Before area taxpayers and their counterparts statewide get too excited over the looming lower property tax hike for next year, they need to be mindful of the other side of the coin.

It’s been disclosed that the local property tax cap would be less than 1 percent. Amidst that seemingly good news is the harsh warning to local governments from state Comptroller Thomas DiNapoli.

Under the formula, the tax cap allows the levies outside New York City to increase by a maximum of 2 percent or the inflation rate in the previous rate, which ever is lower. That same cap can be adjusted if reasonable arguments are raised for special situations.

Next year’s tax scale was set at the end of June for all municipalities — villages, towns, counties and cities — whose fiscal year traditionally begins on Jan. 1. In the first six-month span, the consumer price index inched up only to 0.73 percent. Records show that’s the lowest it’s been since the cap was initiated in 2011.

Although property owners might view the paltry tax hike as manna from the heavens, the comptroller definitely envisions it as problematic. DiNapoli cautions that municipalities will likely be compelled to function in different ways under the new limits bound to be imposed. The comptroller is correct when he predicts tougher budget options. Among them: reducing staffing levels, coping with cutbacks in the delivery of services and fund balances, and the always-costly result of deferring certain infrastructure projects.

It’s not beyond the realm of possibility that due to the upward trend in inflation rates, the school districts too will be adversely affected by the zero growth in the vital property tax revenues they depend on to exist. No doubt they will encounter budget problems because of the cost for such items as personnel, the related expense of health care and benefits for teachers and administration, and energy costs. Unfortunately, in the current environment, those latter costs for the schools tend to grow much faster than the overall household rate of inflation.

E.J. McMahon, president of the Albany-based Empire Center for Public Policy, takes note that DiNapoli’s concerns — outlined in a recent news release from the comptroller’s office — fails to cite the nagging state mandates that have been driving up local expenses, McMahon adds that the collective bargaining rules under the Taylor Law literally hamper most communities’ efforts to save money. And McMahon also points out that DiNapoli, considered a close ally of the public employee unions, has refrained from becoming directly involved with any mandate issues.

School officials must brace themselves for the task. As DiNapoli warns: More than 1,800 school districts will have roughly $88.3 million less in tax levy growth compared to what they had in 2015, when the factor was 1.56 percent and $135.1 million less than they would have had when the cap was 2 percent in 2012 and 2013.

This marks the fourth annual budget cycle under the property tax cap enacted in 2011. School districts have generated the largest share of New York state’s high local property taxes.

© 2015 Niagara Gazette