My story with help from Martha Ellen, Brian Kelly and Jaegun Lee.
Eight north country towns violated a limit on how much they can increase property taxes, highlighting the difficulties that New York governments will face with the new requirements.
“I really don’t think anyone knows how to interpret this law,” said Hopkinton Clerk Vickie L. French. “By the time (Comptroller Thomas P. DiNapoli’s office) called, I just thought it was too late to do a revised budget.”
Because of a new 2011 state law, towns, villages, counties, cities and school boards — plus special districts, like those for water and sewer services — can’t raise their property tax levy by more than 2 percent.
But there are plenty of exemptions, like for pensions and for growth in the town, so the 2 percent increase isn’t as straightforward as it may seem. Local officials must complete a complicated formula that takes into account a number of variables before figuring out how much they can increase the levy, or the total amount to be raised by taxes.
Ms. French, Hopkinton’s budget officer, thought she was following the rules when she plugged in the levy amount into the state’s formula for calculating the tax cap, but learned by phone call from a state comptroller’s representative in mid-December she was supposed to use a different figure. The town went over the limit by $12,506.
“According to her, we’re not the only town who did it that way,” Ms. French said.
A town can surpass the 2 percent limit if they pass a local law authorizing it. But the towns didn’t do so, believing that they were under the limit.
In all, 43 municipalities, or 5 percent of all that reported, improperly exceeded the tax cap. Other towns in Northern New York that exceeded the property tax cap were:
■ Alexandria, by $22,392.
■ Pamelia, by $13,783.
■ Theresa, by $11,269.
■ Croghan, by $2,551.
■ Clifton, by $468.
■ Edwards, by $8,849
■ Parishville, by $8,058.
Mr. DiNapoli’s office, which administers the state’s tax cap, was able to catch errors in Edwards’s and Parishville’s calculations before tax bills went out, so the towns just lowered their tax rates. Residents there won’t pay any additional money.
In the other towns affected, the extra taxes collected from property owners will go into a special account that cannot be used until 2013. That money will then count toward the towns’ property tax levies that year.
Theresa Supervisor Clinton A. Coolidge said the Town Council was “bound and determined” to create a budget that was under the cap and did not want to pass a resolution allowing it to exceed it. The council believed it had done so until the comptroller’s office informed the town that a closer look at its budget figures revealed the cap was exceeded.
“It was an honest mistake and we corrected it,” he said. “It actually benefited taxpayers, because we were able to reduce the rate.”
He said the council was able to apply money left over last year from a state plowing agreement to bring the budget increase below the cap.
Alexandria town Supervisor Dale D. Hunneyman said the Town Council had decided not to override the tax cap at former Supervisor Martha M. Millett’s recommendations but later was hit with an unexpected workman’s compensation payment that bumped the tax levy increase over the 2 percent limit.
Mr. Hunneyman said the town is still trying to figure out how to resolve the issue.
“I’ve been in contact with the county on this and we’re going to try to get a hold of the state comptroller’s office,” Mr. Hunneyman said.
Pamelia Supervisor Lawrence C. Longway said he was shocked when he found out the town had exceeded its property tax limit. The town doesn’t even levy a property tax, he said. But when the roughly $23,000 that one of its new sewer districts raises in property taxes to fund the Route 3 sewer project was added to the mix, the town exceeded the cap.
“It blew my mind,” said Mr. Longway, who prides himself on fiscally conservative stewardship. “Last fall, there were different municipalities overriding that 2 percent tax cap. I could have done that. We had no town tax, so I just assumed we didn’t have any problem anyhow.”
The town has enough in reserves to make up for the gap, Mr. Longway said.
The town of Clifton went over by $468 but Supervisor Robert L. Snider said he is not going to worry about that amount on a budget that exceeds $1 million.
“It had something to do with retirement costs at Clifton-Fine Hospital that had to go through us,” he said. “I’m personally not going to get excited about $468.”
Clifton did not override the tax cap because it did not think it was close enough to bother.
“We didn’t purposefully go over it. We thought we were well under it,” Mr. Snider said. “We thought we were golden.”
Mr. DiNapoli said in a news release that his office will remain vigilant in correcting the tax accidents.
“Our review assisted local governments by providing insight into common issues and errors calculating the new tax cap, and I have directed my staff to develop additional training and expand our outreach to eliminate these errors,” he said in a news release.
The next task for Mr. DiNapoli’s office is to comb through school district budgets. Budgets that hike the levy more than 2 percent must be approved by at least 60 percent of the voters. School boards must forward their budget information to the state office by March 1.