Local Governments and School Districts Face Tighter Tax Cap
As local governments begin to prepare their 2015 budgets, the state has released next years property tax cap figure. The cap is intended to force local governments and school districts to reign in spending.
With a decline in inflation, the property-tax cap is also dropping. The state imposed property-tax cap limit will be 1.6% next year for counties, towns, cities and school districts.
The cap limits local tax levy's, local governments can override the cap. Voters in school districts can also vote to exceed the cap.
In 2011, Gov. Andrew Cuomo and the State Legislature enacted a property-tax cap to address New York having among the highest taxes in the nation. And it's worked: the cap has limited the growth to less than 2 percent a year in most cases.
The cap limit each year is set at either the rate of inflation or 2 percent, whichever is lower. And it's been lower than 2 percent over the last two years.
For schools and larger cities that run on a fiscal year that starts July 1, the cap this year is 1.46 percent. The cap limit can fluctuate per taxing district because growth in a community and some pension costs are excluded from the cap calculations.
The cap has squeezed budgets for municipalities and schools at a time of stagnant revenue and growing costs, local leaders said.
State aid to local governments has been flat in recent years, and they said the state hasn't done enough curb unfunded state mandates.