Municipalities face 1.66 percent tax cap for 2014
CHENANGO COUNTY - New York State Comptroller Thomas DiNapoli has announced that for the first time since the implementation of the state mandated 2 percent tax cap, the state’s inflation rate has fallen below 2 percent, meaning local towns and municipalities will face a 1.66 percent tax levy cap as they prepare their 2014 budgets.
Under the state’s real property tax cap law, enacted in 2011, municipalities are limited to a 2 percent tax increase or the rate of inflation, whichever is lower. The actual levy cap adjusts annually with the consumer price index.
Although a 1.66 percent limit on a tax levy increase seems more burdensome, some area municipal bookkeepers say it makes little difference as they compile numbers for the 2014 fiscal year.
“The formula allows for some adjustments,” explained Chenango county Treasurer William Craine, noting other sources of revenue including local sales tax for the county that prevent significant property tax rate increases.
Likewise, leaders in the City of Norwich say a more restrictive tax cap has little impact as they begin the budgeting process for 2014.
“The situation is, we have to the best budget possible, irrespective of the tax cap,” said City Finance Director William Roberts.
According to City Mayor Joseph Maiurano, the most challenging obstacle facing the city are unfunded mandates and the increase in healthcare and retirement costs for municipal employees - the same challenges faced by local municipalities all over the state.
“Our goal has always been not to raise taxes,” said Maiurano. “What we will do is take control of everything we have control over and do the best we can with it.”
Local governments can still override the tax cap with a 60 percent super majority vote. – Shawn Magrath
Under the state’s real property tax cap law, enacted in 2011, municipalities are limited to a 2 percent tax increase or the rate of inflation, whichever is lower. The actual levy cap adjusts annually with the consumer price index.
Although a 1.66 percent limit on a tax levy increase seems more burdensome, some area municipal bookkeepers say it makes little difference as they compile numbers for the 2014 fiscal year.
“The formula allows for some adjustments,” explained Chenango county Treasurer William Craine, noting other sources of revenue including local sales tax for the county that prevent significant property tax rate increases.
Likewise, leaders in the City of Norwich say a more restrictive tax cap has little impact as they begin the budgeting process for 2014.
“The situation is, we have to the best budget possible, irrespective of the tax cap,” said City Finance Director William Roberts.
According to City Mayor Joseph Maiurano, the most challenging obstacle facing the city are unfunded mandates and the increase in healthcare and retirement costs for municipal employees - the same challenges faced by local municipalities all over the state.
“Our goal has always been not to raise taxes,” said Maiurano. “What we will do is take control of everything we have control over and do the best we can with it.”
Local governments can still override the tax cap with a 60 percent super majority vote. – Shawn Magrath
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