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For most school boards, the “tax cap” found in Education Law section 2023-a casts a long shadow over school district budget deliberations. While it is often referred to as a “2 percent cap,” the law does not place a specific percentage limit on district spending, nor does it limit allowable percentage increases in property taxes on individual properties. Rather, it places a limit on the growth of the total tax levy that a school board can raise without first obtaining supermajority (60 percent) approval from the voters.

However, attorneys who represent large commercial or industrial property owners are adept at using an appeals process to obtain changes in assessments under the New York State Real Property Tax Law. In many jurisdictions, school districts receive notice of and actively participate in these proceedings for the purpose of protecting their tax base. When a property is subject to a PILOT, these proceedings can result in less revenue from PILOTs than expected. In the era of the tax cap, this circumstance effectively erodes a school district’s tax base and can sabotage its good-faith efforts to make calculations regarding allowable tax levies.


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