2012 property tax card analysis[1]
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Analysis of2012-13
School District
Property TaxReport Cards
April 30, 2012
NEW YORKSTATE COUNCILofSCHOOL SUPERINTENDENTS
WWW.NYSCOSS.ORG
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Highlights
Statewide average proposed tax increases are down from a year ago (from 3.4% to 2.2%).
Proposed spending increases are up from a year ago (1.7% vs. 1.3%), but still well-belowinflation (2.7% in latest CPI).
51 districts are seeking to over-ride the tax levy limit for their districts. About half of districtsare proposing levy increases within 20% of the maximum increase allowed by their limit.
Unlike some past years, there do not appear to be clear wealth-related patterns in proposed
spending and tax increases, at least looking at the state as a whole.
There is widespread concern about the year after next (2013-14). Looking at reserves helpsidentify why.
Some state aid data:
The overall pattern of state aid increases appears somewhat random due to the mix of (1) expense-based aids funded bycurrent law, and (2) new general aid increases directed by the Governor and Legislature.
Distribution of new general aid this year is more progressive than in some past years, but additions remain small incomparison to past cuts.
Additional observations and conclusions are presented at the end.
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The statewide average proposed tax increase is down more than 1% from 2011-12.
The average spending increase is up, but well below inflation (2.7% March CPI).
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3.4%
1.3%
2.2%
1.7%
0%
1%
2%
3%
4%
% Change in proposed tax levy % Change in proposed school spending
Perce
ntchangeo
verpriory
ear
Percent change in district spending and tax levy2011-12 vs. 2012-13
2011-12 2012-13
SOURCE: Council analysis of NYSED Property Tax Report Card data
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Even prior to tax cap, schools were holding down tax increases
Districts have responded to voters have been holding down spending and taxes
SOURCE: Council analysis of NYSED Property Tax Report Card and School Aid data; federal Education Jobs Fund
allocations not included in state aid
8.2%8.7%
7.5%6.1%
4.3%3.7%
2.1% 3.2% 3.4%
2.2%
-1.3%
4.7%5.4%
7.0%
8.7%9.4%
1.9%
-5.1%
-3.9%
3.8%
4.8%
6.9% 6.6% 6.3% 6.1%5.3%
2.3%1.4% 1.3%
1.7%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Percentchange
overprioryear
Percent change in district spending, tax levy and state aid, 2003-04 -- 2012-13Big 5 Cities not included
% Change in proposed tax levy % Change in School Aid % Change in proposed school spending
Last 2 years: Districts held down
tax increases despite state aid cuts
(contrast with 2003-04).
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The Property Tax Cap How it works:
The law sets a tax levy limit for each district : the lesser of 2% or inflation over the prior
calendar year, plus exemptionsexemptions can result in a limit higher or lower than 2%. 60% of voters required to approve if proposed tax levy increase is greater than the tax levy limit;
50% + 1 if the proposed levy increase is less than or equal to the tax levy limit.
Two votes allowed.
Exemptions from the tax levy limit: Pension costs attributable to increases in contribution rates greater than 2 percentage points (e.g., ERS
rate from 16.3% to 18.9% (+2.6 percentage points), .6 percentage point increase exempt.
Physical additions to tax base Certain large legal expenses
Local share of capital expenditures
Unused levy from a prior year, up to 1.5 % additional levy
If voters reject the proposed tax levy increase, the district is required to adopt a contingencybudget with a tax levy no greater than the prior year.
Exemptions countonlyin determining whether or not 60% voter approval is required. If adistrict is required to adopt a contingency budget, it is limited to no more than the prior yearlevy andis not allowedto raise levy to cover exempt items.
Trying to over-ride the cap raises the risk of failure and a 0% cap
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51 districts are seeking to over-ride the cap.
Districts have incentives to stay close to levy limit.
51 districts (7.6%) are proposing increases above their tax levy limit.
143 districts (21.4%) proposing increases equal to their limit.
127 (19.0%) propose increases within 10% of their maximum increase within the limit.
65 districts propose increases between 10% and 20% of their allowed maximum.
22 districts propose no change in levy.
10 districts are proposing year-to-year reductions in levy.
The consequences of failing to get voter approval are severe (no levy increase at all), so
districts have incentives to
avoid attempting an over-ride (requiring 60% voter approval); and
seek tax increases close to their levy limit each year to have a better base for future in
case voters do not approve an increase in some year.
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Over-ride districts compared to the rest
Key point: there are wide variations among districts in both groups
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Over-ride Districts Other Districts
Average tax levy increase 4.3% 2.1%
Average tax levy limit 2.3% 2.9%
Average spending increase 2.0% 1.7%
Average State Aid increase 3.6% 3.9%
% Change in unrestricted fund balance -23.0% -13.2%
Unrestricted fund balance per pupil $486 $800
Summary: Districts proposing over-rides have higher tax increases and lower levy limits, as well as slightlylower state aid increases and slightly higher spending increases.
Also, on average, over-ride districts appear to be in a weaker position with regard to reserves.
Looking at the state as a whole, poorer districts do not appear to be over-represented among thoseproposing over-rides.
In fact, poorer districts tend to be proposing increases further below their limits than better-off districts.
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Unlike some past years, there do not appear to be stark wealth-
related patterns in proposed spending & tax increases
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2.4%
1.4% 1.2%1.4% 1.5%
1.4%
1.9% 1.8% 1.9%2.0%
1.7%1.5%
2.1% 2.0%
2.8%
0.4%
2.5%
2.7%2.5%
2.1%
2.4%
2.2%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
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(Poorest
10%)
2 3 4 5 6 7 8 9 10 NYS
Percent change in proposed school spending and tax levy, 2011-12 to 2012-13
districts grouped by property wealth per pupil
% Change in Spending % Change in Tax Levy
SOURCE: Council analysis of NYSED Property Tax Report Card data
In contrast, in 2011-12, the poorest 20% of districts held their spending flat and
resource gaps widened (the statewide average spending increase was 1.3%)
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There is widespread concern about the year after next (2013-14).
Looking at reserves helps to understand why.
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-31%
-23%
-9%
-18%
-22%
-10%
-9%
-12%-4%
-7%
-14%
21%
17%
11%
10%
11%
8%
6%
5%3%
3%
7%
-40% -30% -20% -10% 0% 10% 20% 30%
1 (Proorest 10%)
2
3
4
5
6
7
89
10
NYS
Districts grouped by property wealth per pupil
Change in Unrestricted Fund Balance from 2011-12 to 2012-13
Appropriated Fund Balance as % of Tax Levy (i.e., additional tax increase which would be necessary without
use of fund balance)
SOURCE: Council analysis of NYSED Property Tax Report Card data
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Some information on state aid
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Overall School Aid increases appear rather random
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SOURCE: Council analysis of NYSED School Aid data; Big 5 Cities not included
(they do not file Property Tax Report Cards.
0%
1%
2%
3%
4%
5%
1
(poorest
10%)
2 3 4 5 6 7 8 9 10 NYS
% Change in total School Aid, 2011-12 to 2012-13 -- general vs. other aids,
districts grouped by property wealth per pupil
% change due to expense-based & other aids % change due to general aid increases
Random pattern is due to combination of expense-based & other aids funded according tocurrent law plus new general aid directed by the Governor and Legislature.
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2012-13 general purpose aid increases more progressive than some past years.
But aid increases are small in comparison to past cuts.
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SOURCE: Council analysis of NYSED School Aid data
(1,115)
(1,472)
(1,487)
(1,298)
(1,185)
(1,096)
(1,062)
(805)
(536)
(401)
(1,037)
225
180
141
131
97
68
52
30
17
5
85
116
162
151
119
89
79
104
82
37
16
93
(1,500) (1,200) (900) (600) (300) - 300
1 (poorest 10%)
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3
4
5
6
7
8
910
NYS
2011-12 Gap Elimination Adjustment vs. 2012-13 general aid increases per pupil
Districts grouped by property wealth per pupil2011-12 GEA 2012-13 Governor's GEA Restoration Legislature's General Aid Increases
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Additional observations and conclusions
Despite an improved fiscal outlook for state government, the position of many
school districts remains grim.
The state aid increase for many districts is offset by the end of federal Education
Jobs Funds.
For the third straight year, proposed school spending increases average under 2% --
probably less than what pensions and health insurance alone would drive,
requiring districts to cut other spending on balance.
After three difficult prior state budget cycles, many districts have exhausted easier
budget cutting options.
The tax cap does appear to be pushing down the tax increases which school
districts are proposing.
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NEWYORKSTATE
COUNCILOF SCHOOL SUPERINTENDENTS
7 Elk Street, 3rd Floor
Albany, NY 12207
(518)449-1063
www.nyscoss.org
Check out our blog too: blog.nyscoss.org
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