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Office of the State Comptroller - Local Government & School Accountability

Local Government and School Accountability

Real Property Tax Cap Information

Frequently Asked Questions

Notice: The answers listed below supplement the guidance issued by the New York State Department of Taxation and Finance and the New York State Department of State: “Property Tax Cap: Guidelines for Implementation”. These answers are intended to assist in implementing the law. As new questions arise or answers need to be clarified, we will provide additional information. Some of the responses are derived from “Property Tax Cap: Guidelines for Implementation” [pdf].

With respect to which entities are subject to the new tax levy limit (commonly referred to as the “tax cap”), please see the “Guidelines for Implementation” referenced above. If you are uncertain as to whether or not you must complete a separate tax cap form for the entity in question, you should contact our legal department at (518) 474-5586 for assistance.

The Office of the State Comptroller (OSC) will be contacting all entities that have a municipal code assigned to them, as well as all entities that have in the past reported financial data directly to us or as a component unit of another government. We will provide you with a link to the report form, as well as a User ID and PIN. If you believe you are subject to the tax cap and need to fill out the report form, but do not have a municipal code already assigned to you, please contact us at (518) 473-0006.


Applicability

 Does the 2 percent cap on property taxes apply to tax levies, rates or real property assessments? Read Answer
 Fire districts are already subject to spending limits under section 176 (18) of the Town Law. How does this limitation differ from the tax levy limit? Read Answer
 Counties, cities and villages are already subject to a constitutional tax limit under article VIII of the State Constitution. How does this limitation differ from the tax levy limit? Read Answer
 Do special districts governed by separately elected commissioners but that include their budgets within the town budget have to report to OSC by November 20 when the town adopts its budget or when the commissioners approve the special district’s budget? Read Answer
 Are BIDS (business improvement districts) separately subject to the levy limit? Read Answer
 Are fire protection districts in towns separately subject to the levy limit? Read Answer
 Do libraries have their own tax levy limit? If so, how is the limit overridden? Read Answer

Calculating the Tax Levy Limit

 Are relevies of delinquent taxes and levies of delinquent user fees subject to the tax levy limit of the local government which relevies or levies the charges? Read Answer
 Is the prior year levy to be adjusted for tax refunds that are granted after taxes are levied? Read Answer
 How do I know my “allowable levy growth factor”? Read Answer
 How do I get my “tax base growth factor”? Read Answer
 Is the town tax levy limit calculated separately for the town-wide and town outside of village funds? Read Answer
 We will not know how much our PILOT payments will be for the coming fiscal year until our tax rates are set. How should I go about filling out this part of the form? Read Answer
 My municipality receives a payment made in lieu of real property taxes, but the formula by which the payment is derived is not based on the assessed value of the property or the tax rates. Are these types of PILOTs also included in the calculation of the tax levy limit? Read Answer
 Is the tax levy limit calculated based on the aggregate levy necessary for each fund or is the levy limit calculated separately for each fund? What if some of the funds have different tax bases and/or are not coterminous with the municipality’s boundaries (such as a town outside village fund, part town highway fund, or a water fund that covers only a portion of the town)? What if some of the districts have a different type of levy (such as per unit special assessment or an ad valorem tax) from the town or county’s base property tax levy? Read Answer
 I am not sure if my local government has been affected by a transfer of function. How do I find out if my change is a true transfer of function? Read Answer
 My local government has benefitted from a transfer of function. Do I need to report this to OSC? Read Answer
 If a local government’s total levy in the coming fiscal year is higher than the tax levy limit based on the allowable growth and tax base growth factors, either due to the additional levy for excludable expenses or an override, what is its base levy when calculating the tax cap in the next fiscal year? Read Answer
 How will the exclusion for certain expenses related to court orders or judgments work (tort actions only) if the cost has been financed? Read Answer
 I have a bond for a special district. The last payment was in 2011. When I calculate my levy limit for 2012, is my starting point the total taxes levied in 2011 less this amount? Read Answer
 The statutory formula for calculating the tax levy limit subtracts out large tort judgments “for the prior year,” yet I don’t see that in your form. Why not? Read Answer
 Is an administrative consent order, such as one entered into with the Department of Environmental Conservation, for violations of the Environmental Conservation Law or regulations (e.g. to remediate air or water pollution), covered by the court order/judgment language in the law? Read Answer
 Do we need a separate local law and/or resolution to override the levy limit for each fund or special district included within the overall municipal levy? Read Answer
 The statute provides that the tax levy limit generally does not apply to the first fiscal year after a “local government” is newly established. When a town establishes a new special district, governed by the town board, is the first year's levy for the new district included in the town’s tax levy limit calculation? Read Answer
 Is a unit based charge imposed to fund a town or county special district (e.g. sewer or water district) subject to the tax levy limit? Read Answer
 Are 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) included in the total levy for the upcoming fiscal year? Read Answer
 The county pays for tax certiorari refunds and then bills the town for the town's share. The town then includes an amount in its budget for the following fiscal year to cover the amount charged back by the county. Is the amount charged back to the town subject to the town's tax levy limit? Read Answer
 My library serves a school district and a portion of a municipality. We obtain voter approval for the school district portion but have a contract with the municipality for the portion of the library that serves the area outside the school district. What is my levy and do I need to report separately for the municipal portion? Read Answer
 We are a library that holds a vote when we want to raise the levy. In years when there is no vote, the town is only required to levy the amount needed for the funding passed by voters on the most recent ballot. Sometimes the town chooses to contribute more, at our request. Do we report a levy limit calculation every year, regardless of whether we hold a vote on the levy, and if so, what constitutes our "levy" in the intervening years? Read Answer
 My library had a levy vote through the process in Education Law § 259(1)(b) (a so-called "414" proposition) for the first time for the fiscal year beginning in 2012. I understand that I must calculate my own levy limit and report separately, but what do I use as my "prior year levy". Also, what if the levy driven by the voters exceeds the calculated limit? Read Answer
 When a local government dissolves, how does the successor government that will be assuming the debts, liabilities and obligations of the dissolved entity go about adjusting its allowable levy limit under the tax cap? Read Answer
 We set up a reserve after having identified an error in our property tax cap calculation from last year. How should we account for this reserve amount in our tax cap calculation for the coming year? Read Answer
 My local government overrode the property tax levy limit last year but levied less than the limit before any adjustments for exclusions. Can we still utilize the carryover amount? Read Answer
 How do charge-back arrangements affect the calculation of the levy limit for the county and/or municipality? Read Answer
 Some of the towns in my county have elected to use their sales tax allocation to offset the county tax levy. When calculating the levy limit for my county, how should I account for this? Read Answer
 What are omitted taxes? Read Answer
 How are omitted taxes accounted for in the calculation of the levy limit? Read Answer

Limited Exclusions

 How can a local government account for the cost of unfunded mandates (e.g., costs associated with health and safety or environmental compliance) in the tax cap calculation? Read Answer
 The voters in my Fire District approved a bond referendum. Is this additional voter approved expense exempt from the tax levy limit? Read Answer
 Will there be additional exclusions for emergency expenditures such as those resulting from Hurricane Irene? Are exclusions available for extraordinary expenditures related to the payment of tax certioraris, capital projects, debt service (including on bond issuances approved by the voters), payouts on large liabilities such as accumulated unused sick and vacation time to retirees; and projects required by DEC or another State agency? Read Answer
 Do I need to do a separate calculation to determine the additional levy for the excludable portion of each retirement system? Read Answer
 My municipality amortized our pension contribution in a prior year. How does this affect our ability to qualify for the pension contribution exclusion when calculating our levy limit for the coming fiscal year? Is it only applicable on the non-amortized portion of our bill? Read Answer
 If we amortized our pension contributions payable to one retirement system (ERS) and not another (PFRS), are we barred from utilizing the pension exclusion for both systems? Read Answer
 I did not receive a User ID or PIN to access the Retirement System’s salary base projections. Who do I contact for that? Read Answer
 Where do I get my salary base number? Which one do I use? Read Answer
 What if I don’t have / don’t agree with the projected salary base provided by the Employee or Police and Fire Retirement Systems? Can I use my own projection? With whom can I discuss the discrepancy? Read Answer
 What does the ERS/PFRS salary base include? Does it include LOSAP, overtime, “increases for a settled CBA”, FICA, longevity, or early retirement costs? Read Answer
 What if my salary base projection changes between the time I use it for calculating the pension exclusion and the time it is used to calculate my bill one year later? Can those affect my cap retroactively? Read Answer
 My town has a number of special districts that are separately subject to the cap, but which are included within our pension bill. We allocate a portion of the pension costs to the districts. Would we include the whole salary base within our own pension exclusion, or will we have to calculate the share that pertains to us only? If so, on what basis would we do that? Read Answer
 Our special district library must, by State law, enact its budget before our pension exclusion information is available, but after the inflation factor is calculated. The guidance issued by the Department of Taxation and Finance and the Department of State indicates that we may not estimate our pension exclusion. However, it may take some time until we can change our fiscal year, since our special act must be amended to do so. If we calculate our limit and file our limit information without the exclusion and either stay within that or pass a resolution to override, as necessary, are we in compliance with the law? Read Answer
 Our county’s retirement salary base includes county, community college and special districts. In order to utilize the salary base for purposes of the retirement exclusion, are we expected to break these out for each calculation? Read Answer
 It appears that the Comptroller’s Office is calculating the pension exclusion on a cash basis only and not the actual expenses, even though local governments need to budget for it and record it according to GAAP rules. Can you please explain? Read Answer

Filing the Levy Limit Calculation

 The local government budget process often results in many changes to the budget initially proposed. If the amendments made prior to final adoption of the budget change the estimated tax, which tax levy is to be reported to OSC or are multiple submissions required? Read Answer
 Does a local government have to complete and submit the form even if it plans to override the tax levy limit? Read Answer
 If a local government has not levied a property tax in the prior fiscal year (e.g., 2011), does it need to calculate (and report) a tax levy limit for the coming fiscal year? Read Answer
 Will OSC confirm my tax cap (i.e., tax levy limit) calculation? Read Answer
 How do coterminous town/villages report to OSC? Read Answer
 Who in my local government should receive the User ID and PIN information for the reporting system? When should they expect to receive access to the form? Read Answer
 How can I find out about other training on this topic? Can we arrange a training session? Read Answer
 Does a local government or independent special district need to file with OSC if it does not plan to levy taxes in the coming fiscal year? Read Answer
 Our budget was approved by our governing body on August 31st. The NYS OSC form wasn't available to input the information. Will we be penalized for filing late? Read Answer
 Our association library has a calendar year fiscal year, but its service area coincides with the school district. So, when we need voter approval for a levy increase, we do so on the school district’s ballot. However, in order to continue this in the future, we would have to adopt our budget before we will have information on the inflation factor. Can we continue to do this if we plan to pass an override resolution each year? Read Answer

Reserve for Erroneous Levies

 If I have to set up a reserve because of an error in the implementation of the property tax cap, what kind of reserve should I be setting up? Read Answer

Overrides of the Tax Levy Limit

 If a local government or a special district (not newly formed) governed by a separate independently elected board did not levy or cause the levy of any “taxes” in 2011 (including special assessments and special ad valorem levies), but will do so in 2012, will the local government need to override the tax levy limit in order to levy taxes in 2012? Read Answer
 What special wording is required on the budget resolution for voters to vote upon? Must it specify the actual monetary amount of the override and/or the specific districts for which the override is being passed? Will OSC provide suggested language? Read Answer
 A governing board of a local government has adopted a budget, or has a default budget (i.e. a budget by operation of law because the final budget was not adopted prior to statutory deadline), which includes a tax levy in excess of the allowable tax levy limit, without complying with the override requirements. What happens now? Read Answer