New York State presently limits the amount a local government (County, City, Town, Village, Special District, Public School, and Public Library) can raise the Tax Levy between two budgets. The limit is known as the “2 Percent Tax Cap.” If the taxing entity proposes a budget that is more than their Tax Cap, it can only pass if it is approved by a 60 per cent ‘“Super Majority” approval rate.
In governments where an elected board approves the budget (Counties, Cities, Towns, and Villages) the Super Majority applies to the Board Members. On the seven member Penn Yan Village Board, we need to have five members approving a budget that is over the Tax Cap. On a five member Town Board you will need three affirmative votes. The 14 member Yates County Legislature needs to have nine affirmative votes.
School districts and Public Libraries have their budgets approved in a public vote. They need to have 60 percent affirmative votes of those who vote to have the budget approved.
Last Tuesday, May 19, Public Schools over New York State held their budget referendums. Eighteen schools districts presented budgets that exceeded their tax cap. Two were nearby school districts, Geneva and Dundee, were ones that proposed school budgets that needed a Super Majority to pass. Dundee’s budget succeeded (161-100); Geneva’s budget failed by 24 votes (676-490).
Looking at the facts tells us a lot about the Tax Cap law. Although commonly known as “2 percent Tax Cap”, it is seldom two percent. There is a complicated formula to determine each district’s Tax Cap. Geneva’s proposed Tax Levy was a 1.95 percent increase. Their actual Tax Cap was 0.34 percent! Dundee’s proposed Tax Levy was a 3.9 percent increase. It’s actual Tax Cap, according the the State’s formula, was a NEGATIVE 4.3 percent! (Yes, you read it right.) Dundee’s voters approved a budget that exceeded their Tax Levy by 8.2 percent!
There were 18 school districts whose budgets were over their Tax Cap, and 11 districts were successful in having their voters approved a budget override. The unsuccessful seven districts were Chazy and Northeastern Clinton in Clinton County, Parishville-Hopkinton in St. Lawrence County, Herkimer (Herkimer County in the Mohawk Valley) Patchogue-Medford (Long Island) and NY 23rd’s Geneva and Tioga Central Schools. Two school districts that needed a simple majority had failing budgets—Walton (Delaware) and NY 23rd’s Addison (Steuben).
Almost 99 percent of the 658 school districts passed their under the tax cap budgets. What did those schools have to do to stay under their cap? Did they cut staff? Did they move funds from reserve accounts? Did they delay replacing or upgrading equipment? Did they eliminate programs and/or extra-curricular activities? Priorities have to be made.
The Tax Cap Law expires next year, but the State Legislature may decide to extend it or have it die by the end of their legislative session on June 15. The Republican controlled State Senate passed a bill to indefinitely extend the bill as it now stands on Tuesday, 47-13. The Democrat controlled Assembly representatives are discussing changing it a bit as well as offering a bill that would reduce state-mandate spending.
There are those who are very supportive of extending the Tax Cap, who estimate that the Property Tax has saved New Yorkers $7.6 billion. On the other the New York State School Board Association pointed out:
“School boards already have a de facto “tax cap” in place every time their spending plans go up for a public vote. School boards and their leadership teams across the state have worked hard to balance taxpayer support with student need. Even before enactment of the tax cap in 2011, school district increased spending just 0.8 percent in 2011-12, 1.1 percent in 2010-11, and 2.3 percent in 2009-10. Those are very responsible numbers.
School decision-makers know the economic climate in their communities and put forth budgets that reflect that climate, along with the needs and wants of their communities. In fact, school boards have attempted fewer and fewer tax cap overrides that require a 60 percent supermajority for passage. In 2012, there were 51 attempts, followed by 31 in 2013 and 29 last year.”
Has the Tax Cap really made a financial deference? It looked like schools were acting on their own to respond to their district’s financial needs.
There are school officials who point out that the Tax Cap has limited funds at a same time New York State initiated the Gap Elimination Adjustment which reduced State Aid, and Common Core. Trying to master a new teaching system and standards while trying to provide our children with the best educational experience possible with less funding is a recipe for frustration. Some wonder if these changes are a way to promote Charter Schools.
Remember all local governments are covered by the Tax Cap law. The public doesn’t vote directly on their budgets. They are approved by the Board Members who create the budgets. Has anyone ever heard of a County or City or Town or Village Government Budget not pass? I found no figures on how many Board approved local governments budgets that were over the Tax Cap.
We would like to hear your comments on New York State’s Tax Cap. Should the present one be extended the way it is now? Should out be modified, if so how? Should it be eliminated all together? How has it affected your School District.