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Frequently Asked Questions

    Tax Cap FAQs

  • What is the property tax cap?

    The tax cap law establishes a limit on the annual growth of property taxes levied by local governments and school districts to two percent or the rate of inflation, whichever is less.

  • Does the 2 percent cap on property taxes apply to property tax rates or real property assessments?

    The cap is not directly applicable to property tax rates, or to the assessed value of real property.

  • Who is subject to the property tax cap?

    The cap applies to all independent school districts outside of the Big Five Cities (i.e. the dependent school districts of Syracuse, Rochester, Buffalo, Yonkers and New York City) and to all local governments including counties, cities, towns, villages and special districts (except those special districts noted below). The cap does not apply to New York City.

  • Are there exceptions to the tax cap?

    There are limited, narrow exclusions to the cap, including certain costs of significant judgments arising out of tort actions and unusually large year-to-year increases in pension contribution rates. A school district’s local capital expenditures are also from the cap.

  • Is there an override mechanism to the tax cap?

    The tax levy cannot exceed the cap unless 60 percent of voters (for school districts) or 60 percent of the total voting power of the governing body (for local governments) approve such increase.

  • When is the tax cap effective?

    The cap first applies to local fiscal years beginning in 2012. Local budgets that commenced in 2011 but conclude in 2012 are not affected.

  • What is the “New N.Y. Government Reorganization and Citizen Empowerment Act?”

    The Empowerment Act (General Municipal Law Article 17-A) establishes a uniform set of procedures for the consolidation or dissolution of local government.

  • Weren’t there always processes in State Law for the consolidation or dissolution of local government?

    Yes, but each process was different and governed by a separate statute. As Attorney General, Governor Cuomo worked to standardize the process and simplify the ability for citizens to take action.

  • Were the changes really needed?

    The delivery of services locally or on a regional basis is still very important to our state. However, the business of Local Government in New York State is very large and can be complex for citizens to understand. At last count there were 1612 general purpose local governments, each with a governing body and taxing authority and another 9,485 taxing entities, including school districts, fire districts, special improvement districts and authorities. In fact, it is not uncommon for a taxpayer of this state to live in 3 different general purpose local governments, each with the ability to provide many similar services, while also being served by a school district. The modifications to the re-organization process have given the citizens of this state the ability to re-examine how those services are provided and to consider the equity and efficiency of being served by multiple governments.

  • What are the potential benefits of local government re-organization?

    Like successful business leaders, local government officials must always seek to identify opportunities to lessen the impact that property taxes have on their citizens and work to increase the return on every investment of taxpayer dollars. The consolidation or dissolution of towns, villages, fire districts and other special districts has the potential to reduce costs and increase the efficiency of service delivery through economies of scale, better coordination, a more flexible workforce and/or the elimination of redundant services. Fewer decision-making bodies for businesses to navigate might also give a region a competitive advantage.

  • When did the law take effect?

    The law became effective on March 21, 2010.

  • What types of local governments are covered by this law?

    The new procedures apply to the consolidation and dissolution of towns, villages, fire districts, fire protection districts, fire alarm districts, special improvement districts or other improvement districts, library districts, and other districts created by law.

  • What levels of local government are exempt from the law?

    The law does not affect school districts, city districts or special purpose districts created by counties pursuant to county law.

  • What is the difference between consolidation and dissolution?

    A local government consolidation refers to either (a) the combination of two or more local government entities into a new entity that assumes jurisdiction over all of the terminated entities, or (b) the combination of two or more local government entities through absorption into one of the entities. Local Government dissolution is the termination of the existence of a local government entity.

  • Who can initiate the process to consider the consolidation or dissolution of a local government?

    The law permits the process to be initiated pursuant to a citizens’ petition or by an action of the local governing board.

  • How can a resident begin the petition process?

    Anyone who is registered to vote in one of the local government units to be consolidated or dissolved may sign a petition. That person is known as an “elector” of the local government. A list of electors can be obtained from the town or village clerk or the county board of elections.

  • How many electors need to sign a petition?

    A petition needs to be signed by at least ten percent of the number of electors or five thousand electors, whichever is less, in each town, village or special district to be consolidated or dissolved. However, if the town, village or special district has five hundred or fewer electors, the petition needs to be signed by at least twenty percent of the number of electors from that local government unit.

  • What happens when enough signatures are collected?

    A successful petition for consolidation or dissolution will lead to a referendum on whether or not to consolidate or dissolve. After the referendum vote is held, and the initiative passes in each involved local government unit, the governing body or bodies must develop a plan for consolidation or dissolution.

  • How does a local government initiate the process for reorganization?

    A local government does not need to be petitioned to begin to discuss reorganization or have the question put to the voters for a referendum. By resolution of the governing board(s), a local government(s) can initiate the process and agree to present a reorganization plan to the residents for their consideration.

  • When does a referendum on a local government reorganization occur?

    In two ways.
    1) If there is petition that has been circulated by the residents, it must be accepted by the municipal clerk as valid. If it is accepted, each governmental unit proposed to be consolidated or dissolved has thirty days to enact a resolution setting the date for a referendum on the proposed consolidation or dissolution. The referendum must be held between sixty and ninety days after the enactment of the resolution.
    2) In the case of a local government initiated process, the resolution adopting the reorganization plan would set the date for the referendum for each local government.

  • Does the referendum need to occur on the same day in each local government?

    No, but they cannot be more than 20 days apart.

  • Does there need to be a majority of the total votes cast or a majority in each of the local governments for passage of the referendum?

    A referendum will have passed if a majority of the votes cast are in favor of passage in each of the local government units that would be consolidated or dissolved.

  • What happens if the vote is in favor of reorganization?

    If the referendum occurred pursuant to a citizens’ petition then, within thirty days after the vote is certified, the governing body or bodies of the units to be consolidated or dissolved must meet to discuss a proposed consolidation or dissolution plan, and within 180 days of the meeting the governing bodies must approve a proposed plan. If the referendum occurred pursuant to an action initiated by the local governing board, then the effective date of the reorganization would be the date listed in the plan previously approved by the board(s).

  • Does the public have an opportunity to comment on the proposed reorganization plan?

    During the development of the reorganization plan, the governing boards must hold at least one public hearing.

  • What happens if the referendum fails?

    If the referendum fails, the consolidation or dissolution process may not be initiated for the same purpose until four years have passed from the date of the referendum.

  • In the case of an elector initiated process, the referendum comes before the final reorganization plan is approved by the governing bodies. Can the electors reconsider their initial vote on reorganization?

    Yes. Since the vote comes before the plan when using the petition process, and possibly before any study of the potential impacts of consolidation or dissolution, people who vote in favor of the change are trusting that their governing board will develop a sensible and suitable plan for dissolution or consolidation. However, sometimes the financial numbers don’t work out in the way that was expected, the proposed cuts in services would go beyond what was anticipated, or people simply change their minds. The law gives the electorate the opportunity, once the final plan is done, to reconsider their support for the consolidation or dissolution as expressed in the plan.

  • What should I look for in a reorganization plan?

    The plan to consolidate or dissolve local government entities must include the following:
    (a) the name of each involved local government entity to be consolidated;
    (b) the name of the reorganized consolidated local government entity;
    (c) the rights, duties and obligations of the reorganized local government entity;
    (d) the territorial boundaries of the reorganized local government entity;
    (e) the type and/or class of the reorganized local government entity;
    (f) the governmental organization as it concerns elected and appointed officials and public employees, along with a transitional plan and schedule for elections and appointments of officials;
    (g) a fiscal estimate of the cost of and savings which may be realized from reorganization;
    (h) each entity's assets, including, but not limited to, real and personal property;
    (i) each entity's liabilities and indebtedness, bonded and otherwise;
    (j) terms for the disposition of existing assets, liabilities and indebtedness of each local government entity;
    (k) terms for the common administration and uniform enforcement of local laws, ordinances, resolutions, and orders within the reorganized local government entity;
    (l) the effective date of the proposed reorganization; and
    (m) the time and place or places for the public hearing or hearings on such proposed reorganization agreement pursuant.

  • So what happens to my local government assets?

    All rights, privileges and franchises of each component local government entity and all assets, real and personal property, books, records, papers, seals and equipment, etc., will be deemed transferred to and vested in the reorganized local government entity without any further action.

  • Is there assistance for local governments who have been petitioned?

    Yes, the Department of State administers the Local Government Re-organization Program to provide both technical and financial assistance to local governments to manage the process and develop re-organization plans.