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Jul 17, 2017 4:27 PMPublication: The Southampton Press

State Cap On Tax Levies Announced For 2018; School Figure Not Expected For Several Months

COURTESY OFFICE OF STATE COMPTROLLER WEBSITE
Jul 18, 2017 3:49 PM

Next year’s state cap on tax levy increases will be the highest in several years: 1.84 percent for the 2018 calendar year.

Still, it will be several months before it is known how that news will affect school districts throughout New York, including on the East End.

The cap number released last week by State Comptroller Thomas DiNapoli’s office is based on figures for the 2018 calendar year, and will apply to municipal governments and fire districts that use the start of January for its fiscal year. But the fiscal year for schools runs from July 1 to the following June 30—and the state has yet to come up with a comparable cap number based on that fiscal year. That means the 1.84 percent figure could be an unfair representative of what school district administrators must work with while planning their 2018-19 school budgets next spring.

The cap was created in 2011, and first implemented in 2012, largely to rein in school spending. It limits the amount of tax revenue—the levy—that a local government can collect by capping the increase from year to year. The cap is 2 percent or the rate of inflation, whichever is less.

School districts may exceed the cap only if 60 percent of votes are cast in favor of a budget that would do so. Those districts that attempt to pierce the cap, and fail to secure the required 60-percent support, risk having to adopt a contingency budget with a zero-percent impact.

Last summer, Mr. DiNapoli’s office stated that tax levy increases for 2017 would be capped at 0.68 percent, a slight decrease from 0.73 percent in the 2016 calendar year, which runs from January 1 through December 31. But for school districts, the cap on tax levy increases was 1.26 percent for 2017, after being only 0.12 percent in 2016. The 2016 number forced some schools to eliminate all new spending for the 2016-17 school year.

Southampton Town Comptroller Len Marchese explained this week that because school district caps are calculated at a different time, inflation rates naturally differ, resulting in two different cap figures. School district caps are not typically released until the following January or February, just when local boards of education are preparing to map out their budgets for the next fiscal year.

Westhampton Beach Schools Superintendent Michael Radday agreed with Mr. Marchese, stating that the 1.84 percent figure only applies to those municipalities, like Southampton Town, whose fiscal years run from January 1 through December 31. School districts and local villages have fiscal years that begin on July 1 each year.

The trend of unpredictability—at least for school districts—can also be seen in 2015 and 2014, when the state comptroller’s office announced that the tax levy would be capped at 1.56 percent and 1.66 percent, respectively. For school districts, the real figures were 1.62 percent in 2015 and 1.46 percent in 2014, according to figures provided by the comptroller’s office.

Still, Mr. DiNapoli’s office is hailing last week’s announcement as good news for school districts and municipalities.

“After two years of tax growth being limited to less than 1 percent, inflation has crept up, resulting in the highest allowable levy growth since 2013,” Mr. DiNapoli said in a prepared statement. “This increase is offset by rising fixed costs and limited budget options. I continue to urge local officials to exercise caution when crafting their spending plans.”

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