Cuomo Cap Proposal Would Allow Overrides

Property Tax WWNY


By Jude Seymour

Gov. Andrew Cuomo's property tax cap bill offers a local override option and allows frugal governments to carry over any percentage of spending they don't use into future fiscal years.

But the state's largest teacher's union is also claiming the bill will effectively allow no increases in the amount schools can take from taxpayers.

The bill, which will be debated in the Senate today, would require the increase in the levy, or amount to be raised by taxes, to be 2 percent or "one plus the inflation factor," whichever is less.

However, the proposed law also says that a local government can adopt a budget that include a tax levy increase higher than the limit if the two-thirds of the "governing body" - Boards of Trustees, Town Councils or County Legislatures - vote to allow it.

Schools will have a different standard. They'll need 60 percent of their district residents to OK a tax levy increase above the stated amount. 

That's problematic, according to Carl Korn, spokesman of the New York State United Teachers. In an analysis of the bill reported by Albany Times-Union's Jimmy Vielkind, Korn notes that the bill would force school districts to adopt budgets that do not increase the levy at all if voters twice defeat the levy proposed. He calls that a "0 percent tax cap without voter approval." (The bill doesn't suggest municipalities do the same.)

Korn also notes schools will not get helpful adjustements on the levy that take into account legal judgments, increased student enrollments, new construction, pension and health care costs.

The bill also includes a "carry over." A simple example: The state allows a village to increase its tax levy by 2 percent in 2012. But the village decides to raise it only by 1 percent, they can "carry over" that 1 percent to the next fiscal year. So, if the state decides the levy increase limit is again 2 percent in 2013, the village can hypothetically raise its levy 3 percent.

This may avoid what Brian McGrath, a Democratic candidate for the 122nd Assembly District, always worried may occur with the cap. If local governments know they can only raise their levies by 2 percent, they will do so - whether they need the money or not - so that they can be better prepared for a catastrophe. This provision seems to account for that logic.

The formula for a local government to determine how much it is allowed to raise the levy by is complicated. It must:

  • Take its tax levy from the prior fiscal year
  • Add all payments in lieu of taxes from prior year
  • Subtract any part of the levy that went toward capital expenses that voters approved
  • Subtract any part of the levy that went toward a large legal settlement in the prior year
  • Multiply the result by the growth factor that the state allows - again, 2 percent, or 1 plus inflation rate
  • Then substract any PILOTs coming in for the coming fiscal year
  • Add the carryover

The bill is 74 pages - and I'll admit I haven't read it all. But I noticed one more element that I want to share.

The bill allows that local governments sometimes make "clerical or technical errors." If one of those errors pushes the levy increase above the allowed amount, the government has to put the excess amount in a reserve and use that money to offset the levy in the ensuing fiscal year. Could this somehow be abused?

Monday, December 5, 2016
, Watertown, NY

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