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The Empire

New York localities struggle with tax cap pinch

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By Karen DeWitt, WXXI Capitol Bureau Chief

School boards and county leaders in parts of New York are warning voters they may need to override the newly enacted 2 percent property tax cap. Without an override there might not be enough money to pay for flood damage from two tropical storms as well as mandated state programs, they said.

The Association of Counties said as many as a dozen counties may begin the override process. Tompkins, Tioga, Chautauqua, and Rockland Counties are considering hearings, and St Lawrence County has held one already.

Governor Andrew Cuomo, a tax-cap champion, said the rules are designed to allow communities to make that decision for themselves.

“They can raise it to whatever they want it to be. That’s it. There is no big brother here,” he said.

But Steve Acquario of the county association said, “it’s a little bit more complicated than that.”

The tax cap law requires a complex set of steps to achieve an override. First, a supermajority of at least 60 percent of local elected officials must support the proposal for a new override law. Then public hearings must be held, with 30-days notice, to discuss the proposal. After that, the county lawmakers would vote, again needing a 60 percent majority to pass, before they can vote on the county budget.

While county boards generally support the tax cap, Acquario said the pressure of unfunded state mandates has made the cap untenable. He said state mandates account for up to 90 percent of some counties’ budgets.

And then there are the schools. Dave Albert, with the New York State School Boards Association, said schools in flood ravaged areas are already worried that they will need to ask for more than a 2 percent tax increase when their budgets are voted on next May. While the rules to override the cap for school spending are simpler, Albert said it might be difficult to convince enough school district taxpayers to come up with the extra money.

“You’ve got homeowners who themselves are facing major repairs in their homes, or even relocating, and whether or not they’ll be able to support a tax increase of any sort really is going to be a major question,” Albert said.

For that reason, he said school districts in flood damaged areas have been asking their state legislators to revisit the school aid portion of the budget, to steer more aid to those schools or speed up payments.

Steve Hancox, the state Deputy Comptroller for Local Government, said Comptroller Thomas DiNapoli’s office has been working with localities to help them negotiate the coming tax cap pinch. The storm damage costs have only made things worse, he said. “For a lot of localities they've gotten the opposite of short term relief," Hancox said.

Without some sort of mandate relief from Albany, Hancox warned, localities will continue to be hard pressed to make ends meet.  “When the tax cap was being discussed and passed, [Comptroller DiNapoli] talked about how tax cap had to be associated with significant mandate relief,” Hancox said. “That didn’t really happen.”

Additional reporting by Colby Hamilton