The tax cap sting

On June 24, New York State lawmakers passed a property tax cap bill that could place extra financial burdens on local school districts and villages.

The tax cap — the first in New York history — is aimed to help homeowners and merchants from increasing property tax hikes. It will cap the tax levy at two percent or the rate of inflation, depending on which is lower.

While many are welcoming this legislative change, school districts are wary of its consequences. “It’s going to be a challenge for us,” said Oceanside Schools Superintendent Dr. Herb Brown. “The board will probably need to work together to get something done about it.”

Brown said that the cap, which goes into effect for the 2012-13 school year, should be reconsidered. He cited major cost drivers like employee benefits as expense areas that need to be added within the bill’s mandate relief section. Mandates, which are required services handed down from the state and federal governments to local municipalities, are a main reason why New York has high taxes, according to Brown. Currently, the bill passed last week provides mandate relief for transportation services and employee contracts, but not for pension or healthcare costs.

Brown said he hopes that the Mandate Relief Council, a committee that will review the new legislation and hear appeals from school districts and village municipalities, will continue to tweak the legislation going forward. He added that the Oceanside School District can still propose a budget that exceeds the cap, but voters must approve it with a 60 percent supermajority.

On the other side, village officials say that they, too, are feeling the tax-cap sting. “The problem I have is that the mandate relief doesn’t include pension and medical costs,” said Island Park Mayor James Ruzicka. “But I think our village is set up so it can absorb a two percent cap. Next year we’ll be in fairly decent shape.”

Ruzicka also said that the Village of Island Park, if it chooses, can propose a cap more than two percent as long as

60 percent of the governing body approves it. He added that this might come to fruition.

For 15 years, the New York legislature has discussed enacting a cap for residents and businesses. The median property tax paid in the country is $1,917. In New York, it’s $3,755. New York is also the most taxed in terms of a percentage of personal income. Local taxes are 79 percent higher than the national

average.

Governor Andrew Cuomo has been pushing for the legislation for some time now. “New Yorkers can now look at Albany and see progress on historic initiatives, action on issues that have been left unresolved for decades and a legislative session that delivered results…” Cuomo said in a press release. “We must now seize this momentum and press forward to continue to make this government work for the people once again.”