Falling Into the Gap: Tax Cap Hurting Local School Districts

(WETM-18) – We’ve looked at how the Gap Elimination Adjustment is hurting local school districts. But on top of the GEA is the tax cap. Put in place in 2011 by Governor Andrew Cuomo and the state legislature, the tax cap looked to limit the growth of the state’s already high property taxes.

The tax cap for schools is calculated by an eight-step formula. Here is that formula.

Prior school-year tax levy X Tax base growth factor + PILOTs received in prior school year – Tax levy to pay for some court orders/judgments – Tax levy to pay for local capital costs X Allowable levy growth factor – PILOTs receivable in coming school year = Tax levy limit.

If that looks confusing to you, you’re not alone. Local superintendents are confused as well. “It’s a very convoluted formula and multiple step calculation that you have to go through to determine what your tax cap is, which is different in every school district around the state,” said Mary Beth Fiore, Superintendent of Schools at Elmira Heights.

Superintendent Dr. Joe Morgan of Spencer-Van Etten was preparing a budget to try and go over the tax cap to keep essential programs going before getting more state aid in the budget. He says the complexity of the tax cap formula makes it difficult for districts to prepare for the future. “So there are a number of payments that are out of our control that come into play when we're building a budget,” said Dr. Morgan. “They're difficult to predict for the future.”

Senator Tom O’Mara says he supports the tax cap because he feels property taxes in New York are too high. But superintendents point out that school taxes are the only tax levy in the state voted on every year by the people.

Sen. O’Mara has pushed legislation for three years to tweak one part of the formula related to how payments in lieu of taxes, or PILOTs, are calculated. “I can tell you that Governor Cuomo has shown no interest in trying to meddle with the tax cap formula,” said O’Mara.

Superintendents say they are doing the best they can with the hand they have been dealt, and are continuing to try and provide the best possible education for students in the area.

“At the end of the day, we're coming to work, we're trying to keep our children safe, we're trying to provide them with a sound education and do the best that we can in the midst of chaos around us,” said Fiore.

“The Governor is getting exactly what he wanted, and that is to squeeze districts and public entities out of business,” said Tom Phillips, Superintendent of Schools at Watkins Glen.

So where do schools go from here? Superintendent Fiore says the only reason schools have gotten back the money they have so far under the GEA is because of tireless advocacy in Albany. Senator O’Mara says he hopes to have the GEA off the books in two years. The Greater Southern Tier BOCES says they don’t expect it to be completely eliminated under the 2019-2020 school year.

School budget votes are held on May 20th.

Part 1: Gap Elimination Adjustment

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