January 09, 2012
DiNapoli Auditors Help Municipalities Comply With Tax Cap
Sample Identifies 43 Exceeded Tax Cap Inappropriately
More than 70 percent of local governments reviewed by auditors had adopted budgets with a property tax levy that was within the allowable limit, while 5 percent exceeded the cap inappropriately, according to an analysis by New York State Comptroller Thomas P. DiNapoli's office. In the last few weeks DiNapoli sent more than 200 auditors across the state to review the new budgets of 798 municipalities. A list of the governments that stayed within the cap can be found at:http://www.osc.state.ny.us/localgov/realprop/pdf/withincap.pdf.
In instances where auditors discovered that a local government was planning to levy an amount in excess of the limit without the required override vote, local government officials were advised to reduce the amount on the January 2012 property tax bills. For example, the town of Fairfield worked with DiNapoli's office to correct an error in its tax levy calculation and ensure that residents were not improperly taxed an additional $100,000.
Ten municipalities took corrective action after working with DiNapoli's office to save taxpayers from being improperly billed more than $280,000. This approach helped local officials navigate the new law and kept taxpayers from being improperly charged. For a list of the municipalities that took corrective action, go to http://www.osc.state.ny.us/localgov/realprop/pdf/reducedtaxes.pdf.
DiNapoli's auditors found that 177, or 22 percent, of local governments, passed a local law or resolution to override the property tax cap. A list of the governments that legally overrode the cap can be found here: http://www.osc.state.ny.us/localgov/realprop/pdf/overridelawresolution.pdf.
Of those visited, 28 percent had to rely on DiNapoli's office to calculate their tax cap for them.
New York State's property tax cap, enacted in June 2011, limits annual increases in the total amount of property taxes local governments and school districts can levy to either 2 percent or the rate of inflation, whichever is less, with some limited exceptions. All local governments and school districts subject to the cap are responsible for determining their tax levy limit and reporting that limit to the Comptroller's Office prior to budget adoption.
Under the law, if a local government exceeds the property tax cap without first enacting a local law or resolution to override the cap, the excess amount levied must be placed into a reserve and used to offset the taxes levied in the next fiscal year.
DiNapoli's office informed the municipalities that did not have the ability to fix the error prior to the printing of their tax bills that the amount levied in excess of the cap must be placed into reserve in January – the start of the local fiscal year.
Local governments file their information with the Comptroller's office based on their fiscal years and before they pass their annual budgets. School districts must file their information by March 1.
In an effort to increase transparency and accountability related to the tax cap, the Comptroller's Office will be making the property tax cap report submitted by every local government available on its Open Book New York site, www.openbookny.com, by the end of January.