What's happening
This bill allows school districts reorganizing in New York to phase in real property tax rate changes over up to twenty years.
Why it matters
Extends the phase-in period for property tax rate changes after school district mergers from 10 to 20 years. , giving communities more time to adjust to new tax rates and potentially reducing financial shock for residents.
Provides local school boards greater flexibility in managing tax impacts. of district reorganizations, enabling them to structure tax transitions based on community needs and preferences following public hearings.
May facilitate more school district consolidations. by making the process less disruptive for taxpayers, possibly improving educational offerings and efficiency through reorganization.
Could affect long-term planning for both school budgets and homeowner finances. , as tax rate changes will be distributed over a longer period, impacting projections for public services and property values.
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Who cares
Headline styles
Extend School Tax Phase-In
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to education
- Print number 3720a
- Amend and recommit to education
- Referred to education
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.
Extend School Tax Phase-In
In Assembly Committee · Education · Sponsor Fred Thiele
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
S. 3720--A A. 5513--A
2019-2020 Regular Sessions
SENATE - ASSEMBLY
February 13, 2019
IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered printed, and when printed to be committed to the Committee on Education -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
IN ASSEMBLY -- Introduced by M. of A. THIELE -- read once and referred to the Committee on Education -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the education law, in relation to school district reorganizations and real property tax rates
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 3613 of the education law, as added by section 6 of part A of chapter 56 of the laws of 2014, is amended to read as follows:
§ 3613. School district reorganizations and real property tax rates. 1. When two or more school districts propose to reorganize pursuant to sections fifteen hundred eleven through fifteen hundred thirteen, fifteen hundred twenty-four, fifteen hundred twenty-six, seventeen hundred five, or eighteen hundred one through eighteen hundred three of this chapter, and under the law that would otherwise be applicable, the reorganization would have an impact upon the school tax rates within the areas served by the school districts that existed prior to the reorganization, notwithstanding any other provision of law to the contrary, the boards of education or trustees of all the school districts participating in the proposed reorganization may opt to have that impact deferred for a one-year period and/or phased-in over a period as may be determined by the boards of education or trustees of all participating school districts in the manner prescribed by this section but which shall not exceed a [ten-year] twenty-year period. To exercise such option, the boards of education or trustees of all participating school districts, after conducting a public hearing, may adopt a resolution at least
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03204-02-9
S. 3720--A 2 A. 5513--A
forty-five days prior to the special district meeting at which the reorganization vote will be held, to defer and/or phase-in the impact as provided herein. If the board of education or trustees of any participating school district does not approve such a resolution opting for a common phase-in period, the provisions of this section shall not apply.
2. During the one-year deferral period, the tax rate for each portion of the school district shall be calculated in the following manner:
(a) Determine the assessed value tax rate that applied for the school year immediately preceding the school year in which the reorganization took effect.
(b) Multiply that assessed value tax rate by the state equalization rate applicable to the portion for the school year immediately preceding the school year in which the reorganization took effect.
(c) Divide the product so determined by the state equalization rate applicable to the portion for the first school year of the reorganized school district. The quotient is the assessed value tax rate for the portion for that school year. Provided, that if the sum of the real property tax levies in all of the portions in the school district, using the assessed value tax rates computed pursuant to this subdivision, would yield a real property tax levy that is above or below the total real property tax levy specified in the school district budget for the current school year, the assessed value tax rates shall all be decreased or increased proportionately so as to yield the specified real property tax levy amount.
3. During each year of a phase-in period, whose duration up to [ten] twenty years shall have been determined by the boards of education or trustees of the constituent school districts, the tax rate for each portion of the reorganized school district shall be calculated in the following manner:
(a) Determine the assessed value tax rate that applied for the school year immediately preceding the school year in which the reorganization took effect.
(b) Multiply that assessed value tax rate by the state equalization rate applicable to the portion for the school year immediately preceding the school year in which the reorganization took effect. The result is the base full value tax rate of the portion.
(c) Determine the assessed value tax rate that would have applied in the portion but for the provisions of this section.
(d) Multiply that assessed value tax rate by the state equalization rate that would have applied for the current school year but for the provisions of this section. The result is the target full value tax rate for the portion.
(e) Determine the difference between the target full value tax rate and the base full value tax rate for the portion.
(f) Divide the difference so determined by the total number of years in the phase-in period applicable to the school district.
(g) Multiply the quotient so determined by the number of years from the beginning of the phase-in period up to and including the year for which the tax rate is being determined.
(h) Add the product so determined to the base full value tax rate.
(i) Divide the sum so determined by the applicable equalization rate. The quotient is the assessed value tax rate for the portion for the current school year. Provided, that if the sum of the real property tax levies in all of the portions in the school district, using the assessed value tax rates computed pursuant to this subdivision, would yield a real property tax levy that is above or below the total real property
S. 3720--A 3 A. 5513--A
tax levy specified in the school district budget for the current school year, the assessed value tax rates shall all be decreased or increased proportionately so as to yield the specified real property tax levy amount.
4. As used herein the term "portion" means that part of an assessing unit located within a school district.
§ 2. This act shall take effect immediately.
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 school district reorganizations and real property tax rates
Purpose
To increase from 10 to 20 years the phase-in period in which the boards of education or trustees of school districts participating in a proposed reorganization may opt to have the tax impact of such reorganization calculated.
Summary of provisions
Section 1. Amends section 3613 of the education law as added by section 6 of part A Chapter 56 of the Laws of 2014 relating to school district reorganizations and real property tax rate.
Section 2. Sets forth the effective date.
Justification
Consolidations and mergers are economically beneficial for school districts and by extension the taxpayers. As such, provisions were included in the enacted 2014-15 State Budget that added a new section 3613 to the education law relating to school district reorganizations and real property tax rates. Pursuant to these provisions, merging or reorganizing school districts may opt to freeze the tax rates for the first year at existing levels and any changes in subsequent years are phased in gradually, for a full period of up to ten years.
In some cases, however, the 10-year glide path is too short to avoid an immediate tax increase. A longer term of up to 20 years is necessary to provide more time to mitigate tax differentials to lessen or reduce the immediate tax impact. A 20-year glide path option will make the prospect of voting for a school district merger or reorganization more attractive to taxpayers. In the spirit of cost savings and efficiency, this bill would make it easier for more school districts to combine and generate savings which in the long-term will be passed down to the taxpayers.
Legislative history
2017-18 S.3531/A.3027
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately.
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