Oct. 20, 2011—For many years, New Yorkers have paid some of the highest property taxes in the country, spurring individuals and business owners to increasingly clamor for tax relief.

In this first year of New York’s property tax levy cap, details about its provisions and implementation continue to evolve. To provide some clarification, Capital Region BOCES, in partnership with Questar III BOCES, has released the publication "Understanding New York's Property Tax Levy Cap As It Relates To Public Schools." Download a copy (PDF)

This summer, state leaders responded by enacting a law that places new restrictions on how school districts may increase their tax levies.

“There is currently a lot of misinformation circulating about the impact of this new law on individual school districts and homeowners,” said Superintendent Dr. Valerie Kelsey.

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.

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 based on a formula outlined in the law and will vary by district.

Just because a district can legally exceed its tax levy limit does not mean it will, though.

“We will continue to be mindful of the district’s mission to provide a quality education for all students while recognizing the economic challenges facing our district and taxpayers,” said Kelsey. “Living within the realities of the new law—while mandated costs escalate and the pressure to control taxes continues—will likely force difficult decisions again this year."

To that end, Kelsey is projected that next year will be another challenging budget year for Schalmont schools.

District officials await further clarification
In this first year of the property tax levy cap legislation, information about its provisions and implementation continues  to evolve.

District officials continue to await further clarification from the New York State Office of the State Comptroller, Department of Taxation and Finance, Education Department, Division of
the Budget and the governor’s office.

In the meantime, please take some time to read the answers to some questions that parents, taxpayers and school staff may have, based on what is known right now.

• Does the new tax cap law mean school tax levies can’t increase by more than 2 percent?
  No, the law does not prohibit tax levy increases greater than 2 percent. Despite how it’s been described by some politicians and the media, the legislation signed into law in June requires every district to calculate its own “tax levy limit.” Two percent (or the rate of inflation,
  if less) is just one of eight factors in this calculation. The law also establishes a higher threshold of voter approval for a budget to pass if that district’s proposed tax levy increase (before exemptions outlined in the law) exceeds its individual “tax levy limit.”

• What is a “tax levy limit?”
  For school districts, the “tax levy limit” is the highest allowable tax levy (before exemptions) that a school district can propose as part of its annual budget for which only the approval of a simple majority of voters (more than 50 percent) is required. Any proposed tax levy amount above this limit will require budget approval by a supermajority (60 percent or more) of voters.

• How is the “tax levy limit” determined for school districts?
  The law dictates an eight-step formula that each school district must use to calculate its individual “tax levy limit.” In particular, the calculation adjusts a district’s tax levy to reflect growth in the local tax base (if any) and the rate of inflation or 2 percent (whichever is lower).

• What happens if the budget is not approved by voters?
  If a proposed budget is defeated by voters, a school district—as in the past—has the option of putting the same or a revised budget up for a revote, or adopting a contingent budget. A
  school district that adopts a contingent budget may not increase its current tax levy by any amount—which would mean, in effect, a zero percent increase.

Learn more by reading an informational brochure (PDF) produced by Capital Region BOCES and Questar III BOCES. 

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