School Districts Propose Two Percent Increase in Tax Levy for Next Year
ALBANY, NY (03/13/2014)(readMedia)-- The New York State Association of School Business Officials (NYSASBO) reviewed and analyzed data recently submitted by school districts to the Office of the State Comptroller as required by the tax cap law.
The 2011 law requires school districts to submit data to the State Comptroller by March 1 of each year on the amount they plan to propose to raise from local taxes and whether the amount requires a simple majority (more than 50 percent) or a super majority approval of 60 percent or more of the voters. School districts that exceed their tax cap or allowable levy limit require a supermajority approval vote to pass their budgets. School districts are allowed to levy some additional items beyond the levy limit such as excess pension costs and local capital expenditures and these are known as exclusions to the Tax Cap. The Tax Cap law allows school districts to increase their levy by two percent or the rise in the Consumer Price Index over the prior year, whichever is less; for 2014 the CPI is 1.46 percent.
Six hundred seventy-two school districts (99 percent) submitted data by the deadline. Four percent of school districts overrode the Tax Cap in 2013 and six percent propose an override in 2014. Districts can submit changes to their Tax Cap data until their boards of education approve school district budgets. (see map of districts with overrides in 2013 and 2014)
"Despite a difficult economy for the State in recent years, school districts have contained spending and levy increases, both before and during the Tax Cap era," said Michael Borges, NYSASBO Executive Director. "While this continues to present challenges for maintaining education programs children need to be college and career ready, school boards, superintendents and business officials are demonstrating that they are responsible stewards of public funds for education," continued Mr. Borges.
Total possible levy under the Tax Cap represents a 2.14 percent increase compared with the prior year. Total proposed levy by school districts that submitted data amounts to a 2.01 percent increase compared with 2013-14. (see map of proposed levy increases)
This compares to last year's results of 28 school districts seeking an override, ten of which were approved by voters at the conclusion of the budget process, a 5.1 percent possible levy increase and a 3.1 percent proposed levy increase.
"With the Tax Cap growth factor being driven by low inflation of 1.46 percent, school districts are proposing budgets that are close to their levy limits," said Michael Borges.
The annual school district budget voting day is May 20, 2014. School districts whose voters fail to pass their budget can adopt a contingency budget with a levy no greater than the prior year, or they can resubmit a revised or the same budget for a revote on June 17, 2014.
NYSASBO examined data for the last decade (2004-04 to 2013-14) and compared district behavior for the first and second halves of the decade. The Tax Cap was in place for the last two years of the decade. School districts behavior changed markedly in these two periods. They contained spending in the second half of the decade that was less than a third of what it was and raised levies that were less than half of what they were in the previous five years.
'This shows that school officials operated under an unofficial Tax Cap even before the statutory Tax Cap was in place," concluded Mr. Borges.