Relates to providing state aid to public school districts in which tax exempt entities are situated

BILL NUMBER:S4522

Title of bill

An act to amend the real property tax law, in relation to providing state aid to certain public school districts in which tax exempt entities are situated; and providing for the repeal of such provisions upon expiration thereof

PURPOSE OR GENERAL IDEA OF BILL:: To provide compensation for lost property tax revenue for those public school districts in which 25 percent or more of the assessed value of real property is owned by tax exempt entities.

SUMMARY OF SPECIFIC PROVISIONS:: Section 1 adds a new section 546-a to the real property tax law to provide additional state aid to public school districts in which 25 percent or more of the total assessed value of real property therein is owned by tax exempt entities. The State Comptroller is directed to create an application form the district must use, and establish the date by which all applications must be submitted.

The Commissioner of the State Department of Education is directed to make payments, not to exceed $2.5 million each year in aggregate, to such district in compensation for lost revenue. In the event that the aggregate amount exceeds $2.5 million in any given year, such payments will be made on a proportional basis.

To prevent manipulation of assessed values to qualify for compensation, the annual increase in assessed value for any tax exempt property for the purposes of this chapter is limited to 2 percent, beginning with the base year of the 2012-13 assessment. roll. The Commissioner is also authorized to exclude any parcel, the assessed value of which he or she determines is artificially high and disproportionate to taxable similar properties within the district.

Section 2 is the effective date.

JUSTIFICATION:: Public school districts across the state are facing serious budgetary constraints, created by a combination of rising costs and diminishing tax base. Those constraints have forced significant cost-cutting measures, ranging from academic and athletic program eliminations to the lay-off of administrative and teaching staff. These constraints are particularly severe for school districts in which a significant portion of real property is owned by tax exempt entities, including religious institutions, not-for-profit organizations and public land.

Some districts have received specific supplemental aid from the state to compensate them for this subsequent loss of real property tax revenue. This legislation seeks to establish basic criteria for any public school district to qualify for such additional aid,. Under its provisions, any public school district in which 25 percent or more of its assessed real property value is tax exempt qualifies for compensatory aid from the state.

PRIOR LEGISLATIVE HISTORY:: New Bill.

FISCAL IMPLICATIONS:: The fiscal impact to the state will not exceed $2.5 million per year for ten years.

EFFECTIVE DATE:: The January 1 next succeeding the date on which the bill becomes law, and shall be deemed repealed after the 2022-23 assessment roll.