What's happening
This bill allows certain school districts, except those in cities over 125,000 people, to deduct state aid for debt service when calculating their bonded debt limits.
Why it matters
Eases borrowing restrictions for most school districts. By allowing districts outside the largest cities to deduct state aid for debt service when calculating their bonding limits, the bill could make it easier for these districts to fund capital projects like new schools or renovations.
Potential for improved school infrastructure. This change may lead to more school districts undertaking necessary building or improvement projects, as their legal debt ceilings would effectively be higher.
Excludes largest urban districts. By excluding cities with populations over 125,000, the bill maintains stricter borrowing limits for large urban school systems, potentially creating different financial landscapes for urban versus suburban/rural districts.
Could impact local tax rates and state budgets. Increased borrowing capacity might lead to higher local spending, which could affect local tax rates and/or increase reliance on future state aid for debt repayment.
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Who cares
School districts in cities with 125,000 or fewer residents
The bill would include them in the definition of school districts eligible to deduct state debt-service apportionments when calculating bonded indebtedness limits.
School boards and district finance officials in those cities
The change would affect how they calculate borrowing capacity for school district debt.
School districts in cities with more than 125,000 residents
They would remain excluded from the definition under this provision.
Headline styles
Update School Debt Rules
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Vetoed memo.182
- Delivered to governor
- Returned to senate
- Passed assembly
- Ordered to third reading rules cal.689
- Substituted for A7062
- Referred to local governments
- Delivered to assembly
- Passed senateVote 59–3
- Advanced to third reading
- 2nd report cal.
- 1st report cal.941
Show 1 earlier action
- 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.
Redefine Eligible School Districts
Assembly Floor Calendar · Sponsor John T. McDonald III
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5425
2019-2020 Regular Sessions
IN SENATE
April 30, 2019
Introduced by Sens. MAYER, BRESLIN -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government
AN ACT to amend the local finance law, in relation to allowing certain school districts to deduct state apportionments for debt service in the calculation of limits for bonded indebtedness
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subparagraph 2 of paragraph a of section 121.20 of the local finance law, as amended by chapter 506 of the laws of 1964, is amended to read as follows:
2. The term "school district" shall mean a school district other than a school district in a city with a population exceeding one hundred twenty-five thousand inhabitants.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10806-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the local finance law, in relation to allowing certain school districts to deduct state apportionments for debt service in the calculation of limits for bonded indebtedness
Purpose of the bill
This bill amends local finance law section 121.20 to allow small city districts to factor anticipated building aid into their debt limit calculations, as is done for non-city districts.
Summary of specific provisions
Amends subparagraph 2 of paragraph a of section 121.20 of the local finance law to include language defining a school district as a district other than in a school district in a city with a population exceeding one hundred and twenty-five thousand inhabitants.
Justification
The state provides Building Aid to school districts based on their local fiscal capacity with the purpose of ensuring all districts are able to maintain their physical infrastructure, creating a safe environment conducive to student learning. However, constitutional and legal barri- ers related to debt limits and public votes make it more difficult for small city school districts to take full advantage of this aid and main- tain their school infrastructure properly.
Small city school districts encounter different rules than other school districts when calculating their debt limits, which impacts their abili- ty to borrow or, bond for capital projects like renovations or new construction. A combination of constitutional and statutory policies results in a median small city school district debt limit of $18,736 per pupil, while the median non-city school district debt limit is $159,036 per pupil.
In order to exceed these low debt limits, small city school districts need to obtain voter approval with a super majority (60 percent), as well as approval of the Commissioner of Education and State Comptroller. Small city school business officials report that these requirements make it harder to do capital projects and place them at a disadvantage compared to neighboring school districts.
The greatest factor explaining this disparity in debt limits is that non-city school districts are allowed to reduce the overall cost of the project by the amount of state building aid they receive for the project, thereby reducing the amount that is borrowed or bonded. In contrastò, small city school districts' borrowing limit is based on the total cost of the project without deductions for the state aid they receive.
To level the playing field, this bill provides that small city school districts are treated the same as other districts and have their borrow- ing limit based on capital project costs minus state aid. This proposed change to Local Finance Law would provide equity in treating deductions for state apportionments for debt service in the same manner for small city school districts and other independent, non-city school districts.
Prior legislative history
New Bill
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.