- BOE Meeting
Parents and Taxpayers:
It's that time of year to start thinking and talking about Massena Central School District 2012-2013 School Budget. In an attempt to get as much useful information out to you as possible, we plan to make this School Budget Update a weekly event. We will provide you with different information each week to assist you in navigating the budget process and help you to understand what is going on both at the state and district level. It is our hope that you will find this information informative and that it will assist you in making sound financial decisions for the employees and students at Massena Central School District.
TAXPAYER ALERT!
New York’s 2% Tax Cap mAY MEAN MORE THAN 2% INCREASE TO YOUR TAX BILL
In order to begin to explain the meaning and affect of the TAX CAP for district residents, a few terms used in the TAX CAP regulation must be explored.
· School Budget –
A budget is a description of a financial plan. It is a list of estimates of revenues to and expenditures by a school for a stated period of time, this is also referred to as a “spending plan”.
· Tax Levy –
The amount of property tax a district must collect to balance the budget after accounting for other revenue and state aid. The tax levy is the basis for determining the tax rate.
· Tax Levy Limit –
A calculated tax levy amount (according to a complex state formula) sets the threshold, not a limit, requiring districts to obtain a higher level of community support for a proposed tax levy above a certain amount. This calculation adjusts a district’s tax levy (the amount needed to balance the school budget) to reflect the growth in the tax base and the rate of inflation or 2% (whichever is lower.)
· Tax Base Growth Factor –
The year-to-year increase in the full value of taxable real property in a school district due to physical or quantity change (e.g., new construction, additions and improvements).
· Allowable Levy Growth Factor –
This figure accounts for the change in inflation. It is limited to the lesser of 2 % or the change in the consumer price index (the measure of changes in the purchasing power of a currency and the rate of inflation).
What does this mean to the local tax payer?
Q: Does the public still vote on school district budgets?
A: Yes. District residents will approve or disapprove the budget (school spending plan) not the tax levy.
Q: Does the new tax cap law mean school tax levies can’t increase by more than 2 percent?
A: No, the new law requires districts to calculate its own tax levy limit that includes eight factors (one of which is the two percent or rate of inflation, if less).
Q: What factors are included in the tax cap calculation that may allow the total tax levy increase to be greater than the “perceived cap”?
A: The formula allows for certain expenses to be exempt from the cap calculations such as a capital tax levy, capital local expenditures, court orders or judgments.
Q: What will the property tax cap law mean for MY tax bill?
A: The law applies to the tax levy, not to tax rates or individual tax bills. It does not impose a universal 2 percent cap on taxes. It does require a greater number of voters to approve a budget that exceeds a school district’s individual “tax levy limit”, as calculated by a complex state formula.
Q: How are tax rates determined?
A: Tax rates are not solely determined by the tax levy approved by voters; they are often adjusted by the state using equalization rates, designed to equally distribute the tax burden across municipalities within a district. Tax bills can also be affected by STAR or other exemptions.
Q: Does the law take into account that some expenses are currently outside a district’s control?
A: Yes. Taxes that school districts levy to pay for certain expenses are “exempt” from the “tax levy limit” calculation. In other words, after a district calculates its “tax levy limit,” it then adds exemptions to that amount. Exemptions may include: voter approved capital expenditures, increases in state-mandated employer contribution rates for pensions exceeding two percentage points, court order, or judgments.
This law seeks to control increases (a source of revenue), not to help curb escalating expenses. Except for a few modest mandate-relief measures, the law does nothing to help schools rein in costs.
For more information on the Property Tax Levy Cap click below:
This publication is produced by the Questar III State Aid Planning Service and the Capital Region BOCES and Questar III Communications Services to help explain New York’s recently enacted property tax levy cap.
