Gannett is reporting that Moody’s Investor Services says the property tax cap could “imperil” school districts and local governments. I can’t find a link to actual Moody’s report yet, but analyst Robert Weber says:
New York state’s recently approved property-tax cap is likely to put additional pressure on local government financial operations already strained by declining state aid, weakened tax revenue, high fixed expenditures and state-mandated services,” the six-page review found.
The issue? The tax cap approved last month did not include significant mandate relief. So lawmakers approved a pension-smoothing bill to give districts the possibility to manage their pension costs. Remember: for years districts paid little to nothing for pensions, but now they are facing huge costs. The proposal, approved by both the Assembly and the Senate, would have allowed districts to manage their pension costs.
Gov. Cuomo just vetoed the legislation.
NYSUT is extremely disappointed that school districts will NOT have the option of floating bonds in order to provide taxpayers with immediate relief from rising pension costs. Remember, local governments were granted that flexibility last year.
Dick Iannuzzi said, “The Legislature provided an opportunity to reduce costs to school districts and provide some stability in estimating future costs. In light of the devastating tax cap adopted last month, it would have been wiser to support the needs of school districts, not further restrict their options.”