May 16, 2013
Voters in New York go to the polls on May 21st to approve new school budgets. The State School Boards Association finds that many school districts are living within the limits imposed by a property tax cap enacted two years ago.
The School Board Association’s Tim Kremer says a survey of the state’s school districts finds that the vast majority are budgeting within the strictures of the tax cap, and as a result, 93% expect their budgets to be approved by voters.
“It’s our expectation that if you stay at or below the cap this year, there’s a pretty good chance you’re going to pass your levy, “ Kremer said.
He says because there’s an exemption for pension costs, schools can actually ask for a 5.1% increase in taxes over last year’s amount, and still be within the tax cap. But he says because the tax cap was initially billed as a 2% limit over the previous year’s levies, schools are actually only asking for an average of a 2.8% increase.
“When you go out at 5%, and the world’s been told there’s a cap at 2%, you’re testing the waters,” Kremer said.
Kremer says more than half of the schools say they are not finding it hard to manage within the property tax cap. And only 27 school districts, out of over 700, are asking voters to override the cap. A 60% super majority of voters are needed to approve an override of the tax cap.
A state aid increase of $1.1 billion dollars this year helped stave off some financial problems. Kremer says he hopes that trend continues.
Governor Cuomo championed the property tax cap and convinced the legislature to pass it during his first year in office, in 2011. Cuomo says it’s changed the culture in New York, which ranks as one of the most highly taxed states in the nation. And he says it’s ended the days of “5, 6, 7, 8, 9, 10, 11% increases” in taxes from year to year.
“Those days are gone,” Cuomo said. “They’re not socially unacceptable.”
Kremer, with the school boards, agrees that the tax cap has made a difference. But he says the trend away from double digit tax increases each year began even earlier, in 2008 when the recession hit.
“There was pretty much a political tax cap, a self imposed tax cap that most school districts were paying attention to already,” Kremer said.
He says tax increases year to year in the past five years have averaged between 2 and 3%.
“We knew that there were people who were suffering, taxpayers who were saying ‘we just can’t afford any additional taxes’,” he said.
There are some unsettling trends, though, says Kremer. Schools are spending down their reserve funds at an unprecedented rate, in order to avoid asking property taxpayers for more money. And he says some estimates predict that schools will have spent all of their reserves in two to four years.