Who Will Override the Tax Cap?

Both municipalities and school districts around New York State are facing the reality of the new 2 percent tax cap law. The implications, however, are quite different depending on who you are and how your budget is approved. If you are a town or village board, for example, your budgets do not need to be approved by the voters, but rather by only a simple vote of the town council or village board. If you are a school district, then the voters get an opportunity to give a thumbs up or a thumbs down.

Here’s where it gets tricky. In order to pass a budget that complies with the new tax cap law a simple majority vote will do. In order to exceed the tax cap, then a super-majority of 60 percent is required. For a village board like the one in Rye Brook three trustees on a board of five is enough to override the tax cap law. In fact, the town board in Bedford has already decided to go for the override — despite the protests of some citizens. The town board in North Salem is considering doing the same.

School districts around New York State all send their budgets to the voters in May. It is the responsibility of school boards to draft and approve a budget before it goes to the voters. So, the nuts and bolts of how many dollars go to each line item rests with the Board of Education in each district. Which programs will be cut and which will be preserved? How many district employees will be hired or fired? Will reserve funds be accumulated or depleted? These decisions and more rest solely with the Board of Education of each district, and largely follow the recommendations of their respective superintendents.

Generally speaking, polling suggests that New Yorkers favor the tax cap by impressive majorities, but nothing is certain. Some communities may feel strongly enough to override the tax cap. In other states where there is a similar tax cap law — such as Massachusetts — many wealthy districts have repeatedly chosen to override the tax cap while less wealthy districts generally do not.

Going for the override, however, is a high risk proposition, because if the override should fail after two tries, then the contingency budget (or fall-back budget) is a ZERO PERCENT increase. In other words the budget will remain the same as the previous year. Should a Board of Education choose to propose an increase that falls within the 2 percent tax cap, then a 50 percent majority can approve the budget. The high risk would be if a budget with a large increase were to fail (twice), then there is no longer the option of even a 2 percent increase. That would mean even more severe cuts would have to be made. So, a Board of Education would be well-advised to know their constituency so as not to fail if they attempt to override a tax cap.

We are in difficult economic times, and now we are facing new laws with uncertain outcomes. On October 17th the Blind Brook Board of Education will make its first attempt to present some of the information as it relates to the tax cap. The superintendent will present his budget in February, and the final budget will be adopted by the Board of Education in April. The process is starting earlier than ever this year. Let’s keep ourselves informed so that the best decisions can be made when voters go to the polls next May.

Jeff Diamond serves on the Blind Brook Board of Education. This post presents his point of view and does not represent the opinion of the Blind Brook Board of Education.