Village auditor Jim Olivo intended to educate the public on the property tax levy cap through a PowerPoint presentation Oct. 20 at village hall. Much of the presentation was obtained from the New York State Conference of Mayors (NYCOM).
"The reason why we inserted the word levy is because we anticipate there's going to be a lot of misunderstanding about this law, particularly when the public gets their tax bill next June," Olivo said.
He provided a brief history of what lead to the tax cap proposal, noting that in 2011 Gov. Andrew Cuomo's proposal included the lesser of 2 percent or Consumer Price Index (CPI), an override subject to mandatory referendum and exclusions for extraordinary capital expenditures and judgements.
"The U.S. city average was 2 percent at the time this was prepared and has risen slightly effective June 2012 for Garden City and will apply to taxes imposed on real property by or on behalf of a county, city, town, village, school district, fire district or special district," Olivo explained. New York City and Big 5 school districts are exempt.
Olivo said Garden City could see an exclusion from pension cost increases. "This is excess of 2 percent of pay roll pension cost exclusion. The actuarial rates are out now for the next billing of the reitrement system. They've gone from 16.3 percent to 18.9 percent rate increase. Exclusion for exmployees is 6 percent of payroll," he said.
For police and fire, Olivo added, that actuarial average rate went from 21.6 to 25.8, a 4.2 percent rate increase. "So 2.2 percent of police/fire payroll is excludable," he said. "The actuarial rate will change the billing from 16 percent to 19.4 percent in PFRS bills. That's just what the rates are going to be and will become."
Garden City's tax levy limit will not be determined until January because the CPI is six months prior to the beginning of the fiscal year (for Garden City that's June). "Though we are expecting it to be a 2 percent levy, unless inflation drops off, not that we're thinking it will, that will cause a re-calculation of these figures," Olivo said.
A local governing body must adopt a local law to authorize a cap override, which is good for one fiiscal year and must be approved by 60 percent of the local governing body. In Garden City's case, a simple majority of five positive votes will do.Garden City's History Tax Levy Tax Rate 2006-2007 2.66% 3.12% 2007-2008 -.95% 0.00% 2008-2009 2.93% 3.60% 2009-2010 4.06% 5.91% 2010-2011 .14% 2.22% 2011-2012 .49% 1.74%
Garden City's 2011-2012 tax levy is $44,560,340 with an assumed zero growth factor. Add $610,000 for PILOTS (Payments In Lieu of Taxes), Olivo said, and apply the 2 percent factor, the tax levy totals $46,073,746. Subtract the PILOTS and the tax levy totals $45,463,746. Calculate exclusons and add to the levy, Olivo said the final allowed levy for Garden City is $45,772,965. The only exclusion Garden City has is the pension exclusion, Olivo said, which is roughly $300,000.
"The tax levy increase completely compliant with the levy cap is 2.73 percent," he said. "The public has been told you have a 2 percent tax cap. Because it's a levy cap the rate can go to 2.73 percent.
"Let's assume the village has a 1 percent loss in assessment, which is not an unreasonable number because we've seen that number year after year after year," Olivo said. "Our assessed value would then become $104,735,842, our tax rate becomes $43.71, which is actually a rate increase of 3.78 percent. That's technically compliant."
Olivo said tax caps do nothing to really address what's driving the cost of government - pensions, health insurance, energy and fuel - and that the included mandate relief "wasn't exactly meaningful."
For example, he said the ability to recover municipal expenses associated with police officer training when an officer transfers to another municipal police department is particularly bothersome.
"Garden City receives a lot of officers from New York City. That gentleman is not a mandate relief. That gentleman is a mandate. You are now going to have to pay to bring that officer into this jurisdiction," he said. "You're going to be facing a mandate to reimbruse the City of New York because of this mandate relief item."
Requested mandate relief items included pension reform, mandatory health insurance contributions, repeal of the Triborough Amendment, binding arbitration reform, limits on police and firefighter disability payments and prevailing wage reform.
"These are the types of mandates that were proposed in an amendment to this tax cap before this went to the floor," Olivo said. "This tax cap was passed as part of the 'Big Ugly' - an omnibus bill at the very end of the session that sucks in everything that wasn't done and goes to 11:30 12 o'clock at night. The session closes and everybody leaves and says 'job well done.' Ninety to 95 percent of bills that have any effect on anything pass in the last hour of session. This is one of them."
Olivo said the presentation was an "educational necessity" because residents will question their tax bill next June if the rate is not 2 percent. "It's not 2 percent because of the way this law was written and the exclusions that are added into this law," he said. "This is what the legislature did. We're going to have to educate the public that what they see is not necessarily what they think they're going to get."