SENATE PASSES PROPERTY TAX CAP LEGISLATION

 

Bill also provides for mandate relief for school districts, municipalities


The New York State Senate has passed historic property tax relief legislation that enacts a firm cap on local property taxes and provides for mandate relief for school districts and municipal governments.


“Since hearing from so many of my constituents about out-of-control property tax increases, I worked with the Governor to enact a tax cap.  New York is now the 44th state to cap property taxes.  A cap will stop dramatic spikes in property taxes and prevent homeowners from being taxed out of their homes,” said Ranzenhofer.


The bill (S.5856) caps school and local government taxes at two percent or the Consumer Price Index (CPI), whichever is lower. In addition, the legislation establishes a Mandate Relief Council to identify and repeal unsound, unduly burdensome laws and regulations. The bill also includes $127 million in savings to local governments.


This tax levy cap shifts the focus from total spending to the actual property taxes levied to support school district and local government expenses. The bill includes the following provisions:



  • This bill limits tax levy growth to the lesser of two percent or the annual  increase  in the CPI. 

  • The exceptions for a tax levy above two percent or CPI are funds needed to support voter-approved capital expenditures, pension increases, torts over five percent of the prior year’s levy and an override of the cap.

  • A school district would be required to submit a tax levy proposition for approval by voters at the district's annual meeting on the 3rd Tuesday in May. If the proposed tax levy is within the district's tax levy limit, then a majority vote would be required for approval. If the proposed tax  levy seeks to override the cap and exceeds the district's tax levy cap, the threshold required for approval would be 60 percent of the vote.

  • A school district that does not levy an amount up to the cap in any one year would be allowed to carry over unused tax levy capacity into future years. However, this carryover levy capacity cannot be used to increase  its  tax  levy by more than an additional 1.5 percent above the cap in any single year.

  • In the event a district's actual tax levy exceeds its authorized levy due to clerical or technical errors, the erroneous excess levy must be placed in reserve to offset the levy for the next school year.

 


The bill also provides for the same cap to apply to taxes levied by municipal governments.  Local governments that do not levy an amount up to the cap in one year can rollover that amount up to 1.5 percent in the following year. Exceptions include pension increases and tort judgments in excess of five percent from the prior year’s levy. Local boards can exceed the cap with a 60 percent vote of the governing body.


In addition, the mandate relief component serves as a first round of cost savings in the form of $127 million to local budgets. This includes $70 million for all local governments and school districts centralized contracts; $34.6 million in savings for school districts; $13 million for transportation/housing/contracting/procurement/administration for all localities; $7.9 million in social services savings for counties; and $1.5 million in criminal justice savings


Senator Ranzenhofer expressed a desire for greater mandate relief savings.


“There is still much work to be done on mandate relief, including relieving counties of burdensome Medicaid and pension payments and school districts of onerous and duplicative audits.  As the year progresses, I will work with the Governor, and my colleagues in the Senate and Assembly, to not just take first steps, but to make greater progress towards achieving additional mandate relief,” said Ranzenhofer.


The bill also establishes a Mandate Relief Council which will:



  • Determine if a statute or regulation is unsound, unduly burdensome or costly

  • Establish procedures for repealing unfunded mandates in both statute and regulation

  • Provide a mechanism for direct appeals from the State Administrative Procedures Act petition

  • Require the State Comptroller to issue a detailed report on the cost and effect of unfunded mandates

  • Require that all bills that require a local government or a school or special district to take any action contain a fiscal note

  • Be comprised of 11 members nominated by the Governor and Legislature: two nominations for each of the legislative leaders, and seven nominations for the Governor, including the Secretary to the Governor (who would serve as chair), the Governor’s Counsel, Secretary of State, Director of the Division of Budget, and three additional members from the Governor’s executive chamber staff.

 


The bill has been passed in the State Assembly and signed into law by the Governor.  The law will first take effect for the 2012-13 fiscal year.


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