Press-Republican

Education

August 15, 2013

Lower state tax-levy cap concerns officials

PLATTSBURGH — A lower state tax-levy cap is expected to make budgeting for municipalities and school districts more difficult.

“This is not good news,” City of Plattsburgh Mayor Donald Kasprzak said.

“The process is difficult enough without the added changes this tax cap presents.”

The cap, approved by the State Legislature in 2011, puts a limit on property-tax-levy increases of no more than 2 percent or the rate of inflation, whichever is lower.

This week, the Office of State Comptroller Thomas Dinapoli set a new rate of 1.66 percent for 2014 for municipalities, based on a decline in inflation. 

A new rate will be set for school districts for the 2014-15 school year next January, but it is not expected to be much different than the 1.66 percent, according to several published reports.

The cap is also affected by several other factors in a complex formula, which could make it higher than 2 percent or the rate of inflation.

OVERRIDE RULES

According to New York State’s Property Tax Cap, a Citizen’s Guide, the other elements to the cap include growth factor, which is new construction within a taxing jurisdiction; tort settlements or awards whose costs exceed 5 percent of the tax levy; capital costs (including debt service) for school districts; pension contribution increases that exceed 2 percentage points of covered payroll; and a carryover of up to 1.5 percent of unused tax-levy growth to the following year.

A municipality can exceed the cap limit if at least 60 percent of the members of its governing body vote in favor of a local law overriding the cap.

School districts can only override the cap if at least a supermajority of 60 percent of district residents vote for it in the annual budget vote held each May.

‘NEED MANDATE RELIEF’

Based on the formula, the maximum cap for Clinton County for 2013 was 3.2 percent. Legislators approved a budget that featured a tax-levy increase of 1.9 percent, well below the limit.

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