What's happening
This bill allows certain low-wealth New York school districts to establish tax cap reserve funds and spend from them without voter approval.
Why it matters
Targets the most financially constrained school districts. by defining eligibility based on a very low combined wealth ratio (0.35 or less), ensuring that only districts with limited local resources can use this tool.
Allows these districts to better manage unpredictable or rising costs. (such as spikes in special education, transportation, or facility expenses) without needing to repeatedly seek voter approval, which can be difficult in low-wealth communities.
Imposes safeguards on reserve fund size and use. by requiring that the fund not exceed “reasonably necessary” amounts for anticipated increases and mandating that unused funds be returned to the general fund within four years, preventing indefinite stockpiling.
Could help stabilize educational programs and staffing. in low-wealth districts, as leaders gain flexibility to address budget pressures without risking service cuts or failed budget votes that could negatively impact students.
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Who cares
Headline styles
Let Poorer Schools Save Funds
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Recommit, enacting clause stricken
- Referred to education
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1006
2019-2020 Regular Sessions
IN SENATE
January 10, 2019
Introduced by Sens. YOUNG, GALLIVAN -- read twice and ordered printed, and when printed to be committed to the Committee on Education
AN ACT to amend the education law, in relation to authorizing school districts with low combined wealth ratios to establish tax cap reserve funds
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 3651 of the education law is amended by adding two new subdivisions 1-c and 3-b to read as follows:
1-c. Notwithstanding the provisions of subdivision one of this section, any school district having a combined wealth ratio, as defined in paragraph c of subdivision three of section thirty-six hundred two of this title, which is thirty-five one-hundredths or less, may establish a reserve fund for the payment of school district expenditures for any school year to the extent the expenditure of monies therefor would cause such school district to exceed its tax levy limit pursuant to section two thousand twenty-three-a of this chapter, without approval by the qualified voters of the district; provided, however, that the total of the monies held in such reserve fund shall not exceed that amount which might reasonably be deemed necessary to meet anticipated increased expenditures by the school district in future school years. Any monies deposited to such reserve fund which will not reasonably be required to be expended for the purpose of complying with the district's tax levy limit shall be returned to the general fund on or before the first day of the fourth fiscal year following the deposit of such monies to said reserve fund.
3-b. Notwithstanding the provisions of subdivision three of this section, any school district which establishes a reserve fund in accordance with subdivision one-c of this section may make expenditures from such fund for the purposes specified in such subdivision without authorization of the voters.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03740-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the education law, in relation to authorizing school districts with low combined wealth ratios to establish tax cap reserve funds
Purpose
To allow school districts with a low combined wealth ratio to establish a reserve fund for the payment of school district expenditures, such that the reserve fund does not exceed an amount which might be reason- ably deemed necessary to meet anticipated increased expenditures.
Summary of provisions
Section 1 amends Section 3651 of the Education Law by adding two new subdivisions 1-c and 3-b.
Justification
Many rural and small school districts face financial hardships. Small and rural school districts take in only limited revenue increases when raising the tax levy to the two-percent cap, while districts with higher combined wealth ratios (CWRs) may see a significant increase in revenue through a similar two-percent levy increase. Many of these poor and rural school districts rely heavily on state aid to make up for the limitations of their local tax levy.
This bill will help ensure academic program stability by allowing poor school districts with a low CWR to establish a reserve fund for the payment of school district expenditures for any school year, to the extent that such expenditures would cause the school district to exceed its tax levy limit. Schools will be able to use the reserve fund to mitigate program cuts that could ensue if the tax levy is not able to meet budget needs.
Reserve funds are necessary for a variety of purposes, such as to protect against difficult, changing financial circumstance. Enabling school districts to establish tax cap stabilization reserve funds would help them meet anticipated increased expenditures in future years while also ensuring compliance with the tax cap.
Legislative history
2017,2018: S.826 Referred to Education
2015,2016: S.5318 Referred to Education
Fiscal implications
None.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.