Budget squeeze ahead?

If predictions from New York State Comptroller Thomas DiNapoli’s office are correct, local municipalities could be looking at very tight budgets next year.

According to a report released by the comptroller’s office, based on current economic trends, the state tax cap for the next fiscal year could be around .73 percent — the first time since the so-called 2 percent tax cap was enacted in 2012 that it would be below 1 percent.

“Local government officials need to brace for the lowest growth in their property tax revenue in the tax cap era,” DiNapoli said in a release. “Municipalities may have to operate differently under these new limits. Even tougher budget choices may be required on staffing levels, delivery of services, fund balance reductions, and deferral of capital and infrastructure projects. And if inflation trends continue, it is possible that some local governments with fiscal years beginning later in 2016, including school districts, could be faced with zero growth in property tax revenue.”

The tax cap does not actually cap tax levy increases at exactly 2 percent. It limits them to the rate of inflation or approximately 2 percent, determined by a complex formula — whichever is less. Inflation rates have been dropping in recent months, and have been bringing the potential levy down with them.

The .73 percent levy is a possibility for municipalities that begin their fiscal year on Jan. 1, including Nassau County and the Town of Hempstead. Both the Village of Rockville Centre and the school district, however, begin their fiscal calendars later in the year: the village on June 1 and the school district on July 1. DiNapoli warns that the effects could be even worse by then, because the inflation rate will have more time to fall before the tax cap is calculated.

Both the village and the school district said it was too early to comment on possible budgets. “We’re aware that there’s potential for a reduced tax cap for the fiscal year beginning June 1, 2016,” said Village Comptroller Michael Schussheim, “and we’ve already begun discussing ways to deal with that, and prefer not to disclose at this time the different ways that we’d deal with it.”