How are school taxes impacted by the recent property value reassessments in the City of Hudson?
If you live in the City of Hudson, you may have experienced changes to your property value following city-wide reassessments performed by GAR Associates and the City Assessor. While school districts have no direct role in the reassessment process, we want to share some information about how the reassessment process is related to your school taxes.
If your assessment changes, you should not assume your taxes will increase. Your taxes may go up, down or stay the same. Furthermore, a reassessment does not increase the amount that schools or other local governments collect in taxes. It is a common misperception that a reassessment will automatically increase taxes and/or be a windfall for schools or local governments. Click here to learn more about how the reassessment process is related to your school taxes.
Why is a 2.3% increase within the tax cap?
The New York State (NYS) property tax cap law requires schools to use an eight-step formula to determine how much they can increase their tax levy each year. Although it is often described as a “2% tax cap,” the calculation does not always work out to be an even 2 percent. Very few school districts have a 2% tax cap because the formula causes the cap to vary from district to district.
The maximum tax levy increase calculated for HCSD is 2.5 percent. However, the Board of Education decided to reduce the tax levy for taxpayers and propose a budget with a smaller increase of 2.3 percent. This is within the maximum allowable tax levy increase, or “tax cap.”
Why isn’t the tax cap really 2 percent?
Even though elected officials often refer to New York’s Property Tax Cap law as a “2% tax cap,” it is not entirely accurate. Here is a short video that explains how NYS uses a formula to determine each school district’s tax cap number, which rarely works out to 2 percent.
What factors contribute to the tax cap?
There are five main factors that contribute to the tax cap, or allowable increase in the tax levy. They are: the current year tax levy, inflation rate, capital and retirement exclusions, payments in lieu of taxes, and tax base growth factor (set by the NYS Department of Taxation and Finance). These factors change every year and vary from district to district.
Is there a property tax rebate this year?
Yes, the NYS Property Tax Rebate applies for 2019. To qualify, homeowners must receive the STAR exemption, make less than $275,000 a year, and live in school districts that pass budgets at or below the tax cap. Historically, Hudson’s budgets have stayed within the calculated tax cap and will do so again for 2019-20. Therefore, taxpayers who meet the eligibility requirements should receive a rebate check from the state. To learn more, visit the NYS Department of Taxation and Finance’s website.
What happens if the budget is defeated?
If the budget is not approved on May 21, the District may resubmit the original budget or submit a revised budget to the voters on June 18. If the revised budget proposal is not approved by the required margin, the Board of Education must adopt a contingency budget with a 0% increase in tax levy. Under a contingency budget, the District is only allowed to expend funds for specific mandates. Each program and department would be reviewed to eliminate non-mandated expenses (e.g., extracurricular activities, field trips, sports) for the 2019-20 school year.
What if I have questions?
For more information, please call the District Office at 518-828-4360, ext. 2100.