What's happening
This bill limits annual increases in local government medical assistance expenditures, requires related property or income tax reductions, and establishes real property tax levy caps for New York City.
Why it matters
Caps local government medical assistance spending growth. By limiting annual increases in local governments’ medical assistance expenditures, the bill could force localities to more tightly control Medicaid and related spending, potentially reducing upward pressure on local budgets and taxes.
Mandates direct tax reductions if state/federal Medicaid costs fall. If counties or New York City see their Medicaid contributions reduced by state or federal action, they must lower property or income taxes by an equivalent amount, ensuring that residents directly benefit from public-sector savings rather than governments repurposing the funds elsewhere.
Imposes a real property tax levy cap for New York City. The bill introduces a specific formula restricting how much NYC can increase property tax levies year-to-year, tying allowable growth to inflation and limiting exceptions. This could lead to more predictable, stable property tax bills for city residents and businesses, but may constrain the city’s fiscal flexibility.
Requires supermajority for tax increases above the cap. The city council could only override the property tax cap with a two-thirds vote, making it significantly harder to raise taxes above the prescribed limit and strengthening taxpayer protections against large or unexpected increases.
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Who cares
Headline styles
Limit Big City Property Taxes
Plain English, a few words. Used as the page title.
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History
- Referred to local government
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Limit City Property Tax Increases
In Assembly Committee · Social Services · Sponsor Colin Schmitt
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1059
2019-2020 Regular Sessions
IN SENATE
January 10, 2019
Introduced by Sens. YOUNG, AKSHAR, FELDER, FUNKE, LANZA, RITCHIE -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government
AN ACT to amend chapter 58 of the laws of 2005 authorizing reimbursements for expenditures made by or on behalf of social services districts for medical assistance for needy persons and the administration thereof, in relation to medical assistance expenditure… Show allHide
AN ACT to amend chapter 58 of the laws of 2005 authorizing reimbursements for expenditures made by or on behalf of social services districts for medical assistance for needy persons and the administration thereof, in relation to medical assistance expenditure amounts; to amend the general municipal law, in relation to county property tax levy reductions resulting from medical assistance program expenditure reductions; and to amend the general municipal law and the municipal home rule law, in relation to establishing limitations upon real property tax levies in cities with a population of one million or more
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 1 of part C of chapter 58 of the laws of 2005, authorizing reimbursements for expenditures made by or on behalf of social services districts for medical assistance for needy persons and the administration thereof is amended by adding a new subdivision (c-2) to read as follows:
(c-2) Notwithstanding any provisions of subdivision (c) or (c-1) of this section to the contrary, effective April 1, 2020, for the period January 1, 2020 through December 31, 2020, and for each calendar year thereafter, the medical assistance expenditure amount for the social services district for such period shall be the greater of (1) zero; or (2) the previous calendar year's medical assistance expenditure amount minus ten percent of the medical assistance expenditure amount for the period January 1, 2019 through December 31, 2019. Provided, however, the local contribution for a city with a population of one million or more shall not be reduced by more than two billion three hundred million dollars.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04019-01-9
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§ 2. The general municipal law is amended by adding a new section 3-e to read as follows:
§ 3-e. County property tax levy reduction resulting from medical assistance program expenditure reductions. Notwithstanding any other provision of law to the contrary, in the event a county's local contribution to New York state's share of payments under the medical assistance program are reduced or eliminated as a result of changes in federal or state statute, the amount of such reduction or elimination shall be applied as an equal dollar amount reduction in the property tax levy of such county.
§ 3. Notwithstanding any other provision of law to the contrary, for a city with a population of one million or more, in the event the local contribution to New York state's share of payments under the medical assistance program are reduced or eliminated as a result of changes in federal or state statute, the amount of such reduction or elimination shall reduce city personal income taxes in an amount equal to the reduction in such city's share of payments. Such reduction shall be an equal rate reduction applied to all tax brackets.
§ 4. The general municipal law is amended by adding a new section 3-f to read as follows:
§ 3-f. Limitation upon real property tax levies by cities having a population of one million or more. 1. Unless otherwise provided by law, the amount of real property taxes that may be levied by or on behalf of any city having a population of one million or more shall not exceed the tax levy limitation established pursuant to this section.
2. When used in this section:
(a) "Allowable levy growth factor" shall be the lesser of: (i) one and two one-hundredths; or (ii) the sum of one plus the inflation factor; provided, however, that in no case shall the levy growth factor be less than one.
(b) "Approved capital expenditures" means the expenditures associated with capital projects that have been approved by the qualified voters of the local government.
(c) "Available carryover" means the sum of the amount by which the tax levy for the prior fiscal year was below the tax levy limit for such fiscal year, if any, but no more than one and one-half percent of the tax levy limit for such fiscal year.
(d) "Capital tax levy" means the tax levy necessary to support capital expenditures, if any.
(e) "Coming fiscal year" means the fiscal year of the local government for which a tax levy limitation shall be determined pursuant to this section.
(f) "Inflation factor" means the quotient of: (i) the average of the national consumer price indexes determined by the United States department of labor for the twelve-month period ending six months prior to the start of the coming fiscal year minus the average of the national consumer price indexes determined by the United States department of labor for the twelve-month period ending six months prior to the start of the prior fiscal year, divided by: (ii) the average of the national consumer price indexes determined by the United States department of labor for the twelve-month period ending six months prior to the start of the prior fiscal year, with the result expressed as a decimal to four places.
(g) "Local government" means a city having a population of one million or more.
S. 1059 3
(h) "Prior fiscal year" means the fiscal year of the local government immediately preceding the coming fiscal year.
(i) "Tax levy limitation" means the amount of taxes a local government is authorized to levy pursuant to this section, provided, however, that the tax levy limit shall not include the local government's approved capital tax levy, if any.
3. (a) Beginning with the fiscal year that begins in two thousand nineteen, no local government shall adopt a budget that requires a tax levy that is greater than the tax levy limitation for the coming fiscal year.
(b) The state comptroller shall calculate the tax levy limitation for each local government by the one hundred twentieth day preceding the commencement of each local government's fiscal year, and shall notify each local government of the tax levy limitation so determined.
(c) The tax levy limitation applicable to the coming fiscal year shall be determined as follows:
(i) Ascertain the total amount of taxes levied for the prior fiscal year.
(ii) Add any payments in lieu of taxes that were receivable in the prior fiscal year.
(iii) Subtract the approved capital tax levy for the prior fiscal year, if any.
(iv) Subtract the levy attributable to a large legal settlement of a tort action excluded from the levy limitation in the prior fiscal year, if any.
(v) Multiply the result by the allowable levy growth factor.
(vi) Subtract any payments in lieu of taxes receivable in the coming fiscal year.
(vii) Add the available carryover, if any.
(d) In the event the city council of a local government has approved a legal settlement of a tort action against the government, the annual costs of which exceed ten percent of the property taxes levied by the local government in the prior fiscal year, the state comptroller, upon application by the local government, may adjust the tax levy limitation for the coming fiscal year applicable to such local government, by adding the annual costs of such settlement to the tax levy limitation.
(e) The state comptroller shall determine the portion of the tax levy of each local government that is attributable to any increase or decrease over the prior year in the cost of the local government share of direct cash assistance to persons eligible for the federal-state-local temporary assistance to needy families program or the state-local safety net assistance program and shall adjust the tax levy limitation for such local government to reflect such change.
4. A local government may adopt a budget that requires a tax levy that is greater than the tax levy limitation for the coming fiscal year only if the city council of such local government first enacts, by a twothirds vote of the total voting power of such city council, a local law to override such limitation for such coming fiscal year only.
5. In the event a local government's actual tax levy for a given fiscal year exceeds the maximum allowable levy as established pursuant to this section due to clerical or technical errors, the local government shall place the excess amount of the levy in reserve in accordance with such requirements as the state comptroller may prescribe, and shall use such funds and any interest earned thereon to offset the tax levy for the ensuing fiscal year.
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§ 5. Paragraphs j and k of subdivision 2 of section 23 of the municipal home rule law are relettered paragraphs k and l, and a new paragraph j is added to read as follows:
j. Overrides the tax levy limitation applicable for the coming fiscal year in accordance with section three-f of the general municipal law.
§ 6. This act shall take effect immediately and sections four and five of this act shall first apply to the levy of taxes by local governments for the fiscal year that begins in 2020.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend chapter 58 of the laws of 2005 authorizing reimburse- ments for expenditures made by or on behalf of social services districts for medical assistance for needy persons and the administration thereof, in relation to medical assistance expenditure amounts; to amend the general municipal law, in relation to county property tax levy reductions resulting from medical assistance program expenditure reductions; and to amend the general municipal law and the municipal home rule law, in relation to establishing limitations upon real proper- ty tax levies in cities with a population of one million or more
Purpose
This bill provides for a takeover of the local share of Medicaid state- wide over a 10-year period beginning in calendar year 2020. This bill also ensures that any Medicaid cost savings to a county that takes effect due to federal or state action are passed on as income tax reductions in New York City, and as real property tax reductions for the rest of the State.
Summary of provisions
Section 1: Section 1 of chapter 58 of the laws of 2005 is amended by adding a new subdivision (c-2) to provide for the takeover of the local share of Medicaid costs over a 10-year period and limits the reduction in cost for New York City to equal the reduction in cost to the rest of the state.
Read the full memo (686 words)
Section 2: Adds a new section 3-e to the general municipal law which provides that in the event federal or state statute is modified to elim- inate or reduce a county's local contributions to New York's share of payments under the Medicaid program, the amount of the reduction shall be applied as a correlating reduction in the property tax levy of such county.
Section 3: Provides that in the event federal or state statute is modi- fied to eliminate or reduce local contributions to New York City's share of payments under the Medicaid program, the amount of the reduction shall be applied as a correlating reduction in New York City personal income taxes.
Section 4 and 5: Adds a new § 3-f to the General Municipal Law to estab- lish a real property tax levy cap for New York City.
Justification
Since the enactment of the Medicaid program in 1965, local social service districts (counties and the City of New York) have been required to share in both the cost and administrative operation of the program. The State is responsible for program design and, over the course of several years, the overall administration of the program has been gradu- ally shifting to the state. The counties' Medicaid share is currently capped at 2015 levels. However, the localities continued to contribute $7.6 billion to the program in FY 2018.
This bill would enact a phased-in state takeover of the local share of Medicaid over a 10-year period, lifting substantial property tax pres- sure on those counties. Furthermore, the bill ensures that New York's tax burden on local property taxpayers outside of New York City is alle- viated by requiring that any reduction in county Medicaid costs result- ing from state or federal legislative action be passed on to resident property taxpayers on a dollar for dollar basis. For New York City resi- dents, the bill reduces the City income tax burden by requiring that any reduction in City Medicaid costs resulting from state or federal legis- lative action be passed on in the form of income tax relief.
New York State property taxes are among the highest taxes in the nation. High property taxes jeopardize quality of life and the ability to home- owners to remain in their homes. This bill would enact a 2 percent limit on New York City's ability to raise property taxes and will relieve taxpayers from unexpected high property tax increases.
Legislative history
2018: S.8412 Passed Senate
Fiscal implications
None in FY 2020.
Effective date
This act shall take effect immediately and sections four and five of this act shall first apply to the levy of taxes by local governments for the fiscal year that begins in 2020.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.