Limits, in cities having a population of one million or more, the annual increase in real property taxes.
TITLE OF BILL: An act to amend the general municipal law and the municipal home rule law, in relation to establishing limitations upon real property tax levies in cities with a population of one million or more
PURPOSE: This bill would control the ever-rising property tax by limiting the amount by which the City of New York may increase property taxes each year.
SUMMARY OF PROVISIONS: Section 1 of the bill would add a new § 3-d to the General Municipal Law to establish a real property tax levy cap for New York City.
Under the property tax levy cap:
* New York City may not its property tax levy by more than 2 percent or the rate of inflation (whichever is less).
* New York City may exceed the tax levy cap only if the City Council, by a two-thirds vote by local law overriding the tax levy cap.
* The cap will have limited exceptions including:
o Personal injury settlements that exceed 10 percent of the taxing entity's budget;
o Certain capital expenditures; and
o The increase or decrease in the city cost of state mandated social services assistance to persons eligible for public assistance (including those programs Temporary Assistance to Needy Families ("TANF") program, or the Safety Net Assistance Program ("SNAP")).
o The State Comptroller will determine the tax levy limitations for local governments that are consolidated or dissolved.
o Any excess levy funds that are collected due to clerical or technical errors will be held in reserve.
JUSTIFICATION: New York property taxes are among the highest taxes in the nation. When you combine State and local taxes, New York has the second highest property taxes in the nation. The median U.S. property tax paid is $1,917 and in New York it is $3,755--96 percent higher than the national median. Moreover, New York has the highest local taxes in America as a percentage of personal income--79 percent above the national average.
New York City residents are looking for relief from high property tax increases. Such increases jeopardize their quality of life and the ability to stay in their homes. This bill would limit, New York City's ability to raise property levies, up to 2%. This bill will relieve taxpayers from unexpected high property tax increases.
This measure will force the City to budget more responsibly without looking at property taxpayers as a way to balance its budget. This proposal will allow property owners to budget for their property taxes. It will also prevent city government from burdening the people with outrageous increases. By limiting future increases, families _ and especially those on fixed incomes -- would have a much better sense of what they need to budget. This bill will also help reign in out of control government spending.
FISCAL IMPLICATIONS: This bill would benefit taxpayers in the City of New York by limiting the annual amount of real property taxes the City can levy.
LEGISLATIVE HISTORY: 2011: S.2086 - Reported and Committed to Finance/A.4741- Ways and Means
EFFECTIVE DATE: This act shall take effect immediately and shall first apply to the levy of taxes by cities having a population of one million or more for the fiscal year that begins in 2013.
STATE OF NEW YORK ________________________________________________________________________ 2866--A 2011-2012 Regular Sessions IN SENATE February 2, 2011 ___________Introduced by Sens. LANZA, ADDABBO, AVELLA, GOLDEN, KLEIN, SAVINO -- read twice and ordered printed, and when printed to be committed to the Committee on Cities -- recommitted to the Committee on Cities in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the general municipal law and the municipal home rule law, in relation to establishing limitations upon real property tax levies in cities with a population of one million or more THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The general municipal law is amended by adding a new section 3-d to read as follows: S 3-D. LIMITATION UPON REAL PROPERTY TAX LEVIES BY CITIES HAVING A POPULATION OF ONE MILLION OR MORE. 1. UNLESS OTHERWISE PROVIDED BY LAW, THE AMOUNT OF REAL PROPERTY TAXES THAT MAY BE LEVIED BY OR ON BEHALF OF ANY CITY HAVING A POPULATION OF ONE MILLION OR MORE SHALL NOT EXCEED THE TAX LEVY LIMITATION ESTABLISHED PURSUANT TO THIS SECTION. 2. WHEN USED IN THIS SECTION: (A) "ALLOWABLE LEVY GROWTH FACTOR" SHALL BE THE LESSER OF: (I) ONE AND TWO ONE-HUNDREDTHS; OR (II) THE SUM OF ONE PLUS THE INFLATION FACTOR; PROVIDED, HOWEVER, THAT IN NO CASE SHALL THE LEVY GROWTH FACTOR BE LESS THAN ONE. (B) "APPROVED CAPITAL EXPENDITURES" MEANS THE EXPENDITURES ASSOCIATED WITH CAPITAL PROJECTS THAT HAVE BEEN APPROVED BY THE QUALIFIED VOTERS OF THE LOCAL GOVERNMENT. (C) "AVAILABLE CARRYOVER" MEANS THE SUM OF THE AMOUNT BY WHICH THE TAX LEVY FOR THE PRIOR FISCAL YEAR WAS BELOW THE TAX LEVY LIMIT FOR SUCH FISCAL YEAR, IF ANY, BUT NO MORE THAN ONE AND ONE-HALF PERCENT OF THE TAX LEVY LIMIT FOR SUCH FISCAL YEAR.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD09054-02-2 S. 2866--A 2
(D) "CAPITAL TAX LEVY" MEANS THE TAX LEVY NECESSARY TO SUPPORT CAPITAL EXPENDITURES, IF ANY. (E) "COMING FISCAL YEAR" MEANS THE FISCAL YEAR OF THE LOCAL GOVERNMENT FOR WHICH A TAX LEVY LIMITATION SHALL BE DETERMINED PURSUANT TO THIS SECTION. (F) "INFLATION FACTOR" MEANS THE QUOTIENT OF: (I) THE AVERAGE OF THE NATIONAL CONSUMER PRICE INDEXES DETERMINED BY THE UNITED STATES DEPART- MENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING SIX MONTHS PRIOR TO THE START OF THE COMING FISCAL YEAR MINUS THE AVERAGE OF THE NATIONAL CONSUMER PRICE INDEXES DETERMINED BY THE UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING SIX MONTHS PRIOR TO THE START OF THE PRIOR FISCAL YEAR, DIVIDED BY: (II) THE AVERAGE OF THE NATIONAL CONSUMER PRICE INDEXES DETERMINED BY THE UNITED STATES DEPARTMENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING SIX MONTHS PRIOR TO THE START OF THE PRIOR FISCAL YEAR, WITH THE RESULT EXPRESSED AS A DECIMAL TO FOUR PLACES. (G) "LOCAL GOVERNMENT" MEANS A CITY HAVING A POPULATION OF ONE MILLION OR MORE. (H) "PRIOR FISCAL YEAR" MEANS THE FISCAL YEAR OF THE LOCAL GOVERNMENT IMMEDIATELY PRECEDING THE COMING FISCAL YEAR. (I) "TAX LEVY LIMITATION" MEANS THE AMOUNT OF TAXES A LOCAL GOVERNMENT IS AUTHORIZED TO LEVY PURSUANT TO THIS SECTION, PROVIDED, HOWEVER, THAT THE TAX LEVY LIMIT SHALL NOT INCLUDE THE LOCAL GOVERNMENT'S APPROVED CAPITAL TAX LEVY, IF ANY. 3. (A) BEGINNING WITH THE FISCAL YEAR THAT BEGINS IN TWO THOUSAND TWELVE, NO LOCAL GOVERNMENT SHALL ADOPT A BUDGET THAT REQUIRES A TAX LEVY THAT IS GREATER THAN THE TAX LEVY LIMITATION FOR THE COMING FISCAL YEAR. (B) THE STATE COMPTROLLER SHALL CALCULATE THE TAX LEVY LIMITATION FOR EACH LOCAL GOVERNMENT BY THE ONE HUNDRED TWENTIETH DAY PRECEDING THE COMMENCEMENT OF EACH LOCAL GOVERNMENT'S FISCAL YEAR, AND SHALL NOTIFY EACH LOCAL GOVERNMENT OF THE TAX LEVY LIMITATION SO DETERMINED. (C) THE TAX LEVY LIMITATION APPLICABLE TO THE COMING FISCAL YEAR SHALL BE DETERMINED AS FOLLOWS: (I) ASCERTAIN THE TOTAL AMOUNT OF TAXES LEVIED FOR THE PRIOR FISCAL YEAR. (II) ADD ANY PAYMENTS IN LIEU OF TAXES THAT WERE RECEIVABLE IN THE PRIOR FISCAL YEAR. (III) SUBTRACT THE APPROVED CAPITAL TAX LEVY FOR THE PRIOR FISCAL YEAR, IF ANY. (IV) SUBTRACT THE LEVY ATTRIBUTABLE TO A LARGE LEGAL SETTLEMENT OF A TORT ACTION EXCLUDED FROM THE LEVY LIMITATION IN THE PRIOR FISCAL YEAR, IF ANY. (V) MULTIPLY THE RESULT BY THE ALLOWABLE LEVY GROWTH FACTOR. (VI) SUBTRACT ANY PAYMENTS IN LIEU OF TAXES RECEIVABLE IN THE COMING FISCAL YEAR. (VII) ADD THE AVAILABLE CARRYOVER, IF ANY. (D) IN THE EVENT THE CITY COUNCIL OF A LOCAL GOVERNMENT HAS APPROVED A LEGAL SETTLEMENT OF A TORT ACTION AGAINST THE GOVERNMENT, THE ANNUAL COSTS OF WHICH EXCEED TEN PERCENT OF THE PROPERTY TAXES LEVIED BY THE LOCAL GOVERNMENT IN THE PRIOR FISCAL YEAR, THE STATE COMPTROLLER, UPON APPLICATION BY THE LOCAL GOVERNMENT, MAY ADJUST THE TAX LEVY LIMITATION FOR THE COMING FISCAL YEAR APPLICABLE TO SUCH LOCAL GOVERNMENT, BY ADDING THE ANNUAL COSTS OF SUCH SETTLEMENT TO THE TAX LEVY LIMITATION. (E) THE STATE COMPTROLLER SHALL DETERMINE THE PORTION OF THE TAX LEVY OF EACH LOCAL GOVERNMENT THAT IS ATTRIBUTABLE TO ANY INCREASE ORS. 2866--A 3
DECREASE OVER THE PRIOR YEAR IN THE COST OF THE LOCAL GOVERNMENT SHARE OF DIRECT CASH ASSISTANCE TO PERSONS ELIGIBLE FOR THE FEDERAL-STATE-LO- CAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES PROGRAM OR THE STATE-LOCAL SAFETY NET ASSISTANCE PROGRAM AND SHALL ADJUST THE TAX LEVY LIMITATION FOR SUCH LOCAL GOVERNMENT TO REFLECT SUCH CHANGE. 4. A LOCAL GOVERNMENT MAY ADOPT A BUDGET THAT REQUIRES A TAX LEVY THAT IS GREATER THAN THE TAX LEVY LIMITATION FOR THE COMING FISCAL YEAR ONLY IF THE CITY COUNCIL OF SUCH LOCAL GOVERNMENT FIRST ENACTS, BY A TWO-THIRDS VOTE OF THE TOTAL VOTING POWER OF SUCH CITY COUNCIL, A LOCAL LAW TO OVERRIDE SUCH LIMITATION FOR SUCH COMING FISCAL YEAR ONLY. 5. IN THE EVENT A LOCAL GOVERNMENT'S ACTUAL TAX LEVY FOR A GIVEN FISCAL YEAR EXCEEDS THE MAXIMUM ALLOWABLE LEVY AS ESTABLISHED PURSUANT TO THIS SECTION DUE TO CLERICAL OR TECHNICAL ERRORS, THE LOCAL GOVERN- MENT SHALL PLACE THE EXCESS AMOUNT OF THE LEVY IN RESERVE IN ACCORDANCE WITH SUCH REQUIREMENTS AS THE STATE COMPTROLLER MAY PRESCRIBE, AND SHALL USE SUCH FUNDS AND ANY INTEREST EARNED THEREON TO OFFSET THE TAX LEVY FOR THE ENSUING FISCAL YEAR. S 2. Paragraphs j and k of subdivision 2 of section 23 of the munici- pal home rule law are relettered k and l, and a new paragraph j is added to read as follows: J. OVERRIDES THE TAX LEVY LIMITATION APPLICABLE FOR THE COMING FISCAL YEAR IN ACCORDANCE WITH SECTION THREE-D OF THE GENERAL MUNICIPAL LAW. S 3. This act shall take effect immediately and shall first apply to the levy of taxes by local governments for the fiscal year that begins in 2013.