The legislation establishes a limit on the annual growth of real property taxes levied by local governments and school districts. The cap is not directly applicable to property tax rates, or to the assessed value of real property.

The tax levy limit is a separate limitation on the amount of the tax levy, and is a restriction on fire districts that is in addition to the spending limitation. Fire districts must meet the requirements of both.

The tax cap is a restriction on the year-to-year increase in the tax levy, while the constitutional tax limit is a restriction on the total amount of the levy in any single year. Therefore, the tax levy limit is a separate restriction imposed upon counties, cities and villages that is in addition to the threshold constraint of the constitutional tax limit. Counties, cities and villages must meet both requirements.

Special districts that have separate, independent elected boards and which have the authority to levy a tax, or can require a municipality to levy a tax on its behalf are subject to the tax levy limit and are not part of the municipality’s tax levy limit. Therefore, these special districts must submit the report form to OSC before the board of commissioners adopts the special district’s budget, regardless of when the town adopts it budget.

No. BIDs do not have separate, independent elected or appointed boards which have the authority to either levy a tax or require a tax to be levied on their behalf. Therefore, levies for BIDs must be incorporated into the municipality’s levy limit.

No. Fire protection districts (as opposed to fire districts) are not governed by separately elected or appointed governing boards that can levy or require the levy of taxes on behalf of the district. Therefore, levies for fire protection districts are part of the town's tax levy limit.

In accordance with guidance provided by the New York State Division of the Budget, a library (such as a special legislative district public library, school district public library, a municipal public library, or an association library) has its own tax levy limit if it (i) has a separate, independent elected or appointed governing board, and (ii) can require a municipality or school district to levy a tax on its behalf (which includes, where applicable, a tax levy approved by voters). To the extent the budget of a library is comprised of revenues generated by a tax levy of a municipality or school district that the municipality or school district is required to impose on behalf of the library, those tax revenues fall within the tax levy limit of the library. To the extent the budget of that library is comprised of revenues generated by the taxing authority of a municipality (such as a town or village), and that municipality is not required to impose that tax levy on behalf of the library, those tax revenues fall within the tax levy limit of the municipality. The library’s tax levy limit may be overridden by a resolution approved by a 60% vote of the total voting power of the library’s governing board. If the library governing board overrides the tax cap and the library budget or taxes to support the library is subject to voter approval, the proposition must be approved by only a simple majority of the voters (i.e. more than 50%), unless, in the case of a special act library district, it is otherwise provided in the special act creating the district.

No. Relevies of delinquent taxes and levies of delinquent user fees are not subject to the tax levy limit of the local government which relevies or levies the charges. Delinquent school taxes were already subject to a school district’s levy limit. User fees are not taxes subject to the levy limit. In each case, the relevy or levy process is simply a mechanism to collect delinquencies, but does not change the character of the charge for purposes of the levy limit.

No. Your prior year levy should consist of the amount of taxes levied in support of your local government or school district’s budgeted expenditures for that fiscal year. There is no authority to adjust the levy for tax refunds made during the prior year.

OSC will pre-populate the prescribed report form with the appropriate allowable levy growth factor. The allowable levy growth factor is 1.02, or the sum of one plus the “inflation factor,” whichever is less. The inflation factor is based on a calculation that uses the consumer price index all urban consumers – unadjusted (CPI-U) published each month by the Bureau of Labor Statistics.

Inflation and Allowable Levy Growth Factors for Fiscal Years Beginning in 2012
Fiscal Year	Inflation Factor	Allowable Levy Growth Factor
Jan 1, 2012 - Dec 31, 2012	2.01%	2.00%
Mar 1, 2012 - Feb 28, 2013	2.43%	2.00%
Apr 1, 2012 - Mar 31, 2013	2.65%	2.00%
Jun 1, 2012 - May 31, 2013	3.04%	2.00%
Jul 1, 2012 - Jun 30, 2013	3.16%	2.00%
Aug 1, 2012 - Jul 31, 2013	3.26%	2.00%

The tax base growth factor is derived using a “quantity change factor,” which is calculated by the Department of Taxation and Finance. The Department of Taxation and Finance will provide each local government with the applicable tax base growth factor, if any. This information is also available on their website.

Please contact the Department’s Solutions Center at (518) 591-5233 if you have questions on how this figure is calculated.

No. The tax levy limit is calculated based on the combined total levy for all funds for which the town board determines the amount of the levy, including the highway fund and funds for special districts that are governed by the town board.

The figure should be based on a good faith estimate of the amount receivable. You should use the same process that you use to estimate your PILOTs receivable during budget development. Most local governments that receive PILOTs estimate the amount receivable pursuant to their respective PILOT agreements. However, if the Office of the State Comptroller finds upon audit that a local government has levied in excess of the tax levy limit, the local government must place an amount equal to the excess amount of the levy in reserve.

Yes. The tax cap is based on all payments in lieu of taxes, and does not distinguish between PILOT amounts that are based on assessed value, or some other methodology.

The tax levy limit should be calculated on the combined total levy for all funds and special districts that fall under the municipal levy. For additional guidance on which special districts are incorporated in the municipal levy, please see “Property Tax Cap: Guidelines for Implementation” [pdf] issued by the New York State Department of Taxation and Finance.

Please call the Comptroller’s office. You may contact us through your regional office [pdf].

Yes, all transfer of functions for which the costs and savings have not been factored into the tax levy (e.g., those taking effect after the levy was established for fiscal year ending in 2011) must be reported to OSC. The effects of any transfer of function beginning in 2012 must be included in your calculation of your tax levy limit. If you do not report this transfer and are later audited and discovered to have levied in excess of your levy limit because of this omission, your government could be required to put the excess levy into reserve.

Pursuant to the guidance issued by the Department of Taxation and Finance (“The Property Tax Cap: Guidelines for Implementation” [pdf]), the total levy, including the levy for excludable expenses or the higher levy resulting from a successful override, becomes the base for the following year’s tax levy limit calculation.

If the annual debt service associated with the bonds or notes issued for this expense exceeds 5 percent of the prior year’s levy (starting with the fiscal year beginning in 2012), you may utilize this exclusion.

No. The law does not require any adjustments to the prior year levy under these circumstances.

The law provides a limited exclusion for expenditures resulting from court orders or judgments arising out of tort actions that exceed five percent of the total tax levied for the prior fiscal year.. This exclusion applies beginning for the 2012 fiscal year. The formula also includes an adjustment (subtraction) based on the tort exclusion from the tax levy limit for the prior fiscal year. Since there was no tax levy limit in place for the fiscal year beginning in 2011, there is no adjustment (subtraction) for the 2012 fiscal year. This adjustment will be made in the tax levy limit calculation for fiscal years beginning in 2013 and will be reflected on our form at that time.

No. The exclusion relates to court orders or judgments arising out of tort actions. An administrative consent order would not fall into this category.

No. A county, city, town or village must enact a local law to override the tax levy limit that is based on the combined total levy for every fund and special district that falls within the municipal levy limit. If the levy for one special district included within the municipal levy limit increases by more than the allowable growth, but does not cause the total municipal levy to exceed the levy limit, then no local law overriding the limit is needed.

Yes. In accordance with the guidance issued by the Department of Taxation and Finance and the Department of State, the tax levy that supports the operations of a special district that is “established, administered and governed by the governing board of another municipality,” is part of that municipality's tax levy and is subject to the municipality's overall property tax cap calculation. Therefore, under this guidance, the exception for a newly established local government does not apply and the levy for the special district is not exempt from the tax cap in the first year.

A unit based benefit assessment is subject to the limit. Special assessments (benefit assessments) and special ad valorem levies imposed within a town or county district are both included in the definition of "tax" in Chapter 97 of the Laws of 2011. Therefore, a benefit assessment, whether based on units or some other formula, constitutes a tax for purposes of the tax levy limit calculation. As noted earlier, however, user fees are not taxes subject to the levy limit. In limited circumstances, a user fee also may be properly based on units. It can sometimes be difficult to differentiate between a unit based benefit assessment and a unit based user fee. As a general guide, a special assessment is imposed on an assessment roll, against benefited properties within the district, in proportion to the benefit received by the property. A user fee is a contractual charge to district users and must bear a rational relationship to the amount of use. If you are uncertain whether a certain charge is a special assessment or a user fee, you should consult your attorney. Our legal staff is also available at (518) 474-5586 for assistance.

Yes. There is no exclusion in the tax cap legislation for the taxes attributable to the prior fiscal year.

Yes. RPTL 726(1)(a) generally requires a county to pay the entire amount of a certiorari refund and to charge back to towns etc. their shares of the refund. Under RPTL 726(4), unless a town bonds its share of a tax certiorari refund, the town is required to raise the money to reimburse the county in its next annual budget. Therefore, the amount charged back to the town is subject to the town's levy limit for the following year.

Your levy is only the amount that was approved by voters within the school district. To the extent that the municipality levies taxes within the municipality to support the expenditure made pursuant to its contract with you, that is part of the municipality’s levy limit.

Since the library board is, in effect, requiring a levy through the ballot process, you are, indeed, subject to the levy limit every year. However, only the amount approved by the voters is subject to the library’s levy limit. Any amount that the municipality provides above that amount voluntarily is part of the municipality’s levy limit.

In this case, you would enter a "0" as your prior year levy. As a result, it is likely that the voter approved levy will exceed the calculated limit. Therefore, the library governing board must enact a resolution to override the tax levy limit.

Under such circumstances, the allowable levy limit will be determined by the Office of the State Comptroller. The successor government is not expected to complete the online tax cap form. To date, OSC has determined allowable levy limits for the following entities involved in dissolutions:

Name of Dissolved Local Governments(s)	Effective Date of Dissolution	Name of Successor Local Government(s)	2012 Allowable Levy Limit (as determined by OSC)
Village of Perrysburg	December 31, 2011	Town of Perrysburg	$653,852
Village of Randolph/Village of East Randolph	December 31, 2011	Town of Randolph	$984,379
		Town of Conewango	$382,123
Village of Seneca Falls	December 31, 2011	Town of Seneca Falls	$3,913,440
		Bridgeport Fire District	$448,627

When an excess tax levy has been identified and set aside in reserve, the law requires that the excess levy plus any interest earned must be used to offset the tax levy in the coming fiscal year. There are two steps involved in order to accomplish this:

1. The Form: OSC’s online report form will include a dedicated field that captures the total amount the unit had to place in reserve. Once the user enters that figure, it will automatically get subtracted from the amount in the "Prior Fiscal Year Tax Levy" field—before the tax base growth factor is applied. In the example [pdf], the unit had to put $10,000 in reserve in FYE 2012. Therefore, for the FYE 2013 calculation, the user would enter $10,010 (which includes interest earned) in the appropriate field. The resultant levy limit in this example is $105,444.
2. Offsetting Tax Levy: Once the total level of property taxes needed to support the budget for the coming year is set, the amount in reserve ($10,010) must then be used to offset the property taxes that will be levied for the coming fiscal year. That means that the entity would only have to levy the remaining $95,434.

In the following year’s calculation (FYE 2014 in this example) the starting point for the 2014 calculation (""prior year levy" field) will equal the prior year tax levy, irrespective of the $10,010 reserve amount. However, a local government is not precluded from using a lower prior year levy number which is net of the reserve offset, if they so choose.

Note: for detailed instructions as to the actual accounting treatment and required journal entries associated with the placing of excess levy into reserve, please consult OSC’s accounting bulletin [pdf] on the topic.

Yes. If the total property taxes levied was less than the tax levy limit in the prior year, a local government or school district is permitted to carryover up to 1.5 percent of the prior year levy limit. In accordance with guidelines [pdf] issued by the Department of Taxation and Finance, there is no carryover permitted for unused exclusions associated with growth in pension costs or tort judgments.

When counties provide certain services to municipalities, they can recover costs in one of two ways: the county can either elect to bill a municipality directly or add the amount to the county levy specific to a municipality. For purposes of calculating the levy limit, the charge-back amount should be reflected in the tax levy limit of whichever government levies the tax. Therefore:

• When the county bills the municipality, the charge becomes part of the municipality’s tax levy limit because that municipality will raise taxes to pay the bill.
• When the county levies the charge under the county’s own taxing authority, the charge becomes part of the county’s tax levy limit.

A county can switch between billing and using its own levy to recover its charge back costs. It is the responsibility of the county and the municipalities involved to properly report charge-back amounts with respect to their levy limit calculations. Failure to properly report charge back amounts in levy limit calculations may lead to an entity exceeding its levy limit and having to place the excess in a Reserve for Excess Tax Levy.

In cases where a county adjusts the municipal tax levy by adding the charge-back to the municipal levy, the amount of the charge back should be included in the county tax levy for purposes of calculating the county’s levy limit. Once the county places a tax, under its own taxing authority, on the tax bill it is considered a county tax.

When a town decides to use their sales tax allocation to offset the county portion of real property taxes levied to taxpayers in that town, for tax cap purposes, where all or a portion of a town’s sales tax allocation is applied to reduce county taxes, such amount must be subtracted from the county’s tax levy.

"Omitted Taxes" is a broadly used term for several types of real property tax adjustments that are billed in a subsequent year, such as a change in property ownership that also changes the status of the property from exempt to non-exempt. In that instance, the new owner is responsible for the pro-rated portion of the taxes on the property for the rest of the tax year, but that pro-rated amount is not billed to the new owner until the next tax billing cycle.

Taxes imposed for the prior fiscal year pursuant to Real Property Tax Law §520 (assessment and taxation of exempt property upon transfer of title) or pursuant to Real Property Tax Law §551 (entry by assessor of omitted real property on current assessment roll) should be included in the total levy for the upcoming fiscal year as there is no exclusion in the tax cap legislation for the taxes attributable to the prior fiscal year.

The total amount of taxes levied on the tax rolls, including omitted taxes, should equal the levy adopted in the budget. In other words, the property taxes to be levied for the upcoming fiscal year plus omitted taxes (even though levied at prior year tax rate) should be the value used in the calculation of the tax levy limit. Omitted taxes levied should be included in the “prior year levy” field as well as in the “proposed levy” fields in the tax cap form.

For example: a municipality passes a budget requiring a total tax levy of $1,000,000, which includes $900,000 in property tax for the upcoming year, and $100,000 of omitted taxes. The tax roll should show $900,000 in tax levy for the upcoming year, and $100,000 in omitted taxes. Municipalities should ensure that the total of $1,000,000 is within the calculated tax levy limit and report this as the tax levy for the upcoming fiscal year.

The legislation does not provide for a general exclusion of “mandated costs”. The tax cap allows for only a limited number of exclusions to the tax levy limit for local governments, which are (i) costs resulting from court orders or judgments against the local government arising out of tort actions that exceed five percent of the total prior year’s tax levy, and (ii) pension costs associated with the annual growth in the “system average actuarial contribution rate” (for ERS and PFRS) and the “normal contribution rate” (for TRS) above two percentage points (view “Property Tax Cap: Guidelines for Implementation” [pdf] pages 6-8, for a more detailed explanation).

No. There is no statutory exclusion from the tax levy limit applicable to local governments for debt service on bonds or notes, even if the issuance of debt is voter approved. If the additional debt service expense, together with the district’s other non-excludable expenses, would cause the tax levy to exceed the levy limit, the governing board of the Fire District must pass a resolution by at least a 60% vote to override the limit.

No. The law (Chapter 97 of the Laws of 2011 [pdf]) only provides for limited exclusions as follows:

• Pension contributions due to increases in the statewide system average actuarial contribution rate (ERS or PFRS) or normal contribution rate (TRS) over 2 percentage points for major retirement systems.
• Expenditures resulting from court orders or judgments arising out of tort actions that exceed 5 percent of the total tax levied in the prior fiscal year.
• For School Districts Only: The tax levy to support capital local expenditures.

Any other expenses must be accommodated within the allowable levy limit, unless the governing body successfully overrides the levy limit.

Yes. The law allows you to perform separate calculations for each of the major retirement systems (ERS, PFRS and TRS). Please refer to the pension exclusion calculator for instructions on how these exclusions should be calculated.

Those local governments utilizing amortization may not levy for the pension exclusion pursuant to The Property Tax Cap: Guidelines for Implementation [pdf]. You may utilize the pension exclusion for any pension system for which you DO NOT amortize or plan to amortize any portion of the bill for that year. However, if you take the pension exclusion, you are not allowed to later amortize any portion of your pension bill for that fiscal year. If you levy an additional amount for the pension exclusion and you amortize a portion of your contribution related to that retirement system, you will have to place the levy raised due to the pension exclusion calculation into a reserve to reduce your next year’s tax levy.

The calculation is separate for each pension system, so if you choose to amortize the payments for one pension system, you may still utilize the pension exclusion for the system for which the payments are not amortized.

Please email the Retirement System at RTEmpSer@osc.state.ny.us, or call Beth Wicks at 518-474-9236 or Patricia Engel at 518-486-3921.

For the ERS and PFRS exclusion, you must use the projected salary base provided by the Retirement System online.

You will have to access the online system in order to determine your projected salary base for the ERS and PFRS system. The appropriate column to use is marked “Projected Salaries mm/dd/yyyy –mm/dd/yyyy”. The only time this is not the case is for calendar year entities that are NOT planning to prepay their bill in December, but will instead be paying their current bill in February. These would use the “Salary Estimates mm/dd/yyyy – mm/dd/yyyy”. Please find the pension exclusion calculator available here.

For the TRS system, you will have to estimate the salary base for your budget year. However, since the TRS system bills based on actual final salary figures for the school year just ended, this is less complex than for the ERS/PFRS system.

For the ERS and PFRS exclusion, you must use the projected salary base provided by the Retirement System online (see above). If you have any questions about these numbers, please email the Retirement System at RTEmpSer@osc.state.ny.us, or call Beth Wicks at 518-474-9236 or Patricia Engel at 518-486-3921.

For ERS and PFRS, you must use the projected salary base provided by Retirement (see above). If you have questions about what this includes, please email the Retirement System at RTEmpSer@osc.state.ny.us, or call Beth Wicks at 518-474-9236 or Patricia Engel at 518-486-3921.

No. Your cap will not be affected retroactively.

Since the pension exclusion is meant to offset the tax levy necessary to pay for an extraordinary increase in pension costs, if that increase is passed along to an “independent” special district, the portion of the exclusion should be passed along as well. This is accomplished by allocating the salary base or total exclusion according to the method used to allocate the bill.

Yes. The pension exclusion is not a required part of the levy limit calculation; it can increase the amount that can be raised by taxes without an override. However, we would encourage you to work toward changing your fiscal year or budget process in order to be able to have as much flexibility as possible under the levy limit in future years.

No. To the extent that your county’s salary base includes bases of special districts that are not subject to their own levy limits and a community college, they would be part of a single exclusion calculation.

There seems to be some confusion regarding the standards for financial reporting and budgeting. Financial reporting standards state the financial statements of a local government should be presented in accordance with GAAP. Budgetary practices, however, are outside the scope of financial reporting standards, and as such, budgets are often prepared on a non-GAAP basis. The budget is simply the financial plan that contains estimates of expected inflows and outflows of spendable cash resources for the coming fiscal year. The amount actually paid to each retirement system (ERS, PFRS and TRS) each year represents the amount due on the annual bill. Each local government should budget for an appropriation of this total during the fiscal year in which their retirement system bill will be paid and include in its tax levy the budgeted total of appropriations. Thus, the tax levy exclusion is based upon the fiscal year in which the tax would have to be levied in order to pay the full amount of the anticipated pension bill.

The law requires each local government, prior to adopting a budget, to submit to OSC the information necessary for calculating the tax levy limit, not the actual tax levy, for the coming fiscal year. The calculation of the tax levy limit does not change based on discretionary budgetary decisions. The tax levy limit is calculated based on factors that are generally known, including the prior year’s tax levy, the tax base growth factor, PILOTS receivable in the prior fiscal year and the coming fiscal year, the exclusion pertaining to excess expenditures related to tort actions for the prior fiscal year, the allowable levy growth factor and available carryover, if any. These factors would not change during the budget process. Only one submission of this information is required but amended submissions will be accepted.

The report form that we have developed, in addition to requiring information necessary for calculating the levy limit, also provides for submission of information relating to the local governments proposed tax levy and whether the governing body plans to override the levy limit. This information should be based on the proposed budget at the time the submission is made to OSC. The later in the budget process the information is submitted to us, as long as it is submitted prior to budget adoption, the more useful it will be.

Yes. Every local government, regardless of whether it intends to override, must submit to OSC on the required form the information necessary for calculating their tax levy limit.

Yes. The law requires that all local governments (unless it is a newly created local government) subject to the tax cap calculate their tax levy limit for the coming fiscal year and, prior to adoption of their budgets, file the information necessary for that calculation with the Office of the State Comptroller.

No. Local governments are responsible for calculating their own levy limit. For informational purposes, the form that we have developed will run the mathematical computation for you after you have input all of the required data elements as outlined in the law. After you have submitted your form, our system will also generate an email confirmation of your submission. However, this confirmation does not attest to the accuracy of the data elements input by each reporting entity.

If, upon entering the required elements, you do not agree with the tax levy limit that results from the application of the mathematical formula, you may contact OSC’s Division of Local Government and School Accountability at (518) 473-0006.

Note: OSC has post audit authority. If, upon post audit, OSC finds that a local government levied taxes in excess of the applicable tax levy limit, the local government, as soon as practicable, must place an amount equal to the excess in reserve. These funds, and any interest earned, must be used to offset the tax levy in the following fiscal year.

In this case, the town and village are separate local governmental entities and must report their tax levy limits to OSC separately, even if one of governments does not levy a tax.

This information is sent to the Chief Fiscal Officer of each local government. Generally, your form will be sent to you about 5 months prior to the start of your next fiscal year. If you have not received the information necessary to access the form within this timeframe, please call OSC’s Division of Local Government and School Accountability at (518) 473-0006.

Please visit our Property Tax Cap website at Local Government Training Unit website Real Property Tax Information or call (518) 473-0005.

Yes. Any local government that is subject to the levy limit must file, even if it does not levy a tax in that year.

No. Local governments who passed their budgets before the online form became available this year will not be penalized for reporting late. Please make sure you submit your form as soon as practicable.

According to the new law, you must file your levy limit information with the Comptroller’s Office before you adopt your budget. Since you cannot calculate that limit without the inflation factor, you cannot file the information until five months prior to the start of your fiscal year. Therefore, you will either have to change your fiscal year to coincide with the school year or, if feasible, hold your vote at a different time of the year.

When an excess tax levy has been identified, a series of accounting entries will be required. These entries assume that the local government or school district has already recorded the real property taxes levied for the current fiscal year's budget. The local government or school district will need to defer the recognition of revenues associated with the excess tax levy until the following fiscal year as required by the tax cap legislation. This deferral of revenue serves as the accounting mechanism for placing excess tax levy in reserve as required by the legislation. The amount of revenue deferred for excess tax levies should be placed in a separate interest-bearing bank account. The accounting entries can be found in our accounting bulletin "Reserve for Excess Tax Levy" [pdf]

Yes. The law provides that all local governments subject to the cap must calculate the tax levy limit for the coming fiscal year in accordance with the statutory formula. If the amount of taxes to be levied in the coming fiscal year exceeds the applicable tax levy limit and the allowable exclusions, then the local government must override the tax levy limit.

For local governments, the law does not specify particular language for the budget resolution, although it should be clear that it is for the purpose of overriding the tax levy limit for the coming fiscal year only. Specific language is required for school districts seeking voter approval on a budget that relies on a tax levy that exceeds the levy limit (Chapter 97 of the Laws of 2011 [pdf]). Please consult your attorney or speak with your local government association for more guidance on model local laws/language.

As per guidance issued by the Department of Taxation and Finance, a local government may not impose or cause the imposition of taxes in excess of their levy limit without first complying with the statutory override requirement. In an instance where a local government has an adopted or default budget that provides for a levy in excess of the allowable levy limit, and there is no proper override in place, the local government must take steps to reduce the amount of the tax levy to be within the allowable limit.

In general, the governing board should pass a resolution that reduces the amount of the tax levy to an amount that complies with the allowable levy limit. Since a local government generally cannot change its budget after the budget deadline has passed, it is recommended that a deficit reduction plan be adopted and the budget revisited after the beginning of their fiscal year.