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A Citizen’s Guide to the Property Tax Cap
- The Tax Cap applies to all school districts and local governments (i.e. counties, towns, villages and special districts) and is set at the rate of inflation or 2 percent, whichever is less.
- To preserve local control, the plan empowers residents to go over the cap with a 60 percent majority vote for school districts and 60 percent of the local governing body for local governments when they believe it is in the best interest of the community.
- Only limited exceptions allowed for the cap, including one-time needs for large legal settlements or limited pension growth.
- To encourage cost savings, local governments are rewarded for consolidation of services.
The tax cap limits a local government’s (e.g. city, town, village, various special districts and school districts) overall growth in the property tax levy to 2 percent or the rate of inflation, whichever is less.
The Tax Cap=Citizen Empowerment
For local governments, the limit stays in place unless the local governing body, by 60 percent, enacts a local law (or for special districts, a resolution) that allows for an increase over the tax levy cap. The community may participate in the process because the local law is subject to a public hearing. For schools, the limit stays in place unless 60 percent of the voters approve additional spending over the cap. Voters know additional spending is required over the cap for school budgets because the budgets would require the following ballot language: "Adoption of this budget requires a tax levy increase of [X percent] which exceeds the statutory tax levy increase limit of [Y percent] for this school fiscal year and therefore exceeds the state tax cap and must be approved by sixty percent of the qualified voters present and voting."
The local hearing that precedes the vote on the local law, as well as the budget meeting preceding a school budget vote, is a chance for residents to educate themselves on why their elected officials believe they must exceed this cap. It is also a chance to question elected officials on what decisions they are making and to be heard on what services are important to the residents in the local town, or village or city or county budget, and what they may no longer be willing to support.
Find Out How Government Can Find Efficiencies and Save Tax Dollars
Find out more on the “Citizen’s Guide to Consolidating Overlapping Governments” page
Identifying where to allocate local revenues is one of the difficult decisions that local government leaders make every year come budget time. The development of the tax cap gives citizens a new opportunity to work with local officials to measure the real value of government services and their impact on daily lives. Some local governments may struggle to meet the new limits on the total property tax levy that are established pursuant to the tax cap and may seek to add spending over the cap in order to continue providing services that residents see as important. Others, though, will capitalize on opportunities to reduce costs and increase efficiencies.
When are Local Government Fiscal Years?
|Municipality Type||Budget Adoption DateLast date for adoption allowed by law||Fiscal Year|
|State||March 31||April 1 through March 31|
|County||December 20th||Calendar Year|
|City||See City Charter||See City Charter|
|Town||November 20th Except Towns in the counties of Westchester and Monroe – December 20th||Calendar Year|
|Village||May 1st Unless the fiscal year has been changed at the local level||August 1 through July 31|
|Fire District||November 4th||Calendar Year|