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Property Tax Cap Chapter 97 of the Laws of 2011 Now what?

Westchester Putnam School Boards Association John Chow Starr Dinio Maura McAward Linda Purvis. Property Tax Cap Chapter 97 of the Laws of 2011 Now what?. Property Tax Cap Chapter 97 of the Laws of 2011. Begins with the 2012-13 school year budget

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Property Tax Cap Chapter 97 of the Laws of 2011 Now what?

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  1. Westchester Putnam School Boards Association John Chow Starr Dinio Maura McAward Linda Purvis Property Tax CapChapter 97 of the Laws of 2011Now what?

  2. 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

  3. Property Tax CapChapter 97 of the Laws of 2011 • Tax Levy Cap at Lesser of 2% or CPI • Assessment Growth Adjustment • Exemptions • Calculation • Carryover • Clerical / Technical Errors • 50% vs. 60% • 6-Day Budget Notice and Ballot • Budget Failure – Two Votes • Timeline • Strategies • Group Discussion Q & A Q & A Q & A

  4. 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

  5. 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

  6. 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)

  7. 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%)

  8. 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

  9. 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

  10. 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)

  11. 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.”

  12. Budget Failure Two 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)

  13. Budget Failure Two 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)

  14. 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

  15. Strategies • Internal • External • Communications/Media • Getting out the Vote

  16. Now What? Group Discussion

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