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NY tax cap base will be 1.56% next year

ALBANY — Property tax levy growth for local governments with fiscal years closing Dec. 31 will be capped at 1.56% for 2021, state Comptroller Thomas P. DiNapoli announced Tuesday.

This figure affects tax cap calculations for all counties, towns, fire districts, 44 cities and 11 villages, including Tupper Lake.

That doesn’t mean every county or town will have a tax levy cap of exactly 1.56%. Each local government’s specific circumstances are factored in — for instance, they can exclude unspent funds from the previous year, legal fees from lawsuits or costs for taking over another local government’s functions — which gives each its own tax cap percentage.

“The pandemic and the fiscal uncertainties municipalities are facing add to the challenge of adhering to the tax cap,” DiNapoli said in a press release. “At the same time the levy growth rate is dropping, both revenues and spending could deviate significantly from what was planned. Local governments must closely monitor their budgets to ensure they are balanced and that they have cash on hand.”

The tax cap, which first applied to local governments and school districts in 2012, limits annual tax levy increases to the lesser of the rate of inflation or 2%, with certain exceptions, including a provision that allows municipalities to override it.

The cap is one of many fiscal pressures facing local governments during the COVID-19 pandemic.

The 1.56% allowable levy growth factor for the 2021 fiscal year is the first time municipalities with a fiscal year ending on Dec. 31 had their levy growth capped at less than 2% in three years. Levy growth was capped at 2% for these municipalities due to inflation above 2% in recent years.

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