Tax Cap Information
Cuomo proposal would set zero percent tax cap for schools
January 31, 2011 - Blog excerpt from Robert Lowry, Deputy Director of the NY State Council of School Superintendents (NYSCOSS)
CLICK HERE for the Governor's Property Tax Cap Bill.
Late on Friday, the Senate Republicans introduced a bill submitted by Governor
Cuomo to impose a property tax cap on schools and local governments. The Senate
passed the bill on January 31 by a vote of 45-17.
The bill would limit school tax levy increases to the lesser of 2 percent or the
change in national Consumer Price Index over the calendar year preceding the
start of the school year, unless 60 percent of voters support over-riding the
cap to approve a greater increase. If voters do not approve their district’s
proposal, its tax levy would be capped at the prior year amount — a cap of zero,
not 2 percent.
The bill sets up scenarios for actual approval of tax levy increases as follows:
* If a district proposes a levy increase below the cap, the increase will be approved if more than 50 percent of voters vote in favor.
* If the district proposes an increase above the cap, then it is approved only if more than 60 percent of voters support it.
* If the increase is not approved by the necessary percentage, the levy is capped at the prior year level – a cap of zero.
As written, the bill requires districts to submit a second proposal if the first
is rejected.
The design essentially gives districts one lower-risk chance to obtain the over
60 percent vote to approve a levy increase above the cap.
If unsuccessful, the structure then steers them toward proposing an increase
below the cap in the second vote, which can gain approval with a simple majority
— 50 percent plus one vote. Seeking an increase above the cap a second time would again
require the 60 percent majority for approval, raising the risk of failure
and being hit with the zero cap.
No matter what increase a district proposes, if unsuccessful at gaining
voter approval, its tax levy would be capped at the prior year’s level — the cap
of zero percent.
The bill provides for one exemption from the cap for school districts — for
capital expenditures - and would first apply to the tax levy for the 2012-13
school year.
The bill would also establish a tax cap for local governments, excluding New
York City. To adopt a tax levy increase above the cap, local governments would
be required to obtain support of a two-thirds vote by the members of its
governing board, followed by voter approval in a referendum.
Without voter approval, local governments would be permitted to raise their tax
levy by up to the cap amount.
Local governments would also have one more exemption from the cap than school
districts — for “large
legal settlements of a tort action.”