by Jay Lawson
A report issued by State Comptroller Thomas P. DiNapoli shows that the Town of Webb Union Free School District has bucked a statewide trend in fiscal year 2014–15 by budgeting within the two percent tax cap—a tough feat for districts receiving lesser state aid amounts.
Specifically, the report found that low- and average-need districts—those tending to receive less state aid—are twice as likely to override the tax cap, as compared to high-need districts.
The lesser state aid causes these districts to be more dependent on property taxes to fund their programs, DiNapoli said.
Other area school districts that budgeted within the two-percent tax cap in 2014–15 were Adirondack Central, Indian Lake Central, and Remsen Central.
Area school districts that required overrides of the tax cap were Inlet Common, Raquette Lake Union Free, and Long Lake Central.
Overall, the number of school districts overriding New York’s property tax cap declined by more than half over the past three fiscal years, according to Comptroller DiNapoli.
The overriding districts dropped from 44 school districts in 2012–13 to only 19 in 2014-15, he said.
“Local school district officials are working hard to operate within the confines of the cap,” DiNapoli said.
But, as the years of operating under the tax cap add up, the harder it is to continue, he said.
“It becomes increasingly difficult to stay under the levy limit while also dealing with increased costs and uncertain state aid.”
Still, DiNapoli said he is optimistic that it can be done.
“If the past three years are any indication, school districts will continue to hold the line on taxes despite these challenges,” he said.
Overall, 6.5 percent of districts exceeded the tax cap in 2012-13 (44 districts), 4.7 percent (32) in 2013-14 and 2.8 percent (19) in 2014-15.
During this three-year time frame, a total of 79 school districts exceeded the cap at least once.
Fourteen districts exceeded the cap in two of the three years.
One district exceeded the cap all three years (Kiryas Joel Union Free School District in Orange County).
From 2013–2014 to 2014–2015, 3.3 percent of low- and average-need districts exceeded the cap while only 1.5 percent of high-need districts did so.
DiNapoli’s office also found, based on individual calculations, 363 school districts could have increased the tax levy by more than 2 percent last year and, of these, 62 could have increased the tax levy by 4 percent or more while technically remaining under the cap.
In contrast, 69 districts were held to less than a 1 percent increase—with 17 actually being subject to a levy decrease from the prior year.
Nuances in the complex cap calculations have also resulted in some large year-to-year fluctuations for some districts.
For example, one district’s allowable levy limit was 21.7 percent less than in the year prior, while another district’s allowable levy limit was 45.5 percent higher than in the prior year.
Additional findings in the report include:
• Property taxes are the major revenue source for school districts outside of New York City. In 2013, these school districts spent $37.5 billion, of which $20.5 billion (55 percent) was raised through property taxes;
• School district levies increased each year at a rate slightly less than what was allowed by the tax cap. In 2012-13, school districts consumed 99.6 percent of their available limit, in 2013-14 it was 99.2 percent and in 2014-15 it was 99.7 percent; and
• Of the 19 school districts overriding the tax cap for 2014-15, five were found to be in some level of stress based on the Comptroller’s Fiscal Stress Monitoring System.