Districts prepare for reduced tax levy cap

NY Capitol News

ALBANY, N.Y. (NEWS10) — Budget season for school districts across Upstate New York is about to get a lot more complicated.

The state has lowered the tax levy cap for the next fiscal year meaning districts will have less wiggle room to come up with a budget.

When it comes to how the state sets the tax levy cap for school districts, David Little with the Rural Schools Association of New York State says there are a couple factors.

“They gave it kind of this other option of it’s either two percent, or if it’s lower, the Consumer Price Index,” he said.

And this year, the consumer price index drove the cap down to 1.8 percent.

The State Comptroller said in a statement:

“As the levy growth rate dips below two percent, school district and municipal officials need to be fiscally cautious and examine where they can limit spending to stay under the cap. Local governments will have to examine their budgets more closely to control expenses.”

Little says, with retirement system contributions, employee healthcare and bus costs, this can be difficult for schools.

“They don’t have the same kind of consumer costs, so eliminating them to the cost that consumers pay has always been problematic,” he said.

The school district budgets that stay within the cap need a regular majority vote to go through.
If they go over, they need a 60 percent vote.

Little says for rural school districts looking to keep people, “they don’t have a lot of taxing capacity within their school districts. So there’s not a lot of people and there’s not a lot of businesses left to tax there.”

According to the Comptroller’s Office, the cap was first applied in 2012.

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