By Joseph Spector
Albany Bureau Chief
ALBANY Twenty-six percent of local governments have indicated plans to override the property-tax cap in 2014, slightly outpacing the rate over the past two years.
About 315 of the 1,200 taxing entities to report their plans to the state Comptroller's Office indicated earlier this month they may override the property-tax cap, records show.
Local government officials said staying under the tax cap might prove more difficult this year. The cap this year limits the growth in property taxes to 1.66 percent a year rather than the 2 percent it had been the previous two years.
"The lower cap this year is definitely putting even more pressure on local governments to stay under it," said Peter Baynes, executive director of the state Conference of Mayors.
Gov. Andrew Cuomo has hailed the success of the cap installed in 2011 as a way to curb the growth in property taxes, which in New York are among the highest in the nation.
Cuomo said in a statement Oct. 2 that he's looking to shed "the 'tax capital' mentality that for too long has driven businesses and families from New York."
Cuomo has appointed a tax commission to look at further ways to limit the property-tax burden on homeowners. The panel's report is due next month.
A separate commission looking at taxes in New York released a report Thursday that hinted Cuomo may look to try to tie property taxes to household incomes, called a circuit breaker. Unions and progressive groups have pushed for the plan for years.
"The situation in which these families find themselves will not be addressed by New York's cap on the growth of local governments' property-tax levies," Ronald Deutsch, executive director of New Yorkers For Fiscal Fairness, a union-backed group, said in a statement.
"Only a middle-class circuit breaker can provide effective relief for these families in a targeted and cost-efficient manner."
The cap limits the growth in the property-tax levy to 2 percent a year or the rate of inflation, whichever is lower.
For 2014, Comptroller Thomas DiNapoli set the cap at 1.66 percent. It applies to school districts and municipalities. Towns, smaller cities and counties operate on a fiscal year that starts Jan. 1. Larger cities and schools run on a fiscal year that starts July 1.
There are some exemptions to the cap, such as an increase in pension costs above two percentage points each year. So each entity's cap limit is different. The average cap limit for schools in May was about 4.6 percent.
Few local governments have exceeded the cap in its first two years. Last May, 98 percent of schools stayed within their cap limit. This year, about 77 percent of local governments stayed under the cap.
Lewis Zorn, supervisor in Tioga, Tioga County, said the town barely stayed under the 1.66 percent cap. The town did it by using surplus funds.
"We have to use a lot of the fund balance every year. Eventually, something will have to change," Zorn said.
Local governments can override the tax cap with a vote of 60 percent of their governing boards. It's easiest for the five-member town boards: An override requires a simple majority of three members.
The records from the Comptroller's Office showed that 30 percent of towns planned to override the cap, compared to five of the 20 counties that provided their plans. Rockland, Tompkins and Ontario were among those indicating plans to override the cap.
The city of Elmira indicated Friday it would exceed the cap, proposing a nearly 4 percent tax increase.
Dutchess County said it would stay under the cap, as did Putnam County. The state has 56 counties outside New York City.
There are about 3,000 local governments who provide details each year to the comptroller, including fire and library districts that can tax residents.
Keeping under the cap "was incredibly important," said Putnam County Executive MaryEllen O'Dell. "It was our goal from day one."
An override can be more difficult for larger counties, which can have 20 or more legislators. And schools require a 60 percent vote from the public to approve an override, something that has proven difficult and is being contested in court by the state's teacher's union as to its legality.
Still, this year, the state's largest counties have indicated plans to stay under the tax cap. In Monroe and Westchester counties, they have proposed a zero tax increase, so too did Chemung County. Onondaga County proposed a slight tax decrease.
"To me, it's the message you are sending to the public," said Chemung County Executive Thomas Santulli. "We're 81 percent higher in property taxes (in New York) than the national average."
Some counties have been aided by an increase in sales-tax revenue.
Sales-tax revenue for state and local governments was up 5.5 percent from January through September compared to the same period in 2012. It grew largely in the New York City area and was down across the Southern Tier.
Westchester County expects sales-tax revenue to grow 4 percent next year, County Executive Robert Astorino said in his budget proposal Friday.
"This budget shows once again that government - just like the taxpayers who pay the bills must do - can live within its means," Astorino said in a statement.
Monroe County Executive Maggie Brooks said Tuesday in presenting her budget that the tax rate would stay flat, despite pressure from state-mandated expenses.
"Mandates are 83 percent of our budget; 100 percent of the problem," she said in her budget address.
Local governments have pressed Albany for mandate relief. They have received reforms, but they say they were not enough.
The state is taking over the growth in Medicaid costs and letting local governments essentially borrow from the pension fund to cover increasing retirement costs.
Broome County Executive Debbie Preston proposed a 2.97 percent tax increase and had a 3.7 percent tax-cap limit. She and the county legislature agreed to increase taxes by nearly 1.8 percent.
"We kept in mind the property-tax cap was in place, but our focus was on the wallets of our taxpayers and keeping as much money with them as possible," Preston said in a statement.
Kingston Mayor Shayne Gallo said 88 percent of the Ulster County city's budget is mandated costs, including union contracts. He said the city continues to use up its reserve accounts to stay under the cap.
The state recommends 10 percent of a municipality's budget be held in reserve in case of emergency; Kingston is down to about 5 percent, he said.
"It's going to get worse," Gallo said. "The only way we are ale to stay within the cap is to withdraw from the fund balance and hope like heck we'll be able to replenish" it.