Tax Cap Levy Discussion

  • Deborah A. Coder, Assistant Superintendent for Finance and Management Services
    February 7, 2018

    Current Expenditure Budget

    • As of February 7, 2018 – The 2018-2019 Expenditure Budget amount is:
    • $100,174,970 or 3.47% above last year. Net expense reductions of $ 777,457 have been made as a result of upcoming retirements and resignations. 

    Summary of Changes to Expenditure Categories

      • Six (6) Elementary Positions
      • Two (2) Secondary Positions
      • Two (2) Special Education Positions
      • Five (5) Special Area Positions
      • One (1) Administrator Position
      • Three (3) Support Staff Positions

    Net Employee Salaries/Benefits increases were: $2,057,270
    Net Employee Salaries/Benefits increases now: $1,279,813
    Expenditure Budget decrease of: $777,457

    Summary of Changes to Revenue Budget

      • Projected Reserve usage was: —$2,145,958 
      • Projected Reserve Usage is now: —$2,629,047
      • Revenue Budget increase of: —$483,089
      • Tax Levy Cap was: —$758,796
      • Tax Levy Cap now: —$758,796
      • Tax Levy Cap decrease of: $0
    • Revenue Budget Net Increase $483,089

     2018-2019 Tax Levy Impact

    • Current Expenditure Budget  $100,174,970
    • Preliminary Revenue Budget  $60,780,440
    • Preliminary 2018-19 Tax Levy Needed  $39,394,530
    • 2017-2018 Current Tax Levy  $37,658,476
    • Preliminary Tax Levy Increase   $1,736,054

    2018-2019 Tax Levy Limit Calculation

    • Simple Majority Limit is 2.014941873739130% or $38,417,272
    • Current Tax Levy Amount is $39,394,530
    • This budget is OVER the Tax Levy Limit by $977,258

    Next Steps

    • By March 1st, 2018 the district must certify with the Office of the State Comptroller the estimated tax levy increase for the 2018-2019 fiscal year.
    • The district must also declare its intentions in this certification on whether or not it intends to exceed the Tax Levy Limit Cap.
    • If the district exceeds the cap it must have a 60% or greater passage rate at the May budget vote.

    Property Tax Cap Legislation


    School districts generally may not adopt a budget that requires a tax levy that exceeds the prior year's levy by more than 2% or the rate of inflation, whichever is less, unless they officially override the tax levy limitation.

    The Tax Cap is Not Always 2%

    • The allowable levy growth factor is equal to the lesser of 1.02 or 1 plus the inflation factor.
      • Inflation factor calculation is defined by law
    • School Districts have an allowable levy growth factor of 1.0200 for the 2018-19 fiscal year.

    Calculation Involves Several Components

    • Prior Year Levy
    • Allowable Levy Growth Factor - 2% or rate of inflation, whichever is less
    • Tax Base Growth Factor
    • PILOTS
    • Carryover
    • Exclusions (Capital, Retirement and Torts)

    Override For School Districts

    • The law allows school districts to override the levy limit.
    • If a district intends to override the tax cap law, a ballot statement must be included.
      • At least 60% VOTER approval required.
      • If an override budget fails to get 60%, the school district can:
        • Resubmit the original budget (requires at least 60% voter approval when it's an override budget)
        • Submit a revised budget
          • If revised budget contains a tax levy within the levy limit, then only 50% voter approval required but if the revised budget seeks to override the levy limit, then at least 60% voter approval is required.
        • Go to a contingency budget (0% levy growth)

    Reporting Requirements

    • School District CFOs must calculate the tax levy limit and report the data elements to the State.
      • Must use OSC's form to report.
      • User IDs and Password are required to access and submit forms.
      • Form must be submitted by March 1st.
    • Report must be submitted even if an override is planned.

    Property Tax Relief Credit


    • Property Tax Relief Credit
      • Tax Law Section 606 (n-1)
      • Provides a Real Property Tax Credit to qualified taxpayers between 2016-2019
    • Program only applies to School Districts and the Big 4 Cities (Buffalo, Rochester, Syracuse and Yonkers)
    • To qualify for the credit
      • School District must certify that tax levy is within the levy limit
        • Certifications is submitted in the same portal as the Tax Cap form (OSC Online Services)
          • Click on link for Tax Cap Compliance
        • Certification is due by July 21st.
      • Qualified taxpayers must:
        • Live in a school district that is complying with the tax levy limit law
        • Receive the Basic or Enhanced STAR property tax relief
        • Have an income of $275,000 or less

    What does this mean for Lockport

    • Scenario #1 Increase Revenue
      • 2018-2019 State Aid Increase: $1,332,600
        • If 2018-2019 State Aid DOES NOT increase: $0     
          • Current amount over tax levy limit: $977,258
          • Amount needed to adhere to tax cap: $977,258
    • Scenario #2 Reduce Expenditures
      • 2018-2019 Expenditure Increase: $ 3,356,503
        • Current amount over tax levy limit: $977,258
        • Amount needed to adhere to tax cap: $977,258