The number of school districts that sought a property-tax-cap override was so small that school districts will likely continue to abide by the cap — a move that will put pressure on schools’ finances, a report today from Moody’s Investors Service said.
With 53 of 677 New York school districts attempted to override the new property tax cap (other state data showed 48), Moody’s said there is strong public support for the cap and districts are fearful of seeking an override — which would require 60 percent approval from voters.
But the abidance to the cap will impact school’s ability to raise revenue to pay for costs, the report said.
“The budget votes indicate school districts will face continued financial pressure in the face of the cap, despite the option to request an
override from voters,” said Moody’s analyst Larry Bellinger, author of the new report, “Few Property Tax Overrides Point to Slow Revenue Growth
for New York School Districts,” in a statement.
Moody’s warned that schools will turn to using the rest of their dwindling reserves to pay for growing costs and will make further cuts.
“We expect reserve levels to fall in the coming years,” Bellinger said.
Forty-eight districts sought a 60 percent supermajority to override the cap in the May 15 vote, and 19 failed. Of those that failed, 68 percent, or 13 districts, are categorized as average-need districts, according to the state Budget Division.
Voters approved 96 percent of school budgets last Tuesday, and 92 percent of districts stayed within their tax-cap limit. The average tax-levy increase was 2.2 percent.