Schools and municipalities deal with lower 2014 tax cap

“Two percent cap” actually changes yearly

BY KATHY KAHN

There’s more to the two percent tax cap than meets the eye.

Introduced in 2011 and put into law in April, 2012, the two percent tax cap’s purpose was to keep school districts and local taxing jurisdictions’ budget levies limited to the lesser of two percent or the Consumer Price Index (CPI). The cap applies to every taxing jurisdiction outside of New York City and can be overridden by a supermajority of a jurisdiction’s council or board.

The “two percent cap” is something of a misnomer, as the law allows for it to change annually due to a complex formula. In 2014, the tax cap for villages is 1.48 percent; for counties, cities and towns, 1.66 percent; for school districts, 1.44 percent. According to Capital Region BOCES, in the 2012-13 budget cycle, “only five [school] districts had an actual calculated levy limit (including exclusions) of 2 percent, while 575 school districts had a limit greater than 2 percent and 91 had a limit less than 2 percent.”

The tax levy cap does not necessarily indicate whether individual tax rates will be higher or lower, as the loss of a commercial ratable can cause a spike in taxes without actual spending increasing.

According to the spokesman Brian Butry of the NYS Office of the Comptroller, local taxing jurisdictions unable to meet the percentage allocated to them may override the levy’s limit by first passing a local law (or by resolution in the case of a fire or other special district). It is then voted on by its legislature or local board immediately upon the passage of the local law.

Overrides allowed to the levy limits for 2014 include teachers’ salaries and benefits, capital improvements and court orders/judgments and accounts for many of the taxing jurisdictions inability to meet the threshold set for them by the state formula.

To add to the confusion, budget years vary: For New York State, the budget runs from April 1 through March 31; for counties, towns and fire districts, budgets begin on January 1 and end of December 31; villages can vary, some beginning June 1 and ending May 31, while others set their own date. School district budgets begin on July 1 and end on June 30. Perhaps all these taxing entities—from the state capital to the villages—would work more cohesively if were all on the same budget page.

While all are grappling with increasing taxes and diminishing services, some homeowners may see a tax rebate if their school district are under the 2014 cap. Please let The Rockland Times know if you are one of them.

Tuesday, May 20 is the date set for all school districts in New York State to vote for or against their budgets. Contact your local district to get an absentee ballot if you can’t vote in person.