1. Property Tax Cap NYS Chapter 97 of the Laws of 2011

2. Allowable tax levy growth factor= Lesser of 2% or change in CPI Property Tax Cap

3. 2001 2.8 2002 1.6 2003 2.3 2004 2.7 2005 3.4 2006 3.2 2007 2.8 2008 3.8 2009 -0.4 2010 1.6 CPI History If the CPI change is negative in a given year, the tax levy increase limit will be 0%.

4. Cap effective for the 2012-13 school year Effective through at least 2016-17 (as long as rent control laws are in place) Current contingency budget requirements remain in place Submit info to NYS on March 1 st for levy calculation Property Tax Cap

5. Initial Calculation (assuming 2%) School YearTax Levy$ Increase 2011-12$43,629,717 2012-13$44,502,311$872,594 2013-14$45,392,358$890,046 2014-15$46,300,205$907,847 2015-16$47,226,209$926,004 2016-17$48,170,733$944,524

6. #1Capital Local Expenditures #2Court Orders #3ERS Costs #4TRS Costs Exclusions from Cap

7. Capital Local Expenditures Exemption Expenditures associated with voter approved construction, acquisition, and reconstruction Includes debt service, lease expenditures, and transportation capital debt svc (bus purchases) Not clear whether decreasing debt service will work against districts

8. Court Orders Exemption Expenditures resulting from court orders or judgments arising out of tort actions (tax certiorari) Only such expenditures that exceed 5% of the total tax levied in the prior school year

9. ERS Cost Exemption May levy any increase in ERS costs above 2% ERS rate increase Example: 2010-11 ERS Rate = 11.20% 2011-12 ERS Rate = 15.60% Difference in Rates = 4.40% Exempt from Cap = 2.40%

10. TRS Cost Exemption May levy any increase in TRS costs above 2% TRS rate increase Example: 2010-11 TRS Rate = 8.62% 2011-12 TRS Rate = 11.11% Difference in Rates = 2.49% Exempt from Cap = 0.49%

11. ERS & TRS Exemption Separate exemptions-2% calculation not aggregate Example: ERS increase is 2% TRS increase is 2% Total State Retirement Contribution Increase = 4% In this scenario, there is no exemption from tax cap because each system’s increase is at the 2% threshold individually.

12. ERS & TRS Exemption Since levy increase limit is calculated on 3/1, ERS & TRS exemptions will be calculated on estimated contribution rates. Example: 2011-12 estimated TRS rate at budget time: 11.0% 2011-12 actual TRS rate: 11.11% ….0.11% would not included in our exemption and levy calculation that needs to be paid.

13. ERS & TRS Exemption

14. Illustration of Exemption Impact using 2011-12 salary estimates and actual 2011-12 ERS & TRS rates Required contribution rate expense necessary to fit within the budget, under the cap is $1,049,242. The allowable 2% tax cap increase is around $900,000. Because of additional ERS & TRS contribution expenditures, the budget has a -$150,000 revenue gap.

15. Budget Vote Vote process remains the same-need majority to pass vote If levy is over 2% cap (less exemptions), need 60% approval Contingency budget requirements remain same

16. Budget Turndown 3 Options Resubmit original budget Submit a revised budget Adopt contingency that levies a tax no greater than that of the prior year (can increase levy for exemptions) 2 nd Turndown Adopt contingency that levies a tax no greater than that of the prior year (can increase levy for exemptions)

17. Miscellaneous Carryover into next tax year if entire 2% allowance is not used, max 1.5% carryover Impact on Credit Ratings/Borrowing Voter Perception Change in Building Aid Payments

18. Questions?