 The
phrase “2 percent property tax cap” is misleading.
Although the new law is repeatedly referred
to as a “2 percent tax cap,” it does not restrict any
proposed tax levy increase to 2 percent, nor does it
prohibit individuals’ property taxes from increasing more
than 2 percent.
The law applies to the school district tax
levy, not tax rates or the individual tax bill of residents.
It doesn’t place any restrictions on how tax bills are
calculated.
The tax levy cap is simply a formula put in
place by the state to limit how much a school district can
raise its annual tax levy without requiring a super majority
approval from its voters.
For the purpose of a tax increase, super
majority in New York is defined as three-fifths of the vote,
or 60 percent. A school district's proposed budget that does
not exceed its calculated tax levy limit would require a
simple majority vote.
A complex, eight-step formula The tax levy limit
will be determined by each district according to a complex,
eight-step formula defined by the law, and the limit will vary
by district. In addition, the formula for
setting the tax levy limit allows for certain expenses — such as
capital local expenditures, certain pension payments, and
certain court orders/judgments — to be exempt from the cap. As a
result, a district’s final tax levy after exemptions are
calculated in could be greater than its published “tax levy
limit” and yet still be considered—under the law—within the
limit. If the tax levy (before state-approved
exemptions) is at or below the “tax levy limit,” a simple
majority (more than 50 percent) is needed for budget
approval. If the tax levy (before exemptions) exceeds a
district’s “tax levy limit,” the support of a supermajority (60
percent or more) of voters is required for budget passage.
Voters will still decide on school district spending plans on
the third Tuesday of May each year.
Tax bills will continue to be calculated by
using a property’s assessed value (as determined by the
local town assessor) and the tax rate — or the amount paid
in taxes per $1,000 of assessed value. Tax rates are not
solely determined by the tax levy approved by voters; they
are often adjusted by the state using equalization rates,
designed to equally distribute the tax burden across
municipalities within a district. Tax bills can also be
affected by STAR or other exemptions for which individual
taxpayers may qualify.
As always, parents, staff, students and
taxpayers are urged to voice their opinions on these matters
to our elected leaders. Click here for elected leaders'
contact information.
Next:
The three tax levy numbers During the
process to develop a school budget, taxpayers will hear three
different numbers: the tax levy limit, the maximum allowable
levy, and the proposed tax levy. Find out what each number
represents.
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