Tax Cap Leaves School Officials Uncertain

Gov. Andrew Cuomo signed the tax cap legislation into law last week, which will limit the amount New York State residents pay in school and property taxes. As Long Island schools are heavily supported by such payments, the Half Hollow Hills district is uncertain how its finances will be affected.

The cap, which will go into effect during 2012 fiscal years, ensures that local governments and school districts cannot raise their annual property tax levies by more than 2-percent or the rate of inflation, whichever is lower.

There are a few exceptions to the legislation in which the levy can rise above that level including annual average employee pension contributions required by law. School officials have that the mandates will continue to hike up the lax levy.

“A tax cap, with less state aid, without mandate relief will make for a very challenging time for Long Island schools - for some it will be devastating," said Christine Geed, spokesperson for the Half Hollow Hills School District. "The real impact of it all and what it means to Half Hollow Hills - well, we'll just have to wait and see."

One loop hole is that school districts can propose budgets that exceed the cap, but must get a 60-percent supermajority from voters, who would decide on their ballots over whether or not to give an exception.

There will also be a special Mandate Relief Council, which will act as an appeal body for local entities who make a case that the state requirements are too large of a burden on taxpayers.

Mandate relief was a large part of within the Half Hollow Hills School District in the wake of major cuts across Long Island schools. HHH was able to keep all of its programs for the 2011-2012 school year, but state required pension and health care premiums were the two largest culprits of tax rate increases, Victor Manuel, assistant superintendent of finance and facilities said during his

School officials have been concerned that a property tax cap without mandate relief would be a major blow to educational budgets.

"Without any kind of relief, your taxes are eaten up by pensions," Geed said. "You're done. It's finished."

While some tax increases are exempt from the legislation, the mandate relief does not include structural changes to employee benefits.

The district is waiting for the state to give a detailed list of mandate relief in order to judge how its schools will be affected.

"It's a belt-tightening time," Geed said. "We're relying on them now."

The preliminary mandate relief report is attached as a PDF.