In July of 2016, New York Comptroller Tom DiNapoli announced that local governments in New York State may only raise their property-tax levies by no more than 0.67 percent unless they vote to override the state’s cap. This is a slight decrease from 2016. Currently, the cap for local government in the state of New York is 0.73 percent this year, and thus will remain below 1 percent again in 2017.
New York legislators enacted the cap in 2011, which only permits local governments and school districts to annually increase the total amount of property taxes by no more than the lower of 2 percent or the inflation rate. Since inflation has been flat and steady since its enactment in 2011, property taxes have been below 2 percent in this entire five-year period of time. While low inflation positively affects the bottom line for consumers, it also presents an uncertain economic picture. However, to deal with revenue shortfalls, school boards and legislatures may exceed the cap if at least 60 percent of their members vote for overriding it.
Thus, local governments in New York must plan their budgets knowing there is extremely limited growth for property taxes if they stay within the cap. This isn’t all that new since local officials have faced growing fixed costs and limited budget options for years, but 2017 will necessitate continuing difficult financial choices.
The New York State Association of Counties has issued its findings that the low cap will result in the reduction, or even elimination, of some services. In the past five years, counties have liquidated assets and depleted other reserves to meet and compensate for these tax cap requirements. Those opposed to the cap have attempted to change it to a flat 2 percent limit on levy increases, but so far have been unsuccessful.
If you are an individual or business in the New York or Tri-State area and have any question about taxes, especially in planning ahead for the next filing season, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation call 212-490-0704.
