N.Y. General Municipal Law Section 3-C
Limit upon real property tax levies by local governments


1.

Unless otherwise provided by law, the amount of real property taxes that may be levied by or on behalf of any local government, other than the city of New York and the counties contained therein, shall not exceed the tax levy limit established pursuant to this section.

2.

When used in this section:

(a)

“Allowable levy growth factor” shall be the lesser of:

(i)

one and two one-hundredths; or

(ii)

the sum of one plus the inflation factor; provided, however, that in no case shall the levy growth factor be less than one.

(b)

“Available carryover” means the amount by which the tax levy for the prior fiscal year was below the tax levy limit for such fiscal year, if any, but no more than an amount that equals one and one-half percent of the tax levy limit for such fiscal year.

(c)

“Coming fiscal year” means the fiscal year of the local government for which a tax levy limit shall be determined pursuant to this section.

(d)

“Inflation factor” means the quotient of:

(i)

the average of the national consumer price indexes determined by the United States department of labor for the twelve-month period ending six months prior to the start of the coming fiscal year minus the average of the national consumer price indexes determined by the United States department of labor for the twelve-month period ending six months prior to the start of the prior fiscal year, divided by:

(ii)

the average of the national consumer price indexes determined by the United States department of labor for the twelve-month period ending six months prior to the start of the prior fiscal year, with the result expressed as a decimal to four places.

(e)

“Local government” means a county, city, town, village, fire district, or special district including but not limited to a district created pursuant to article twelve or twelve-A, or governed by article thirteen of the town law, or created pursuant to article five-A, five-B or five-D of the county law, chapter five hundred sixteen of the laws of nineteen hundred twenty-eight, or chapter two hundred seventy-three of the laws of nineteen hundred thirty-nine, and shall include town improvements provided pursuant to articles three-A and twelve-C of the town law but shall not include the city of New York or the counties contained therein.

(f)

“Prior fiscal year” means the fiscal year of the local government immediately preceding the coming fiscal year.

(g)

“Tax levy limit” means the amount of taxes authorized to be levied by or on behalf of a local government pursuant to this section, provided, however, that the tax levy limit shall not include the following:

(i)

a tax levy necessary for expenditures resulting from court orders or judgments against the local government arising out of tort actions for any amount that exceeds five percent of the total tax levied in the prior fiscal year;

(ii)

in years in which the system average actuarial contribution rate of the New York state and local employees’ retirement system, as defined by paragraph ten of subdivision a of Retirement & Social Security Law § 19-A (Employer contributions for the two thousand ten - two thousand eleven fiscal year and subsequent fiscal years)section nineteen-a of the retirement and social security law, increases by more than two percentage points from the previous year, a tax levy necessary for expenditures for the coming fiscal year for local government employer contributions to the New York state and local employees’ retirement system caused by growth in the system average actuarial contribution rate minus two percentage points;

(iii)

in years in which the system average actuarial contribution rate of the New York state and local police and fire retirement system, as defined by paragraph eleven of subdivision a of Retirement & Social Security Law § 319-A (Employer contributions for the two thousand ten - two thousand eleven fiscal year and subsequent fiscal years)section three hundred nineteen-a of the retirement and social security law, increases by more than two percentage points from the previous year, a tax levy necessary for expenditures for the coming fiscal year for local government employer contributions to the New York state and local police and fire retirement system caused by growth in the system average actuarial contribution rate minus two percentage points;

(iv)

in years in which the normal contribution rate of the New York state teachers’ retirement system, as defined by paragraph a of subdivision two of Education Law § 517 (Annuity reserve fund)section five hundred seventeen of the education law, increases by more than two percentage points from the previous year, a tax levy necessary for expenditures for the coming fiscal year for local government employer contributions to the New York state teachers’ retirement system caused by growth in the normal contribution rate minus two percentage points.

(h)

“Tax” or “taxes” shall include (i) a charge imposed upon real property by or on behalf of a county, city, town, village or school district for municipal or school district purposes, and

(ii)

special ad valorem levies and special assessments as defined in subdivisions fourteen and fifteen of Real Property Tax Law § 102 (Definitions)section one hundred two of the real property tax law.

3.

(a) Subject to the provisions of subdivision five of this section, beginning with the fiscal year that begins in two thousand twelve, no local government shall adopt a budget that requires a tax levy that is greater than the tax levy limit for the coming fiscal year. Provided however the tax levy limit shall not prohibit a levy necessary to support the expenditures pursuant to subparagraphs (i) through (iv) of paragraph (g) of subdivision two of this section.

(b)

(i) The commissioner of taxation and finance shall calculate a quantity change factor for each local government for the coming fiscal year based upon the physical or quantity change, as defined by Real Property Tax Law § 1220 (Definitions)section twelve hundred twenty of the real property tax law, reported to the commissioner of taxation and finance by the assessor or assessors pursuant to Real Property Tax Law § 575 (Assessor’s annual reports)section five hundred seventy-five of the real property tax law. The quantity change factor shall show the percentage by which the full value of the taxable real property in the local government has changed due to physical or quantity change between the second final assessment roll or rolls preceding the final assessment roll or rolls upon which taxes are to be levied, and the final assessment roll or rolls immediately preceding the final assessment roll or rolls upon which taxes are to be levied. The commissioner of taxation and finance shall, as appropriate, promulgate rules and regulations regarding the calculation of the quantity change factor which may adjust the calculation based on the development on tax exempt land.

(ii)

After determining the quantity change factor for the local government, the commissioner of taxation and finance shall proceed as follows: (A) If the quantity change factor is negative, the commissioner of taxation and finance shall not determine a tax base growth factor for the local government. (B) If the quantity change factor is positive, the commissioner of taxation and finance shall determine a tax base growth factor for the local government which is equal to one plus the quantity change factor.

(iii)

The commissioner of taxation and finance shall notify the state comptroller and each local government of the applicable tax base growth factors, if any, as soon thereafter as such factors are determined.

(c)

Each local government shall calculate the tax levy limit applicable to the coming fiscal year which shall be determined as follows:

(i)

Ascertain the total amount of taxes levied for the prior fiscal year.

(ii)

Multiply the result by the tax base growth factor, calculated pursuant to paragraph (b) of this subdivision, if any.

(iii)

Add any payments in lieu of taxes that were receivable in the prior fiscal year.

(iv)

Subtract the tax levy necessary to support expenditures pursuant to subparagraph (i) of paragraph (g) of subdivision two of this section for the prior fiscal year, if any.

(v)

Multiply the result by the allowable levy growth factor.

(vi)

Subtract any payments in lieu of taxes receivable in the coming fiscal year.

(vii)

Add the available carryover, if any.

(d)

Whenever the responsibility and associated cost of a local government function is transferred to another local government, the state comptroller shall determine the costs and savings on the affected local governments attributable to such transfer for the first fiscal year following the transfer, and notify such local governments of such determination and that they shall adjust their tax levy limits accordingly.

4.

(a) When two or more local governments consolidate, the state comptroller shall determine the tax levy limit for the consolidated local government for the first fiscal year following the consolidation based on the respective tax levy limits of the component local governments that formed such consolidated local government from the last fiscal year prior to the consolidation.

(b)

When a local government dissolves, the state comptroller shall determine the tax levy limit for the local government that assumes the debts, liabilities, and obligations of such dissolved local government for the first fiscal year following the dissolution based on the respective tax levy limits of such dissolved local government and such local government that assumes the debts, liabilities, and obligations of such dissolved local government from the last fiscal year prior to the dissolution.

(c)

The tax levy limit established by this section shall not apply to the first fiscal year after a local government is newly established or constituted through a process other than consolidation or dissolution.

5.

A local government may adopt a budget that requires a tax levy that is greater than the tax levy limit for the coming fiscal year, not including any levy necessary to support the expenditures pursuant to subparagraphs (i) through (iv) of paragraph g of subdivision two of this section, only if the governing body of such local government first enacts, by a vote of sixty percent of the total voting power of such body, a local law to override such limit for such coming fiscal year only, or in the case of a district or fire district, a resolution, approved by a vote of sixty percent of the total voting power of such body, to override such limit for such coming fiscal year only.

6.

In the event a local government’s actual tax levy for a given fiscal year exceeds the tax levy limit as established pursuant to this section due to clerical or technical errors, the local government shall place the excess amount of the levy in reserve in accordance with such requirements as the state comptroller may prescribe, and shall use such funds and any interest earned thereon to offset the tax levy for the ensuing fiscal year. If, upon examination pursuant to sections thirty-three and thirty-four of this chapter, the state comptroller finds that a local government levied taxes in excess of the applicable tax levy limit, the local government, as soon as practicable, shall place an amount equal to the excess amount of the levy in such reserve in accordance with this subdivision.

7.

All local governments subject to the provisions of this section shall, prior to adopting a budget for the coming fiscal year, submit to the state comptroller, in a form and manner as he or she may prescribe, any information necessary for calculating the tax levy limit for the coming fiscal year.

Source: Section 3-C — Limit upon real property tax levies by local governments, https://www.­nysenate.­gov/legislation/laws/GMU/3-C (updated Apr. 19, 2019; accessed Jun. 15, 2024).

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Accessed:
Jun. 15, 2024

Last modified:
Apr. 19, 2019

§ 3-C’s source at nysenate​.gov

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