State Lawmakers Pass Tax Cap, Mandate Relief

While the was the main legislation discussed Friday night, state lawmakers announced passage of a bill that could have major fiscal implications at a local level, in the form of a property tax cap and accompanying mandate relief.

"New Yorkers can now look at Albany and see progress on historic initiatives, action on issues that have been left unresolved for decades, and a legislative session that delivered results," said Governor Andrew Cuomo in a statement on the bundle of legislative victories.

Under the cap, which would go into effect for fiscal years in 2012, local governments and school districts cannot raise their annual property tax levies by more than two percent or the rate of inflation, which ever is lower. There will be some exceptions in which the cap can be exceeded. They include accounting for annual average employee pension contribution increases of more than two percent, in the event of legal judgements in which the amount is more than five percent of the tax levy, and with certain changes to the property tax base.

School districts can propose budgets that exceed the cap, but must get a 60-percent supermajority from voters, who would decide on their ballots over whether or not to give an exception.

Also included are a series of measures designed to provide relief from state mandates placed on municipalities, counties and school districts. These include changes to requirements for contracts being entered into, as well as giving discretion to the local districts to consider ridership as a factor in providing bus service. There will also be a special Mandate Relief Council, which will act as an appeal body for local entities who feel burdened by state requirements, and to make reviews of mandates.

The topic of mandate relief has been brought up by local government and school officials, who voiced concern that a property tax cap without mandate relief would a major negative impact on their finances. However, the mandate relief listed does not include structural changes to employee benefits, which governments and schools in the area often list as significant driving expenses in their budgets.

"While the mandate relief included in this bill is far from comprehensive and is disappointing to me personally, it is a change in the right direction and reduces the cost-drivers that drive up local taxes," said Assemblyman Robert Castelli (R-Goldens Bridge) in a press statement.

He went on to call for changing the pension system and the Triborough Amendment—it regulates employee compensation when unions are in between contracts— as further mandate relief.

The cap and mandate relief legislation came as part of a broader omnibus bill that also includes changes to the system of regulated rental housing. This includes raising the monetary threshold for deregulating rental units and the formula for calculating work done on regulated rental apartments.

Copies of the omnibus bill and its summary memo are attached as PDF files.