Battling Back Against The Tax Cap

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School groups and local governments are warning that a property-tax cap to be approved today in the state Senate would drastically hurt local budgets and cripple programs.

The expected pushback comes as Senate Republicans plan this afternoon to pass Gov. Andrew Cuomo’s bill that would limit the growth in property taxes to 2 percent a year or the rate of inflation, which ever is lower.

School groups said the one being passed by the Senate is even stricter than initially believed – and without reforms to state mandates that are driving up local costs.

The measure would overhaul how residents vote on school budgets each year. Instead of voting on a district’s overall spending, they would vote on how much to raise a district’s tax levy – the amount of money collected through property taxes. Schools said the move would disregard special programs that districts need or, for example, an influx of students that could require a district to exceed the cap.

The state United Teachers union warned that measure would force districts to adopt zero tax levy increases if voters twice rejected the proposed increases at the ballot box. The cap comes as schools are also bracing for cuts in aid as part of Cuomo’s budget to be released Tuesday.

“If an ill conceived, destructive tax cap, which is clearly what the Senate is prepared to approve today, goes forward — and it goes forward at the same time as significant cuts in state support for education — then that is going to have a devastating and destructive effect on school districts,” said NYSUT president Richard Iannuzzi.

Iannuzzi also predicted that the bill won’t go anywhere in the Democratic-led Assembly, which has been leery of the tax cap.

“It’s not going past the Senate in its current form because the Assembly has not been part of the conversation about what the bill is,” Iannuzzi said.

A school budget would be approved in May if more than 50 percent of voters voted yes at a referendum, but it would require 60 percent of voters to adopt a school budget than exceeds a 2 percent tax-levy increase.

And if a school vote failed twice – rather than adopt a contingency budget which can be as high as a 4 percent increase in spending under current law – districts would be required to maintain the same level of funding as in the prior fiscal year.

Local governments would have to abide by the cap, as well, but the mechanism to do so is different. Since voters do not approve the budgets of counties, cities and villages, a tax levy above the cap would require a two-thirds vote of the governing body. But local governments said the cap would not alleviate the state mandates they have to fund, such as pension and health-care costs.

“Taxpayers in New York will get the two things they need most – property tax relief and the continuation of essential municipal services – only if Albany finally demonstrates the will to reform the state mandates that are the real culprits in creating New York’s overwhelming property burden,” said Peter Baynes, executive director of the New York Conference of Mayors.

The state Association of Counties is also deriding the cap, saying they would be hard pressed to abide by it without mandate relief from Albany. They wrote this letter below to state senators.

Prop Tax Cap Senate Bill 2706 ltr 020111

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