School budgets: What are tax levies and re-assessments?

(NEWS10)- It's been quite a ride for school districts over the past year and a half in terms of finances. Last year's 2020-2021 budgets reflected the strain of funding uncertainty as budgets, staff, and programs were cut from some districts.

At one point the state said school districts and municipalities could see a 20% cut in state funding. The fallout from the loss of state tax revenue during the COVID pandemic. It was later announced they would be receiving both state and federal aid.

The 2021-2022 budgets showed more optimism with the addition of previously cut positions and the reimplementation of programs like sports at the Rensselaer City School District. The sports program had been cut from last year's budget but was able to be added back into the 2021-2022 budget with $200,000 in state aid.

School districts in and around the Capital Region showed caution and sensitivity to taxpayers' financial plights when creating 2021-2022 budgets. Not one proposed a budget above the state tax cap.

This could mean little to taxpayers in the Town of Moreau, part of the South Glens Falls School District, and Fort Edward.

Fort Edward passed an $11.1 million budget with a 1.23% tax levy, South Glens Falls a $32.5 million budget with a 0% tax levy. Despite both tax caps remaining low, taxpayers could see higher tax bills come September.

How the tax cap works

New York places a limit on how much a school district or municipality can increase taxes each year in the state- this is where the 2% tax cap comes into play. It doesn't mean that tax increases won't exceed 2%. Nor does it mean a proposed tax levy above the tax cap can't be overridden. Levy's over-the-cap can be approved by a supermajority, at least 60% of voters.

There are a number of factors that affect how much in school taxes a property owner pays but it ultimately comes down to the tax rate, the assessed value of a property, and equalization rates (a system used to adjust assessed property values).

The reason proposed tax levies for some districts could be more than 2% is because of the way they are calculated.

"The tax levy limit allows school districts to increase their property tax levy from one year to the next by 2% or the rate of inflation, whichever is less, based on a multi-step formula. School districts are then allowed to take certain exemptions that may boost their tax levy limits to more than 2% or the inflation rate," explains the New York State School Boards Association.

It's why 11 local school districts were able to propose tax levy's greater than 2% for the 2021-2022 school year and be able to pass them with a simple majority.

Tax levies are calculated based on each $1,000 of assessed home values. For example, taking the tax levy for the Johnstown School District, 3.8%, a homeowner could expect to pay $38 per $1,000 of their home's assessed value.

That's before equalization rates are applied. Equalization rates can either raise or lower a property's assessed value. This is because not all municipalities assess home values at 100% of the full market price, the New York State Department of Taxation and Finance said.

In order to distribute school district or county taxes among multiple municipalities, the level of assessment of each municipality must be equalized to full market value.

NYS Department of Taxation and Finance

Properties are not re-assessed every year but there are circumstances that would cause a municipality to re-assess a home's value.

"If there is a permit for an improvement such as a (home) addition, in-ground pool, garage, etc., an assessment would be reviewed and possibly increased. If there is a sale and the property had a physical change, i.e. renovation, 'flipped', change of inventory, we would review the assessment as well," said Rotterdam's Assessor, Brad Canning.

Periodically, a municipality will re-assess all properties which is what's currently happening in the Town of Moreau.

The town's website said assessment letters were sent to homeowners on April 1. Moreau's Sole Assessor, Leah Cronin, was not in the office but said she would talk to NEWS10 when she's back in the office the week of June 8.

Businesses sometimes have a big role to play in tax assessments too as was seen in Fort Edward. As part of an agreement with the town, Irving Tissue received a tax break that expired. The assessed value of the company's site was $22 million when the agreement was made. With that in mind, the school district had anticipated a tax cut for property owners.

However, that wasn't the case. Fort Edward re-assessed the site at half the original value, $11 million. The school district chose to bring back student programs that had been cut the year before and teachers that had been laid off. The district was unable to bring back some administrative positions, custodial, and transportation services.

If a homeowner thinks their property has been unfairly assessed it's up to them to do something about it, said the NYS Department of Taxation and Finance. If a homeowner feels their property has been assessed unfairly, they can file a grievance with the city, town, or village.

"The (municipalities) assessor has the primary role in ensuring the fairness of individual assessments," they said. "Property owners also have a role to ensure their individual assessments are fair."

Town of Moreau residents who wanted to dispute or "grieve" their property assessments will have to wait until next year. Grievances had to be filed by May 25.

NYS Department of Taxation and Finance form RP-524 can be used by any N.Y. resident to dispute their home's assessed value. The deadline to file a grievance for most municipalities is the fourth Tuesday in May, otherwise known as "Grievance Day."

Information about how to fill out the form and about the grieving process can be found on the NYS Department of Taxation and Finance's website.