NYS Comptroller sets tax levy cap at 1.26 percent

Local school districts are preparing for another tight budget season this year, with minimal state aid increases projected in Gov. Andrew Cuomo’s tentative spending plan and a cap of less than 2 percent on tax levy growth.

State Comptroller Thomas DiNapoli recently announced a 1.26 percent cap on tax levy increases for the 2017-18 fiscal year. The decision marks the fourth consecutive year that schools and municipalities will be tasked with crafting budgets that call for tax levy increases below 2 percent, he said in a press release.

“My audits have shown some school districts will be able to rely on ample rainy day funds to offset the low growth in revenue, but others must examine their budgets to determine where they can limit spending or cut costs in order to stay under the cap,” Mr. DiNapoli said in a statement.

The state’s tax cap law, which took effect for the 2012-13 fiscal year, requires school districts and municipalities to limit increases in the amount of money they raise through property taxes to either 2 percent or the rate of inflation determined by the Consumer Price Index, whichever is less. Last year, the state set the tax cap at 0.12 percent.

If a school district decides to pierce the tax cap, its budget must be approved by at least 60 percent of voters.

In some instances, districts are allowed to exceed the mandate without obtaining a supermajority voter approval because some expenses, such as pensions and capital costs, are exempt. School districts are currently calculating what their allowable tax levy limits will be for the upcoming fiscal year.

Last year, Riverhead’s $130.7 million budget proposal, which carried a 0.50 percent increase in the tax levy, was supported by a wide margin, with 1,635 voters in favor and 948 opposed. That amount was at the district’s allowable tax levy limit.

While the Riverhead district is in the beginning stages of the budget planning process, Superintendent Nancy Carney described the state aid increase proposed in the governor’s budget as insufficient.

“We appreciate the increases in state aid that we are seeing thus far, but more work is needed,” she said in an email. “Our enrollment is up by more than 600 students in the last six years and our state aid needs to keep pace with those enrollment increases.”

Riverhead is expected to receive a 4.2 percent increase in state aid next fiscal year, amounting to a boost of nearly $575,200.

Neighboring school districts are projected to receive smaller state aid increases, according to the governor’s proposal. Shoreham Wading River is slated to receive a 1.8 percent increase, or $112,860, and a 1 percent hike is planned for Mattituck, up $16,290 from the previous year.

In recent years, the state Legislature has been successful in securing more state aid by the time the spending plan is adopted. The state budget must be adopted by April 1.

Riverhead’s first budget discussion will take place during the Feb. 14 school board meeting.

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