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Why the 2% tax cap isnt 2%

New York States new limit on school-tax growth is often described as a 2 percent annual cap. But that 2 percent is only one factor used to calculate a school districts tax-levy limit. Certain new costs are exempt from the cap, including money for voterapproved school renovation and construction. Certain new revenues are deducted from the allowable capped tax levy, including PILOTS or payments in lieu of taxes from commercial properties that have been granted tax incentives. Heres a hypothetical sample of how a Long Island school districts tax-levy cap is calculated:

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Estimated 2012-13 local tax levy spent on capital projects

ADD EXCLUSIONS
SOURCE: NEW YORK STATE ASSOCIATION OF SCHOOL BUSINESS OFFICIALS

$740,098
Permissible portion of estimated 2012-13 payments for court- ordered judgments

Building construction/reconstruction,
obligated debt service and lease payments, and school buses.

TAX LEVY CAP BEFORE EXCLUSIONS


2011-12 tax levy

0
Permissible portion of estimated 2012-13 local tax levy for pension contributions

$61,046,196

$34,861

x
Percent increase in the assessed district tax base due to new construction.*

2012-13 total tax-levy cap

$63,274,163 3.65%
Percent

.05%

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*Calculated by the state Office of Real Property Tax Services. 1.0005 is the figure to be used in the calculation. ** 1.02 is the figure to be used in the calculation.

PILOTS received in 2011-12

$1,749,059

2012-13 total tax-levy cap before exclusions

Local tax levy spent on capital projects in 2011-12

$62,499,204

= x
State-imposed tax levy cap**

2%

PILOTS expected in 2012-13

$1,583,090