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August 4, 2014

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Oct. 4, 2011

New York State property tax legislation overview

budget logo (c) dreamsfreeAt the end of June, the New York State Legislature enacted a property tax “cap” that seeks to limit the annual increase in the tax levies of local governments and school districts. The new legislation will affect district planning starting with the 2012-13 school budget.

Although the new law has been referred to as a “2 percent tax cap,” it does not, in fact, restrict any proposed tax levy increase to 2 percent. What it does is establish a tax levy limit (which will be determined by each district according to an eight-step, complex formula dictated by the law, and will vary by district) that determines the number of votes needed to pass a school budget.

As Cobleskill-Richmondville Central School District leaders continue to analyze the new legislation, Superintendent Lynn Macan is certain that 2012-13 will be another difficult budget year for the district.

“As the fiscal challenges continue in these hard economic times, we will strive to strike a balance between the needs of our students and the financial capacity of the community,” Macan said. “We are taking a pro-active approach by forming district committees featuring community members who will work together with C-RCS staff and Board of Education members to identify creative alternatives. Additionally, the 2012-13 budget development process essentially began when the current tax rates were set. We will be meeting earlier than ever before with interested groups both within the district and throughout the community to inform them of the continued poor financial standing of the state, and the bleak picture it paints for seeing the same amount of aid received for the 2011-12 school year. We will need this community to mobilize for continuous communication with our legislators, informing them of the negative impacts of the 2011 state budget upon our students, and what additional cuts will do to further harm the opportunities for the students of the Cobleskill-Richmondville Central School District.”

A summary of the property tax “cap” law:

• While the law is being advertised as a “2 percent cap” on annual property tax levy increases, several provisions dictate that the actual tax levy limit may vary from that figure. This is in part due to a series of costs that are exempt from the limit.

• Each district will calculate its own “tax levy limit” based on a state formula, which will be the figure that determines what level of voter support is needed for a school budget to pass. If the tax levy increase is above that limit, the support of a supermajority (60 percent) of voters would be required for budget passage. If it is within the limit, a simple majority (more than 50 percent) is needed for budget approval.

• Voters will still decide on school budgets. Voting on the 2012-13 school year budget will be held on May 15, 2012.

• School districts can hold up to two budget votes under current law. If both budget proposals are defeated, districts would be held to the same tax levy as the previous year, irrespective of increases in health care costs, contractual expenses or student enrollment.

• If a local district’s budget is under the tax levy limit, the difference between the requested amount and the limit amount can be carried over to the next year. For example, if the limit for year A was calculated out to 2 percent and C-RCS’s budget called for a 1.5 percent tax levy, then in the following year B, C-RCS could add the “unused” .5 percent to its calculated tax levy limit without needing a 60 percent voter approval rate.

Looking ahead

After what was a challenging budget development process, the C-RCS Board of Education adopted a proposed 2011-12 district budget in April totaling $34,168,511. The budget represents a 5.3 percent spending decrease from the 2010-11 school year and included $1,914,095 in budget reductions and program adjustments.

This included the elimination of 32.15 FTE positions. Residents approved the 2011-12 budget on May 17 with a vote of 1,493 to 852.

C-RCS is already bracing for another difficult development process for the 2012-13 school year budget. In addition to the state's new tax cap, the Federal Education Jobs Funds aid — a federal grant that totals more than $892,922 — will expire in 2011-12 and state funding for education could again be reduced in the next New York State budget.

“With the elimination of federal jobs aid and any reduction in state aid, the implementation of a tax cap is a game changer,” Macan said. “It would completely alter how we run our school and what services we can offer our students. We must examine how to best use every resource to its fullest potential and look for creative solutions to bridge the gaps we will most certainly face in the upcoming budget season.”

As always, parents, staff, students and taxpayers are urged to voice their opinions on these matters to our elected leaders. Click here for elected leaders' contact information.

Return to the Tax Levy Limit Information page