tax-cap-150x150-3928769New York’s 2 percent local property tax levy cap has passed another important legal test, prevailing in the state’s mid-level appeals court over a constitutional challenge from the state’s largest teachers’ union.

With just one of its five panel members partially dissenting, the state Appellate Division in Albany yesterday upheld an October 2014 ruling by Supreme Court Justice Patrick J. McGrath—which, as noted here at the time, was “a resounding win for Governor Andrew Cuomo and for property owners across New York.”

Writing for the appellate court, Justice Eugene P. Devine concluded that “no fundamental rights are implicated by” the property tax cap or the subsequent state law creating a temporary state income tax credit that reimbursed property tax hikes only for residents of districts staying within the cap.

NYSUT had claimed the cap violated the state constitutional provision requiring the state to maintain and support public schools, that the 60 percent supermajority provision for tax cap overrides diminished voting rights, and that the tax credit law (also known as the “freeze credit”) had deprived school children of equal protection under the law.

Like McGrath, the appellate justices rejected all of those claims—although one appellate panel member, Justice Michael C. Lynch, said he thought the union’s constitutional claim was “a novel argument” backing up “viable claims.” But Lynch himself seems to have fundamentally misconstrued the tax cap law. From his partial dissent:

Under the challenged legislation, a school district may not adopt a budget above a statutory “cap” – generally the lesser of 2% or the rate of inflation – without the approval of a supermajority of 60% of the voters.

Wrong.  The law caps each district’s tax levy, not its budget, which can increase spending by more than 2 percent if funds are available to support it. And the state school aid spigot has been wide open over the past few years—including a whopping 6.5 percent, $1.5 billion hike in the latest state budget—further undermining NYSUT’s contention that the cap is depriving children of a sound-basic education.

The union reportedly is “very likely” to attempt an appeal to the state’s highest court, the Court of Appeals.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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