UTICA — The 2 percent tax cap just got lower.
This year, the state-imposed property tax cap will be 1.66 percent due to a decline in inflation.
“For those communities that want to live within the cap, it’s going to put even more pressure in terms of limiting growth,” said state Comptroller Thomas DiNapoli, who set the cap earlier this month for local governments whose budgets are in line mostly with the calendar year.
The city of Oneida isn’t taking any chances.
On Tuesday, the Common Council voted to override the cap following a public hearing where “nobody said a word about it,” said acting Mayor Max Smith.
“It’s a precautionary step,” he said of the override.
Smith said the cap puts added pressure on the city to keep taxes from rising when “everything we do costs more every year.”
In Rome, overriding the cap isn’t as easy.
The Common Council rejected Mayor Joseph Fusco’s proposed override last year.
“It certainly is an option, but it’s an election year and nobody wants to raise taxes,” Fusco said. “But we still have bills to pay.”
Fusco said the cap makes preparing for the future difficult.
“We should be in a mode where we raise taxes a little bit and start stowing away some money for some problems we got coming down the road,” he said.
Peter Baynes, New York Conference of Mayors executive director, said the lowered cap increases the expectation of taxpayers, “but it doesn’t give local governments the tools to meet those expectations.”
Those tools would be more mandate relief, a fairer collective bargaining system for negotiating sustainable contracts with unions and predictable increases in state aid, he said.
State aid to local governments is down 7 percent over the last five years, he said.
For local school districts, which put budgets up to vote in May, the cap won’t be set until January, though it is expected to be close to 1.66 percent.
“It means less money for schools, their being able to raise less funding from local resources,” said Michael Gorges, executive director for the New York State Association of School Business Officials.
With pension and health care costs increasing, that could mean more cuts to education, he said.
The tax cap, he said, is unsustainable.
“That’s why many school districts are facing educational or financial insolvency,” he said.
Mark Vivacqua, Herkimer-Fulton-Hamilton-Otsego BOCES district superintendent, said the tax cap is less of an issue in Herkimer County, because the schools are so dependent on state aid.
“The wealthier the school is, the more the tax cap is an issue because more of the revenue comes from property taxes,” he said.
Page 2 of 2 - Many of the county’s schools’ levy limits actually were in the double digits, he said. The tax cap for schools is determined by a complicated formula, with exemptions for things such as growth in pension costs.
But he said the lowered cap still will pose an additional challenge for local schools.
“The lower the starting point, the more difficult it is to raise revenues,” he said.