Low CPI Forces More Districts to Override Tax Cap

FOR RELEASE: May 4, 2016

CONTACT: David Albert
(518) 783-3716 or (518) 320-2221 cell

Twice as many school districts as last year plan to seek overrides of their tax caps when voters go to the polls on May 17 to decide the fate of school budgets, according to an analysis of State Education Department data by the New York State School Boards Association (NYSSBA). 

The reason: near zero inflation. A Consumer Price Index (CPI) of only 0.12 percent has limited tax levy growth to an average statewide levy increase of only 1 percent. The CPI is the biggest component of the formula used to determine a school district's tax cap. 

"The 2 percent tax cap is not really a 2 percent tax cap," said NYSSBA Executive Director Timothy G. Kremer. "The quirks and vagaries of the cap formula mean it can fluctuate widely from year to year and district to district. It's time for truth in advertising: Make the tax cap growth factor a true 2 percent." 

This year, 36 districts will attempt a tax cap override, compared to 18 last year. Districts seeking to override their cap need a 60 percent "supermajority" voter approval to pass their budgets. 

In addition, 95 districts had negative tax levy caps, meaning they cannot increase their tax levies from a year ago by even one dollar without obtaining 60 percent approval. 

Historically, the passage rate for districts needing a supermajority has been dramatically lower than those needing a simple majority. Since 2012, the first year the tax cap was in effect, slightly over half of budgets that sought overrides were approved. By comparison, budgets needing a simple majority passed about 99 percent of the time. 

The number of districts seeking overrides would have been much greater had state lawmakers not adopted a state spending plan that increased aid to schools by about $1.5 billion. 

Statewide, the average tax levy increase is 0.7 percent, compared to 1.5 percent last year. The average total spending increase is 2.1 percent, compared to 1.8 percent last year.



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