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Cuomo's tax cap, and what it could mean

A few weeks ago, governor Cuomo was in Syracuse advocating for passage of a bill in the New York General Assembly that would limit property tax growth to two percent yearly, or the rate of inflation, whichever is less, for school districts.

Local voters could override the cap with a 60 percent vote. Provisions in the governor's proposal would not apply to any increase in taxes necessary to support a PILOT or payment in lieu of taxes agreements, any local share of capital expenditures, or any personal injury settlements that exceed 10 percent of the local government's total budget. For the most part, Sheldon Silver's plan is similar to the governors, but he would exempt pension payments exceeding 2-percent growth over the prior year's expense or court judgments exceeding 5 percent of the total levy from the previous year.

It has been argued that elimination of several state mandates would generate additional revenue to school districts, negating the loss of any funds due to a tax cap. Unless New York state revises some of the regulations relative to special education, I do not envision any sizeable savings from mandate relief. New York state special educations regulations are among the most demanding and expensive of all the states.

After three years of significant state aid decreases, amounting to approximately $19.7 million for the North Syracuse Central School District, there has been some speculation that state aid will increase by four percent next year. I am cautious about such an increase, but that would certainly be a positive for North Syracuse. Let's assume that the 4 percent does occur and results in a $1.4 million aid increase.

One of the major negative offsetting the aid increase is that school districts nation-wide will lose the federal Jobs Fund money, effective June 30, 2012. For North Syracuse, that would be $3.1 million, putting the school district behind the eight ball by $1.7 million, without considering any normal increases on top of that. Also, the school district has to make up a one $1 million loss on the fund balance and a $1.1 million loss in debt service reserves.

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