BILL NUMBER: S2277
SPONSOR: WEBB
 
TITLE OF BILL:
An act to amend the education law, in relation to limitations upon
school district tax levies
 
PURPOSE::
This bill ensures that no school district has a negative tax cap.
 
SUMMARY OF PROVISIONS::
Section 1: Paragraph b of subdivision 3 of section 2023-a of the educa-
tion law is amended.
Section 2: Provides for the effective date.
 
JUSTIFICATION::
Through the years of the property tax cap, dozens of school districts
have faced a negative tax cap. Due to the complex nature of the formula
and the number of factors used, school districts can be capped at a tax
levy that is actually less than the school district's tax levy in the
prior year, resulting in a "negative tax cap." This means that a school
district would have to cut their tax levy and any programs and services
those funds support or hope for a supermajority (60%) approval of their
budget by voters to simply keep their tax levy flat or at zero percent.
The prospect of a negative tax cap acts as a disincentive to many school
districts when it comes to finding budgetary efficiencies. For example,
if a district pre-pays debt related to construction of school buildings,
those savings would have a harmful effect on the district's tax cap,
potentially resulting in a negative cap.
The current process is also confusing to voters. The tax cap has been
advertised as a limit on the annual growth in property taxes, with a
supermajority needed to increase property taxes beyond that level.
School districts often struggle to explain to voters exactly why that
same supermajority might be needed to keep taxes flat or even decrease
taxes by an amount less than what a negative tax cap would allow. Adding
to the confusion is that voter approval for such budgets is only neces-
sary for school districts. Localities such as towns and counties approve
their own budgets, including tax cap overrides.
 
LEGISLATIVE HISTORY::
2021-2022: Bill referred to Senate Education Committee.
2017-2018: Bill referred to Senate Education Committee.
2016: New bill; referred to Senate Education Committee.
 
FISCAL IMPLICATIONS::
None to the state.
 
EFFECTIVE DATE::
Immediately.

Statutes affected:
S2277: 2023-a education law, 2023-a(3) education law