a closer look than ever before at how to control expenses, and we will continue to.
- Meaningful relief from state and federal mandates and regulations could also help control costs. Other changes requiring state action, such as more regional approaches to expenses such as health insurance, would also help. So far, state officials have neither provided significant mandate relief nor facilitated any significant systemic changes to help school districts rein in costs.
- Until they do, it would be misleading to suggest that there are easy ways to cut costs to the extent that may be required in the years ahead without affecting programs that really matter to children.
- As with any new and complex education legislation, we expect our understanding of this to evolve as it is implemented. We will do our best to keep you informed. Please stay tuned and stay involved.