School and villages will be squeezed even further by the property-tax cap next year.
The tax cap for schools and villages will be between 1.42 percent and 1.55 percent – down from 2 percent this year, the state Comptroller’s Office confirmed to Gannett’s Albany Bureau today.
The tax cap is calculated every year by the Comptroller’s Office based on rate-of-inflation projections from the state Budget Division. The cap is either 2 percent or the rate of inflation, whichever is lower.
The tax cap for counties and towns in January is 1.6 percent, but it will adjusted for villages and schools in mid-January, said Brian Butry, a spokesman for the Comptroller’s Office.
Prior to 2014, the cap had been 2 percent each year, but the cap is different for each entity because there are some costs that are exempt — such as some pension costs.
The lower cap will make it more difficult for schools and villages to raise revenue to pay for growing costs, local officials said. Village budgets are approved in March; school budgets are approved in May for a fiscal year that starts July 1.
“It would make it increasingly difficult for schools to provide the programs and services they need without a massive infusion of new state aid,” said Carl Korn, spokesman for the New York State United Teachers union, which is suing the state to toss the tax cap.
The tax cap was implemented in 2011 by Gov. Andrew Cuomo and the Legislature to address New York’s property taxes, which is among the highest in the nation.
This year, 98 percent of schools and 77 percent of local governments stayed under cap.
Local governments and schools can override the cap with a 60 percent vote — for schools, it’s 60 percent of the public vote; for municipalities is 60 percent of the governing board.
NYSUT’s lawsuit, which was heard Thursday in state Supreme Court in Albany, contends that schools have a higher bar to override the cap, and the supermajority needed is unconstitutional. Towns have five-member boards, so a 60 percent vote only requires a simple majority of three votes.
For schools, if a budget fails twice, the district can’t increase property taxes that year.
Cuomo is proposing a two-year freeze on property taxes if schools and local governments stay under the tax cap. The state would spend about $1 billion to fund the tax breaks, and in year two, residents would get the tax freeze if their municipalities and schools move toward consolidating services.
In a report Friday, union-backed groups ripped the proposal.
“This proposal adds perverse incentives to the pressure that the cap’s rules already put on local governments,” the report said.