Daniel T. Connor
Superintendent

227 Main Street
Goshen, NY 10924
(845) 615-6720

District news

New York State adopts property tax cap

July 6, 2011 - After years of debate, the New York State Legislature has passed a property tax cap, which seeks to limit the annual increase in tax levies of local governments and school districts to two percent or the rate of inflation, whichever is less.

The cap will take effect this coming budget season and affect district planning for the 2012-13 school year.

District officials continue to analyze the tax cap legislation to determine how Goshen will be affected. At this time, it is unclear what the exact tax levy cap will be for Goshen given the number of exemptions outlined in the legislation.

Tax Cap Law Basics – Here’s what we know about the tax levy cap:

• Tax levy increases will be capped at 2 percent or the rate of inflation, whichever is less. For 2011-12, this would have meant a 1.6 percent cap because that is the current rate of inflation.

• 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.

• If a proposed budget is defeated twice by voters, the district would be forced to adopt a budget that does not increase overall spending over the current year. In other words, a zero percent cap.

• Every district will receive an additional allowance between 1 and 2 percent for tax base growth. 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.

• The pension exemption allows districts to exclude cost increases attributable to increases in the employer contribution rates for Teachers Retirement System (TRS) and Employees Retirement System (ERS) greater than 2 percentage points.

• Exemptions are also allowed for court judgments, tax certiorari cases and capital project costs.

• Budget proposals will need to be submitted to the state by March 1 of each year. This will be one month before the April 1 state budget deadline, which means at the time district leaders finalize their budget they will not have final state aid numbers. The budget vote would still be held in May.

• 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.

Mandate relief and moving forward

The legislation signed into law on Friday also included a number of measures aimed at alleviating state mandates and helping school districts bring down costs. School leaders continue to review the legislation to learn what it means for Goshen. These measures 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 (this does not apply to Goshen, with more than 3,000 students).

• 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.

Aside from the tax cap legislation, there are a number of factors set to affect Goshen’s 2012-13 budget. These include:

• A projected liability of more than $12 million in tax certioraris.

• Double-digit increases in the state-mandated contributions to the Teachers’ Retirement System and Employees’ Retirement System.

• Contractual increases, such as salaries and health insurance.

• Skyrocketing energy costs.

• Limited availability of fund balance after it has been spent down in the recent years of declining state aid.

• A modest increase – if any – in state aid. With a $2.5 billion state budget deficit already being predicted, it is uncertain that there will be any increase in state aid for the 2012-13 school year.

While district officials understand the level of tax fatigue and frustration with ever-increasing tax bills, Superintendent Daniel T. Connor said they also know that the best economic stimulus is a solid education and high school diploma.

“Together, as a community, we will face the challenges in front of us and work to maintain quality schools for our children,” he said.