Wednesday, September 7, 2011

Two Percent Tax Cap Does Not Affect Fire Districts

A key part of Andrew Cuomo's successful campaign for Governor of New York was his five-point plan to build a “new NY”.  His second point — controlling government spending — included a local property tax cap. Cuomo signed into law a two percent cap on local property tax levy increases on June 30, 2011.  Since then, all local governments in New York, including fire districts, have been wringing their collective hands, trying to determine how the new law affects them.  I have just learned that as far as fire districts are concerned, it doesn't.

As always, the devil is in the details.  Here they are:  The property tax cap law states that the two percent limit on tax levy increases can be overridden by a vote of “sixty percent of the governing body” of the local government.  In the case of a fire district, the governing body is a board of up to five commissioners.  Sixty percent of that is three commissioners.  OK, so three commissioners are needed to override the tax cap.  But here's the thing:  Three commissioners are needed anyway to pass any budget, regardless of the budget's size.  So a board of fire commissioners needs no more support to exceed the two percent cap than to not exceed it.


To conform with the mechanics of the tax cap law, the board must take two votes instead of one:  The first to override the tax cap law (if needed), and the second to pass the budget.  But this technicality has no practical effect on what boards of fire commissioners can do.  As a political matter, however, boards may be reluctant to be seen as thwarting the intent of Cuomo's pledge to control government spending.  Or maybe not.

Says Who?

The fact that the two percent tax cap does not affect fire districts isn't just my opinion.  It is also the opinion of David B. Garwood, attorney with Scicchitano & Pinsky, PLLC, a law firm marketing itself as “an authority on fire protection and EMS law in New York State”.  Garwood stated his opinion to Fairview's board of fire commissioners at a public meeting last evening.

Fire District Spending Out of Control, or Dodging a Bullet?

So is the inefficacy of the two percent tax cap for fire districts bad news or good news?  It depends who you ask.  For many local property owners hoping for property tax relief, it's bad news.  For boards of fire commissioners, it's good news.  Most local government officials in New York State have fought bitterly against the passage of this law, warning of dire consequences if it is enacted.  Now it seems that fire districts are effectively free from any spending restrictions in the property tax cap law.

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