FREQUENTLY ASKED QUESTIONS
NEW YORK STATE PROPERTY TAX CAP LEGISLATION
What is the Property Tax Cap?
The Property Tax Cap was created by legislation passed in June that places new restrictions on how school districts (and municipalities) may increase their tax levies. Although the new law has been referred to as a “2 percent tax cap,” it does not in fact restrict any proposed tax levy increase to 2 percent.
The law does, however, require at least 60 percent voter approval for a school budget if the proposed levy increase exceeds a certain amount. That amount, called the “tax levy limit,” will be determined by each district according to a formula outlined in the law, and will vary by district.
Does the Property Tax Cap law limit the annual increase of my property taxes to less than 2 percent each year?
The tax cap law does not cap an individual’s school tax bill. Its requirements apply only to the total school tax levy. Increases in individual tax bills are often different than increases in the levy due to a variety of factors outside a school district’s control, and this will continue to be true.
Does the Property Tax Cap mean the total school tax levy will be limited to a 2 percent increase each year?
No. There are exceptions that may result in a tax levy increase greater than 2 percent. Some of those exceptions include district growth as a result of new construction, and legally mandated pension contributions. Ultimately, school districts will use a complex calculation involving eight different steps to come up with the tax levy limit.
What other sources of revenue can the district use to help keep the tax levy to a minimum?
Unfortunately, while we continue to look for alternative revenue sources like state and federal grants our district has limited opportunities to obtain alternate funding sources. Property taxes and state aid are the two biggest sources of revenue that fund our educational programs, and state aid has been reduced the last two years.
In order to maintain educational programming at the current level, can the district craft a budget that exceeds the tax levy limit?
Although schools have the option to exceed their “tax levy limits” with voter approval, the reality is that any proposed school tax levy increase will be benchmarked against this levy “limit”—or against the now-prevalent expectation of “2 percent”—adding to the pressures schools are under to keep taxes low even in the face of escalating costs and rising expectations for teaching and learning.
What if the proposed budget is below the tax levy limit?
If the levy increase is at or below the limit, a simple majority is what is needed for approval.
What happens if the voters reject the budget?
Obtaining our community’s support for our budget proposal—whatever level of voter approval is required—is more critical than ever given the law’s new contingent budget restrictions. If a district fails to gain voter approval and must adopt a contingent budget, then the levy increase is truly “capped”—there can be NO increase in the tax levy at all. This would force incredibly difficult budget decisions for the district.
What are New York State and the Federal government doing to help school districts that are struggling to maintain educational programming under the new property tax cap legislation?
Meaningful relief from state and federal mandates and regulations could help control costs. Other changes requiring state action, such as more regional approaches to things like health insurance, would also help.
The Property Tax Cap legislation included language that indicated school districts would receive mandate relief to help reduce costs. Governor Cuomo has created a Mandate Relief Committee but, so far, state officials have neither provided significant mandate relief nor facilitated any significant systemic changes to help school districts rein in costs. Comments may be made by contacting the Governor’s Mandate Relief Committee through our link on the district webpage.
What will happen if the there is no relief from state or federal mandates?
Without relief from the state or the federal government, it would be misleading to suggest that there are ways to cut costs to the extent that may be required in the years ahead without impacting programs that really matter to children. Community members may use the link on our district webpage to communicate directly with their legislators.
How can the public help?
We need to hear from our community to help guide us through these difficult decisions. Please get involved – call, write, send an e-mail, or attend a meeting. If you’ve never gotten involved in the district's budget process before, this is the year to do so.
Read more about the tax levy limit:
Tax Levy Cap Information
- New York’s Tax Levy “Cap” Formula: How does it add up? (Published by Questar III and Capital Region BOCES) – Posted April 4, 2014
- Raising the stakes for schools...Today’s contingent budgets (Published by Questar III and Capital Region BOCES) – Posted April 4, 2014
- The three tax levy numbers under New York state’s tax levy “cap" (Published by Questar III and Capital Region BOCES) – Posted April 4, 2014
- Understanding New York’s Property Tax Levy Cap (Published by Questar III and Capital Region BOCES) – Posted April 4, 2014
- Answers to common questions on tax cap, tax levies and tax rates from the NYSSBA - Posted February 24, 2012
- Three Tax Levy Numbers (Published by Questar III and Capital Region BOCES) - Posted February 2, 2012
- NY's Tax Levy Limit Formula (Published by Questar III and Capital Region BOCES) - Posted February 2, 2012
- New York State's Property Tax Cap: A Citizen's Guide (Published by the Empire Center) - Posted January 10, 2012
- Education Speaks Hosts Tax Cap Tuesday - Posted December 23, 2011
- Understanding New York's Property Tax Levy Cap (Published by Capital Region BOCES
and Questar III) - Posted October 17, 2011