This is the first of a multi-part series of Summer feature stories, designed to highlight important aspects of education both here in North Colonie and New York State. To learn more about this series, click here.

Posted July 5, 2011

The New York State Legislature made it official this month in passing Governor Andrew Cuomo's campaign promise to enact a property tax cap on school districts and municipalities. The cap will take effect this coming budget season and affect district planning for the 2012-13 through the 2016-17 school years.

The cap seeks to limit the annual increase in the tax levies of local governments and school districts. The legislation also included a package of items that legislators said was intended to offer districts some “mandate relief,” referring to state laws and regulations that drive up costs — and ultimately taxes.

While the new law is being advertised as a 2 percent cap on annual property tax levy increases, several provisions dictate that the actual increases will vary from that figure. This is primarily due to a series of costs that are exempt from the cap, including some pension contributions and spending for voter-approved capital projects.

Voters will still decide on school budgets in New York.

As North Colonie leaders continue to analyze the tax cap, Superintendent D. Joseph Corr is projecting that next year will be another challenging budget year for the district.

“We will continue to focus on aligning resources to promote student achievement,” Corr said. “Now more than ever, we need to scrutinize our expenditures to promote student academic performance.”

Here’s what we already know about the tax levy cap

• Though much-publicized, the “lesser of 2 percent or the rate of inflation” is only one factor contributing to a district’s cap, or "tax levy limit." In fact, there are eight different steps to the calculation outlined in the legislation, plus certain costs that are exempt from the limit. As such, many districts may propose tax levy increases above the 2 percent threshold and still be within their “cap.”

• Every district who experiences a tax based growth will receive an additional allowance between 1 and 2 percent. This would bring the total allowable tax levy increase up to somewhere between 3.9 and 4.9 percent.

• If a district’s tax levy increase is under the cap, the difference can be carried over to the next year.

• Exemptions are also allowed for court judgments and capital project costs.

• There is not a five-year expiration date on the cap, which had been previously discussed by state leaders. The cap is tied to the expiration of rent control legislation for New York City.

• A district may propose a budget that goes over the cap, but that would require approval from more than 60 percent of voters. A budget that falls within the cap would require approval from more than 50 percent of voters.

Mandate Relief

The tax cap legislation was approved with a package of changes intended to help school districts and local governments control costs. These included the creation of a Mandate Relief Council to curb some of the laws and regulations that lead to escalating expenses for school districts and local government. The mandate relief items approved recently that apply to schools include:

• Allowing school districts to plan bus routes not by every potential bus rider, but rather by patterns of student ridership.

• Allowing districts to “piggyback” on some state purchasing contracts.

• Allowing districts to borrow the money needed to pay some pension costs.

• Allowing districts to share services, materials and equipment with other districts and municipalities.

• Allowing for joint electricity purchasing among school districts.

• Allowing districts with fewer than 1,000 students to share a superintendent with up to two other districts.

• Allowing districts to conduct a pre-k census every two years, rather than every year.

• Changing claims auditing practices for districts with more than 10,000 students.

• The creation of a Mandate Relief Council to hear petitions from local governments and school districts for relief from specific mandates.

Where are we now?

In May, district residents approved a $92,929,000 budget, which is estimated to increase residential property taxes by 2.97 percent.

District officials are continuing to analyze the newly passed legislation and are determining how much of an affect it will have on next year’s budget planning.

“Our budget process is continual as we exercise our programs and expenditures as they relate to promoting student performance,” Corr said. “We will continue as an administration and Board of Education to monitor the situation closely and encourage our public to be part of the process.”