10 Fast Facts about New York’s Property Tax Levy Cap
2011 - View these 10 Fast Facts to learn about the new tax levy
cap law, which will affect budget planning for the 2012-13 school year.
Learn more by viewing the
Tax Levy Cap page
The “2 percent tax cap” does NOT limit a tax levy
increase to 2 percent. It does mean, however, that any increase
above a certain amount requires 60 percent of voters to approve the
school budget. That certain amount is called the “tax levy limit”
and will vary by school district.
The “tax levy limit” is determined by a complex,
eight-step formula that includes factors such as the growth in the
local tax base (if there is any), the previous year’s tax levy, and
the current and future years’ payments in lieu of taxes (PILOTS).
The rate of inflation or 2 percent, whichever is
lower, is just one part of the “tax levy limit” calculation. That is
where the phrase “2 percent tax cap” comes from.
If Goshen’s proposed budget meets or stays below
the “tax levy limit” (before exemptions), more than 50 percent of
voters (a simple majority) need to vote “yes” to pass the budget.
After a school district calculates its “tax levy
limit,” it then adds exemptions into that amount. These exemptions
allow the district to propose a tax levy greater than the amount set
by the “limit” without requiring 60 percent of the voters to pass
These exemptions – or factors that “don’t count”
against the cap – include voter-approved local capital expenditures;
increases in the state-mandated employer contribution rates for
teacher and employee pensions that exceed two percentage points; and
court orders/judgments resulting in any amount that exceeds 5
percent of a district’s current levy.
If Goshen proposes a budget that includes a tax
levy above its “tax levy limit,” you will see a statement on the
ballot by law.
The new law applies to the tax levy, not to tax
rates OR individual tax bills. What will happen to your tax bill –
how much it may go up or down – cannot be predicted until a number
of other factors are determined later in the year, such as local
assessments which are set by the assessor and equalization rates
which are set by the state. Both of these impact the amount of each
If the proposed budget is not approved, the
district may submit the same budget proposal or a revised budget
proposal for another vote, or go directly to a contingency budget.
If a second vote is not approved, the district must adopt a
contingency budget. However, under the new law, a district that
adopts a contingency budget cannot increase its tax levy from that
of the prior year by any amount – a ZERO percent increase.
As in previous years, district residents will
vote on the district budget on the third Tuesday in May, or Tuesday,
May 15, 2012.