What's happening
This bill allows New York school districts to cap property taxes and instead finance education by imposing an income tax surcharge on district residents, subject to voter approval.
Why it matters
Potential Shift in Tax Burden. By allowing school districts to replace some property tax revenue with an income tax surcharge, the bill could make school funding more closely tied to a resident’s ability to pay, potentially easing the burden on those with fixed or lower incomes who may struggle with high property taxes.
Community Control and Transparency. The process requires school districts to form a study commission, hold public hearings, and submit any income tax surcharge proposal to a public vote. This could increase local engagement, transparency, and accountability in school funding decisions, ensuring changes reflect community preferences.
Complexity and Administrative Changes. Implementing a local income tax surcharge introduces new administrative layers, such as coordination between school districts, the State Department of Taxation, and the Comptroller. Residents, employers, and tax professionals would need to adapt to new compliance processes, withholding rules, and tax return requirements at the school district level.
Equity and Revenue Implications. The bill includes a “renter’s credit” and specific definitions of who is subject to the surcharge (e.g., primary residence owners, certain trusts/estates), which could address equity concerns for non-homeowners. However, shifting to income-based school funding may impact the overall predictability and stability of local education revenues, especially in districts with significant income disparities.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
School boards and district voters
Eligible districts could replace part of their residential property tax levy with a resident income tax surcharge, subject to a study commission process and voter approval.
Homeowners
Owners of primary residences who are subject to the surcharge could receive school property tax reductions funded by surcharge revenue, with each parcel’s reduction shown on its tax bill.
Renters
District residents who rent would face the surcharge if adopted, while qualified renters could claim a credit equal to 1.25 percent of adjusted rent.
Employers and the Department of Taxation and Finance
Employers would withhold the surcharge from residents’ wages, and the department would administer and collect it.
Headline styles
Cap School Property Taxes
Plain English, a few words. Used as the page title.
Sponsors
3 Co-sponsors
History
- Referred to education
Full text
21 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
10136
IN ASSEMBLY
March 16, 2018
Introduced by M. of A. GALEF, GOTTFRIED, GUNTHER, ABINANTI -- read once and referred to the Committee on Education
AN ACT in relation to enacting the school district property tax relief act; to amend the education law, in relation to adopting a school income tax surcharge (Part A); and to amend the real property tax law and the tax law, in relation to providing for the restriction of the school district real property tax on residential property and to authorize the imposition by school districts of a surcharge on the state income tax of district residents to finance public education (Part B)
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as "the school district property tax relief act".
§ 2. This act enacts into law major components of legislation which are necessary to implement the school district property tax relief act. Each component is wholly contained within a Part identified as Parts A and B. The effective date for each particular provision contained within such Part is set forth in the last section of such Part. Any provision in any section contained within a Part, including the effective date of the Part, which makes reference to a section "of this act", when used in connection with that particular component, shall be deemed to mean and refer to the corresponding section of the Part in which it is found. Section four of this act sets forth the general effective date of this act.
PART A
Section 1. Legislative findings and declarations. The legislature finds that the property tax has long been relied upon by school districts as a principal method to finance public education. The property tax, however, is regressive and fails to account for a taxpayer's ability to pay, and falls hardest on those with reduced or fixed incomes. Therefore, to relieve the mounting burden on residential prop-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13991-01-7
A. 10136 2
erty taxpayers and to provide local school districts with greater flexibility to finance public education, while assuring the continued delivery of quality educational services, the legislature finds that school districts shall be authorized, at local option, to impose a school district income tax surcharge on the state personal income tax of district residents to replace a portion of the school district property tax.
§ 2. The education law is amended by adding a new section 1501-d to read as follows:
§ 1501-d. Adoption of school district income tax surcharge. 1. The board of trustees or board of education of any school district other than a school district of a city subject to the provisions of article fifty-two of this chapter may adopt, by resolution, a school district income tax surcharge imposed pursuant to the authority of article thirty-C of the tax law, to finance public education, in accordance with a proposition submitted to and approved by electors of the school district as authorized pursuant to this section.
2. Upon a majority vote of the board of trustees or board of education of a school district or upon the filing of a petition with the chief executive officer of the school district, a study commission shall be created. A petition to create a study commission within a school district shall be sufficient if it is signed and acknowledged by qualified electors of the school district, in number equal to five per centum of the total number of electors within the school district qualified to vote in the general election immediately preceding filing of the petition.
3. (a) The study commission formed pursuant to this section shall present a written report to the board of trustees or the board of education setting forth either a school district income tax surcharge plan or a written recommendation that no plan be adopted. Such recommendation shall include the reasons for rejecting a surcharge plan. The study commission shall file the report with the board of trustees or the board of education on or before one year from the date of presentation of the petition to the chief executive officer of the school district or vote of the board of trustees or the board of education directing the formation of the study commission. If the commission fails to make a recommendation within the allotted time, the board shall extend the commission or assume its responsibilities.
(b) The commission shall be composed of at least nine members appointed by the board of trustees or the board of education. Membership shall be comprised of representatives of property owners residing in the school district, commercial property owners whose principal place of business is located within the school district, and the board of trustees or board of education, but shall not include more than one trustee of a board of education or member of a board of education.
(c) Members of a study commission established pursuant to this section shall file oaths of office with the appointing authority. Their terms shall extend to and expire upon submission of the report to the board of trustees or the board of education as provided in this section. Members shall receive no compensation for membership on the study commission. Costs and expenses of the study commission if approved by the board shall be paid by the school district. Such commission shall organize and form such subcommittees, may establish meetings and hold informational hearings as it deems desirable and shall consult with the designees of the director of the office of real property tax services and the commissioner of taxation and finance.
A. 10136 3
(d) A study commission shall hold at least one public hearing in the school district at least sixty days prior to submission of its report to the board of trustees or the board of education, at which the public shall have an opportunity to be heard. The study commission shall publish notice of the public hearing on any official website and in at least one newspaper of general circulation within the school district at least seven and no greater than ten days prior to the date of such public hearing. Such notice shall specify the day, hour and place such hearing shall be held.
4. A study commission recommending a school district income tax surcharge shall adopt a plan which describes the rate of the surcharge to be imposed, the manner in which real property taxes for school district purposes will be restricted in accordance with section thirteen hundred seven of the real property tax law, and any such other matters as may be desirable or necessary to describe the income tax surcharge to be imposed or its administration. Such commission plan shall describe restrictions, if any, upon the authority of a school district, acting through its board of trustees or board of education, to modify the first year rate of the income tax surcharge in subsequent years. The restrictions may include, but are not limited to, the following:
(a) requiring voter approval for any change in the surcharge rate;
(b) limiting the amount of a rate change in one year or over a number of years;
(c) requiring the commission to be reconvened to study and adopt a rate change;
(d) requiring a supermajority of the board of trustees or the board of education to approve a rate change; or
(e) some combination of the above.
5. (a) Upon the study commission's presentation of a plan, or recommendation not to adopt a plan, the board of trustees or the board of education shall decide whether to accept or reject the plan or recommendation of the study commission. The board of trustees or the board of education shall take such action on the study commission's recommendation within one hundred twenty days of its presentment to the board of trustees or the board of education. The board of trustees or the board of education shall hold at least one public hearing in the school district at least thirty days prior to taking action on the study commission's recommendation, at which the public shall have an opportunity to be heard. The board of trustees or the board of education shall publish notice of the public hearing in at least one newspaper of general circulation within the school district, at least seven and no greater than ten days, prior to the date of such public hearing. Such notice shall specify the day, hour and place such hearing shall be held. If the plan is accepted by a majority of the board of trustees or the board of education, a proposition shall be prepared by the board of trustees or the board of education and submitted to the voters at the next regular school election.
(b) Upon acceptance of the plan and formulation of the proposition the board of trustees or the board of education shall publish the full text of the proposition and the school district tax surcharge plan in at least one newspaper of general circulation within the school district at least thirty days prior to the date of election at which the school district voters shall vote on the plan and proposition. Copies of the plan and proposition shall be made available to the public at the offices of the school district at any time during regular business hours and on any official website maintained by the school district.
A. 10136 4
6. (a) A proposition for the imposition of a school district income tax surcharge shall state "Shall the (name of school district) be empowered to adopt a school district income tax surcharge pursuant to the school district income tax surcharge plan?" The proposition shall also contain an abstract of such plan which shall (i) identify in full the option restricting the school district levy of real property tax chosen pursuant to section thirteen hundred seven of the real property tax law, and (ii) concisely state in plain language the purpose and effect of adopting such plan including the general effect on residential real property taxpayers, the income tax surcharge rate expected to be imposed, and restrictions, if any, applicable to changes in such rate.
(b) Upon approval of a majority of the qualified electors within a school district, the proposition shall be approved. Upon such approval a certificate of such election shall be filed with the clerk of the school district named in the proposition, the commissioner and the commissioner of taxation and finance.
7. The levy of real property taxes by any school district to finance education which adopts a school district income tax surcharge shall be subject to the provisions of section thirteen hundred seven of the real property tax law.
8. If adopted by the board of trustees or the board of education on or before March thirty-first in any year, with notice to the commissioner of taxation and finance, as provided in section thirteen hundred sixtyone of the tax law on or before such date, such school district income tax surcharge plan shall become effective from and after the first day of January next succeeding its adoption. If adopted after March thirtyfirst in any year, or with notice after such date, such local income tax surcharge plan shall become effective from and after one year from the first day of January next succeeding its adoption.
§ 3. This act shall take effect immediately.
PART B
Section 1. Section 1306 of the real property tax law is amended by adding a new subdivision 6 to read as follows:
6. The levy of taxes by any school district which imposes a personal income tax pursuant to article thirty-C of the tax law shall be subject to the restrictions of section thirteen hundred seven of this article.
§ 2. The real property tax law is amended by adding a new section 1307 to read as follows:
§ 1307. Reduction in the levy of real property taxes. 1. Where a school district elects to impose a school district income tax surcharge in accordance with article thirty-C of the tax law, the amount to be raised by levy against residential real property in the school district shall be reduced by the dollar amount raised pursuant to such surcharge for the calendar year immediately preceding the year of commencement of the school fiscal year. For the purposes of this section the term "residential real property" shall be limited to primary residences as defined in subdivision three of section four hundred twenty-five of this chapter.
2. The amount of reduction for each parcel of residential real property shall be stated on the school tax bill. The school tax bill also shall show the amount of the total levy, the amount to be raised by the residential property in the school district, the amount of surcharge raised reducing such portion of the levy and the amount to be raised by the non-residential property in the district. Comparison to the preced-
A. 10136 5
ing year shall also be shown in addition to such other information as the commissioner of education shall specify. Property owners not subject to the income tax surcharge imposed by article thirty-C of the tax law shall not receive a reduction in the real property taxes pursuant to this section.
§ 3. Subdivision 1 of section 202 of the real property tax law is amended by adding a new paragraph (q) to read as follows:
(q) Direct the executive director of the office of real property services to develop guidelines and provide technical assistance to a study commission of a school district formed pursuant to section fifteen hundred one-d of the education law in order to implement the provisions of article thirty-C of the tax law and section thirteen hundred seven of this chapter.
§ 4. Paragraph 1 of subdivision (b) of section 9 of the tax law, as amended by chapter 166 of the laws of 1991, is amended to read as follows:
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.