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Comptroller: School districts have 1.26% tax cap for 2017-18

Students in a ninth-grade algebra class on May

Students in a ninth-grade algebra class on May 1, 2013, at Center Moriches High School. Credit: Heather Walsh

ALBANY — Growth in school taxes on Long Island and statewide will be held next year to a baseline property-tax cap of 1.26 percent — higher than this year’s near-zero limit but less than what education officials said they need to meet expenses.

The state comptroller’s office, in announcing the cap for the 2017-18 school year on Wednesday, noted that the level remains well below the 2 percent widely regarded as an indicator of what is affordable for local systems.

The state’s tax-cap law, which took effect in 2012, limits tax-levy increases to 2 percent or the inflation rate, whichever is lower. The baseline is used in calculating tax restrictions on individual school districts, which vary widely depending upon exceptions allowed under the law, such as voter-approved borrowing for school construction and renovation.

School property taxes account for more than 60 percent of property owners’ bills.

State Comptroller Thomas P. DiNapoli, who began his civic career as a school board member on Long Island, predicted the 2017-18 cap’s impact will vary significantly from district to district.

“My audits have shown some school districts will be able to rely on ample rainy-day funds to offset the low growth in revenue, but others must examine their budgets to determine where they can limit spending or cut costs in order to stay under the cap,” DiNapoli said.

The current school year’s baseline cap of 0.12 percent was a record low. That cap was welcomed by taxpayer groups but received with protests from a number of school districts in Nassau and Suffolk counties.

The cap law was designed to rein in local property taxes, which rank among the nation’s highest. The law applies to school districts and to municipalities and other local governments. The comptroller’s office calculates a separate baseline cap for school districts.

Districts whose proposed spending plans override their individual caps can gain voter approval only by mustering a supermajority of 60 percent or better in the May budget vote.

A record nine districts on Long Island sought such overrides last spring; in seven of those districts, the cap-piercing budgets passed.

In June revotes in the remaining two systems, one gained voter approval of a budget that met its cap. The other district again sought to bust its limit — a move voters rejected, meaning the district had to freeze its tax increase and operate under an austerity budget.

Some education groups are attempting to loosen the cap’s restrictions through legislative changes. One suggestion broached by the New York State Association of School Business Officials and other Albany-based groups is to set the baseline cap at a flat 2 percent, getting rid of the inflation rate as a factor.

Such a change would require approval by state lawmakers. It also would face a potential veto from Gov. Andrew M. Cuomo, who considers the property-tax cap a hallmark of his administration.

Several local school boards have taken up the call.

Last month, the Remsenburg-Speonk district’s five-member board voted in support of a flat 2 percent cap. One argument in favor of a flat cap is that it would protect districts against annual fluctuations in the baseline rate that arise from changes in inflation.

“To plan for the future, we need predictability,” said Ron Masera, superintendent of the Remsenburg-Speonk district, has written to area representatives in the legislature to seek their help.

Remsenburg-Speonk is located in Southampton Town and enrolls 140 students in kindergarten through the sixth grade.

Any move toward a flat cap is unlikely in the near future, however. In 2015, legislators extended the statewide cap for another three years, to 2019-20.

Cuomo consistently has defended the measure on the grounds that property taxes must be held in check for the sake of the state’s economic health.

During a speech Tuesday night about his 2017 proposed state budget, the governor said that the median income tax statewide was $1,874, while the median property tax was $4,703.

“That, my friends, is the greatest obstacle that the State of New York has — getting the property tax down,” Cuomo said.

The governor and legislature have sought over the past five years to compensate for limits on local property taxation through expansion of state financial aid to schools.

On Tuesday, Cuomo in his proposed budget called for additional statewide school aid of $1 billion, a 4 percent increase, for the 2017-18 school year.

Tax cap: Year by year

The statewide allowable tax-levy increase for school districts is calculated by the state comptroller’s office as a baseline cap figure. Under New York law, the baseline is 2 percent or tied to the inflation rate, whichever is lower.

Each school district has its own tax-cap limit based on the statewide figure, but adjusted for exemptions allowed under state law. Exceptions include interest payments on voter-approved borrowing for school construction and renovation.

Here are statewide caps, by school year, since New York’s law took effect:

2012-13: 2 percent

2013-14: 2 percent

2014-15: 1.46 percent

2015-16: 1.62 percent

2016-17: 0.12 percent

2017-18: 1.26 percent

Source: State comptroller’s office


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