1 Property Tax Cap and Tax Freeze Legislation Details for Fire Districts Presented by Ingrid Otto-Jones, CPA Senior Examiner, Monitoring and Analysis Unit Office of the State Comptroller Thomas P. DiNapoli State & Local Government Accountability Local Government & School Accountability Andrew A. SanFilippo Gabriel F. Deyo Executive Deputy Comptroller Deputy Comptroller Topics for Today’s Session Review of Property Tax Cap Legislation Review of Tax Freeze Legislation Reporting Requirements Walk through of Online Service Filing System OSC Role Common Errors Property Tax Cap - Summary Tax cap limits total levy set by local governments, not assessed value or tax rate. Local Governments (including Fire Districts) and School Districts may not adopt a budget that requires a tax levy that exceeds the prior year’s levy by more than 2% OR the rate of inflation, whichever is less , unless they officially override the tax levy limitation.
Transcript
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Property Tax Cap and Tax Freeze
Legislation Details
for Fire Districts
Presented byIngrid Otto-Jones, CPA
Senior Examiner, Monitoring and Analysis Unit
Office of the State Comptroller
Thomas P. DiNapoli
State & Local Government Accountability Local Government & School Accountability
Andrew A. SanFilippo Gabriel F. Deyo
Executive Deputy Comptroller Deputy Comptroller
Topics for Today’s Session
Review of Property Tax Cap Legislation
Review of Tax Freeze Legislation
Reporting Requirements
Walk through of Online Service Filing System
OSC Role
Common Errors
Property Tax Cap - Summary
Tax cap limits total levy set by local governments,
not assessed value or tax rate.
Local Governments (including Fire Districts)
and School Districts may not adopt a budget that
requires a tax levy that exceeds the prior year’s levy
by more than 2% OR the rate of inflation,
whichever is less, unless they officially override the
tax levy limitation.
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Fire Districts vs. Fire Protection
Districts
Fire Districts have their own levy limit and are
NOT part of their municipality’s tax cap.
Levies for Fire Protection Districts (as opposed to
Fire Districts) are part of the municipality’s tax
levy limit.
BLENDED Fire Districts
Blended Fire Districts are Fire Districts that have
the town board as their fire commissioners, therefore they
are NOT independent.
They are reported within the Town’s AUD and do
NOT file separately for Tax Cap purpose.
There are only six “Blended Fire Districts” in New
York State.
Fire Districts Revenues
Real Property Taxes and
Assessments93%
All other Revenues
6%
State Aid & Federal Aid
1%
Limited by
Tax Cap
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Reporting Requirements for Tax Cap Law
Local Governments and Fire Districts must
calculate the tax levy limit and report the data
elements to the State.
Must use OSC’s form to report.
User IDs and Password to access and submit forms sent
to every local government.
Form must be submitted prior to budget adoption.
Report must be submitted even if an override is
enacted.
Override
The law allows local governments and school
districts to override the levy limit
Must enact a local law or resolution to override
before budget adoption Counties, cities, towns and villages: local law
Fire districts and special districts: resolution
Governing board must approve by at least 60% of
voting power (i.e., 3 out of 5)
Common Errors for Fire Districts
Not Calculating the Limit
Districts that failed to calculate the limit and submit the form
were more likely to set a levy that exceeded the limit
Tax Cap Reserve
Many districts entered capital and equipment reserve amounts
into the tax cap reserve line. An entry in this line should only
be made if the district exceeded the levy limit in the prior year,
without a proper override.
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Tax Cap Formula
Total Real Property Tax levy
When determining your prior year levy you should
consider all the variables
Omitted Tax (does affect Fire Districts)
Chargeback's (usually only affects Counties)
Sales Tax
Special Districts
Special Assessments
Anything else..
OSC Online Reporting System
Enrollment
Maintain your own contact information
Change or retrieve lost passwords
Create user rights and assign roles
Access more than one application with same account.
Tax Cap Form
Tax Freeze Certification Form
Constitutional Tax Limit Form
Hopefully more soon…….
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OSC Online Reporting System -continued-
Once enrolled you will be able to navigate through
the system.
For Tax Cap Filing - Go to “My Apps” then Local
Government Real Property Tax Cap Filing System
Click on the fiscal year of your filing
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Tax Cap filing form - Prior Year Levy amount
Tax Cap Reserve
Guidance on Reserve for Excess Levy
If actual levy exceeds the levy limit, and no
override was passed, the excess must be placed in
a reserve
This excess amount, plus any interest, must be
used to offset the levy in the next fiscal year
Accounting bulletin on our website
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Use of Reserve for Excess Levy
The amount of the reserve is subtracted from the
base levy, to adjust it down to where it would have
been if the excess levy had not happened
The total levy limit for FYB 2013 is then reduced
by the amount of the reserve offset, to calculate the
amount by which you may increase your levy within
the limit
New form will take care of this for you
Tax Cap Reserve OffsetTax Levy Limit - Calculations and Total
2013 2014 2015
Tax Levy Limit (Cap) Before Adjustments and Exclusions
Tax levy PY 50,000 51,000 49,000 PY tax levy should be what was actually levied
+ Reserve used to reduce PY levy - - 1,000 PY offset should be added back to PY tax levy to make LG whole
- Total Reserve Amount (including interest earned) 1,000 -
PY levy is reduced to prevent the LG from getting a benefit from overlevying without a proper override
x Tax base growth factor 1.0000 1.0000 1.0000
+ PILOTS receivable (prior year)
x Allowable levy growth factor 1.0000 1.0000 1.0000
- PILOTS receivable (current year) - - -
+ Available Carryover - - -
+ Net adjustmens and exclusions - - -
Tax Levy Limit with Adjustments and Exclusions 50,000 50,000 50,000
Total Tax Cap Reserve Amount including interest - used to reduce levy - 1,000 -
Proposed Levy 51,000 49,000 50,000 Amount levied on tax roll
Difference Between Tax Levy Limit + Exclusions and Proposed Levy (1,000) - -
Note: For ease of demonstration, the tax base growth factor and allowable levy growth factor have been set to 1.00
Tax Base Growth Factor
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PILOT’s Receivable
Tort Exclusion
Available Carryover
If you levied less than the amount of your LG’s tax
levy limit before exclusions in FYE 2014, you may
carry over the lesser of:
The difference between the tax levy limit and the actual
levy, or
1.5% of the prior year tax levy limit
The system automatically calculates the amount.
The calculated amount needs to be re-entered into the
form to be carried forward to the summary page.
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Carryover
Pension Exclusion
Transfers of Functions
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Tax Cap Calculation Page
Tax Cap Calculation Page
Property Tax Freeze-Overview
Property Tax Freeze Credit
o Part FF of Chapter 59 of the Laws of 2014
o Provides a Real Property Tax Credit to qualified
homeowners
Homeowners:
o Must be eligible for School Tax Relief (STAR)
exemption
o Live in a taxing jurisdiction that both:
Stayed within its property tax cap limits
Develop a Government Efficiency Plan
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Property Tax Freeze-Overview (continued)
Calculation will be performed by Tax and
Finance
The Freeze Credit will be equal to the greater of:
The actual increase in their homeowner’s tax
bill or
The previous year’s tax bill multiplied by an
inflation factor (the lesser of 2% or inflation)
Implementation Of Law
Law will be phased in over a two-year period
Credits will begin
2014 for School District and Big 4 Cities
2015 for CCTV and Independent Special
Districts (for fiscal years beginning in 2015)
Year 1 and 2 of law
Year 1
Jurisdiction must not exceed the tax cap.
Year 2
Jurisdiction must not exceed the cap, AND
Jurisdiction must develop a Government
Efficiency Plan which must be approved by the
Division of Budget.
For More Info go to: http://www.tax.ny.gov/pit/property/property_tax_freeze.htm
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Local Government Requirements
CEO or budget officer certifies no later than the
21st day of fiscal year
Adopted budget complies with Levy Limit
Override law has been repealed
Year Two of Credit
Same certification as above
Efficiency plan adoption
Submit to Division of Budget by June 1st, 2015
Savings of 1% in years ending 2017, 2018, and 2019
Agency Responsibilities
The Office of State Comptroller:
Collect Certifications (Form in development)
Override legislation repealed
Collect proposed and adopted budgets information
Department of Tax and Finance:
Calculate credit for each parcel
Advance payment of credit
Determine homeowners eligibility
Division of Budget:
Collect/Approve efficiency plans
Tax Freeze Filing Process
Tax Freeze Form will be available on OSC Online
Services in November.
OSC will send out e-mails to the Chairman of the
Board of Commissioners and to the Treasurer of
each Fire Districts.
You MUST notify OSC if your contact information
has changed within the last year.
E-mail will contain detailed information how to
sign in and how to set up the account appropriately.
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Questions/Contact Information Office of the State Comptroller
Property Tax Cap Application/Tax Freeze Certification Form
1-866-321-8503
Option 1 – Technical Issues
Option 3 – Tax Cap and Tax Freeze application questions
