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Tax-cap discipline

The four-year extension of New York’s property tax cap was one of the better things to come out of the just-concluded legislative session—not as good as making it permanent, but surely better than allowing it to expire.

As noted here last month, the cap is very popular with New Yorkers, and for good reason. A recent Empire Center study shows that since the cap was put in place, property tax levies have increased an average of 2.2 percent annually, versus an average rate of 6 percent a year over a three-decade period. For property owners in the Finger Lakes region, that has meant savings of $490 million.

The cap does not ensure fiscal responsibility, however. Even 2.2 percent might be out of line, say, if the inflation rate is half that and school enrollments are declining.

The Empire Center made just that point when it released its 2015 School Budget Spotlight. Its analysis showed that while only 18 of nearly 670 districts outside of New York’s five largest cities proposed tax levies that exceeded their caps, almost half proposed levies falling within $1,000 of their caps.

At the same time, districts project a 0.6 percent decline in school enrollments while increasing per-pupil spending by 2.5 percent, almost double the projected inflation rate.

In Monroe and Ontario counties, data filed with the state show, only a handful of 26 districts (excluding Rochester) forecast flat or higher enrollment. Overall, enrollment is expected to decrease by 1.3 percent in Monroe County and 1.9 percent in Ontario County.

Yet the budgeted change in per-pupil spending in the Finger Lakes region was 3.2 percent, second highest among regions statewide.

“Taxpayers (statewide) are going to be spending more money to educate fewer children,” said Tim Hoefer, executive director of the Empire Center. “The property tax cap is doing a great job of controlling the growth of the burden on local taxpayers, (but) school districts need to do more.”

The cap should be the starting point—not the finish line—for budgetary discipline.

7/10/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.


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