Low inflation is making New York’s property tax cap tighter.
The 2011 state law placed a 2 percent limit on how much a school district or municipality can raise its property taxes in any given year.
But the actual limit varies each year and is adjusted for new construction, pension costs and the actions in prior years.
The cap also can’t exceed the rate of inflation, and for the first time since it took effect, stagnant price growth means municipalities will face a cap of 1.96 percent — not 2 percent.
“The state’s slow economic recovery and the tax cap have changed the fiscal landscape of many local governments,” Comptroller Tom DiNapoli said in a statement. “The tax cap is not static and for communities already facing long-term problems, they could be forced to operate with even less financial flexibility than before.”
DiNapoli’s office calculates the new limit — known as the “allowable [tax] levy growth factor” — depending on when a municipality starts its fiscal year….
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