Long Island homeowners could be breathing a sigh of relief next year as the state’s property tax cap tightens again for local governments to its lowest level since the law’s passage in 2011, according to State Comptroller Thomas DiNapoli.
But the head of the New York State Association of Counties expressed concern that limited property tax growth could force municipalities to trim programs and services.
Property taxes in 2017 will be capped at .68 percent, compared with .73 percent, in 2016 due to low inflation rates, DiNapoli said Monday.
The tax cap, which went into effect in 2012, limits property tax growth for counties, cities, villages, towns, fire and school districts to two percent or the rate of inflation, whichever is lower. Inflation is low because of cheap oil prices and other economic trends.
Municipalities and school districts can exceed the cap by winning a “supermajority” of at least 60 percent in budget votes.
DiNapoli said 2017 will be the fourth consecutive year that governments have had their property taxes capped at under 2 percent and the second straight year with levies capped at less than 1 percent.
“New York’s local governments must cope with extremely limited growth for property taxes to stay within the tax cap,” he said. “Low inflation has positive effects for consumers, but it also reflects an uncertain economic environment. Local officials have faced growing fixed costs and limited budget options for years, but 2017 will necessitate even tougher financial choices.”
Long Island officials expressed optimism that they could manage their finances with limited property tax growth.
“The tax cap continues to encourage local governments and school districts to pursue efficiencies,” said Nassau County Executive Edward Mangano.
Suffolk County Executive Steve Bellone said he would “make the tough financial decisions necessary to hold the line on spending and reduce the tax burden for our residents. We must meet the needs of Suffolk County taxpayers while maintaining fiscal discipline and high standards of efficiency.”
Stephen Acquario, executive director of the New York State Association of Counties, expressed concern about how municipalities will fund mandated services, even as many struggle with underperforming sales tax revenue.
“In the past five years, counties have sold assets and depleted reserves to meet the state’s property tax cap requirements,” Acquario said. “The low sales and property tax revenues announced in the past few days will require counties to further reduce local programs and services.”
Suffolk reported last week that county sales tax collections are less than half the 3.55 percent projection that was included in the 2016 budget. Nassau reported that midyear sales tax receipts increased 1.7 percent from January through June. Nassau budgeted for sales tax growth of 1.26 percent.
DiNapoli announced in January that school districts face a record low property tax cap of .12 percent for the 2016-2017 school year.