Property Tax CapChapter 97 of the Laws of 2011

Now what?

Westchester Putnam School Boards AssociationJohn ChowStarr Dinio

Maura McAwardLinda Purvis

Property Tax CapChapter 97 of the Laws of 2011

Begins with the 2012-13 school year budget

In effect through at least 2016-17, thereafter, it remains in effect only so long as regulation and control of residential rents and evictions (i.e., rent control) laws are in place

Chapter 97 eliminates the overall contingency budget spending

restriction (lesser of 120% of CPI or 4%) beginning with the 2012-13 budget

Property Tax CapChapter 97 of the Laws of 2011

Tax Levy Cap at Lesser of 2% or CPIAssessment Growth AdjustmentExemptionsCalculation

CarryoverClerical / Technical Errors50% vs. 60%6-Day Budget Notice and BallotBudget Failure – Two Votes

TimelineStrategies Group Discussion

Q & A

Q & A

Q & A

Tax Levy CapLesser of 2% or CPI

Limits tax levy growth to the lesser of 2% or the annual increase in the CPI

• Tax Levy = total dollars of property taxes (including STAR)• NOT a cap on budget expenditures• NOT a cap on tax rate

CPI released by SED on January 14 for the prior calendar year

Tax Base Growth Factor

Tax Base = assessment roll

Tax Base Growth Factor = change in assessed value

Released by NYS Office of Real Property Services(ORPS) in November based on information provided by tax assessors

Tax Base:• If tax base goes up, tax levy limit is adjusted upward • If tax base goes down, there will be no adjustment

Exemptions

2011-12 Base Year• Voter-approved capital expenditures (debt service, leases,

capital improvements, capital equipment, etc.)• Court order and torts over 5% of prior year’s tax levy

2012-13 and future years • Voter-approved capital expenditures (debt service, leases,

capital improvements, capital equipment, etc.)• Court order and torts over 5% of prior year’s tax levy• Pension rate increase over 2% (both TRS & ERS)

Calculation

Prior Year Tax Levy

x Assessment Growth Factor

+ PILOTs

- Exemptions

x CPI or 2%

- PILOTs

+ Carryover

+ Exemptions

= Allowable Tax Levy for Next Year (may not =

2%)

Carryover

No Available Carryover (from 2011-12) for 2012-13

Districts may apply un-used levy limit dollars from prior year to increase subsequent year’s tax levy limit

Clerical/Technical Errors

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

50% vs. 60% Board Decision

Voters approve the expenditure budget:

Option 1:  Propose a budget requiring a tax levy at or below the “allowable tax levy prescribed by law”• (Requires a simple majority; 50% + 1 voter approval)

 

Option 2:  Propose a budget requiring a tax levy before exemptions above the “allowable tax levy prescribed by law”• (Requires a “super majority;” 60% voter approval)

6-Day Budget Notice and Ballot

IF the proposed tax levy exceeds tax levy limit, 6-Day Budget Notice and ballot language must say so

“Adoption of this budget requires a tax levy limit increase of XXX which exceeds the statutory tax levy increase limit of XXX… [this] exceeds the state tax cap and must be approved by 60% of qualified voters.”

Budget FailureTwo Votes

First Vote – May 15, 2012 If the proposed budget is not approved by the required margin:

• the district may resubmit the original budget or submit a revised budget to the voters on June 19, 2012

OR

• adopt a contingency budget that levies a tax no greater than that of the prior year (0% increase in tax levy)

Budget FailureTwo Votes

Second Vote – June 19, 2012 If the proposed budget is not approved by the required margin:

• District must adopt a contingency budget that levies a tax no greater than that of the prior year (0% increase in tax levy)• Administrative Cap is still in effect• Non-contingent expenses must be removed• Expenditures are no longer subject to overall contingent budget

spending cap (i.e., lesser of 120% of CPI, or 4%, whichever is less)

Timeline

November: ORPS sends out tax base data

March 1: File with OSC1 maximum levy calculation

April: Adoption of budget

May 15: First Budget Vote

June 19: Second Budget Vote

1OSC-Office of the State Comptroller

Strategies

Internal

External

Communications/Media

Getting out the Vote

Now What?

Group Discussion