In May, the annual New York State Property Tax Report Cards for School Districts were released by the Department of Education. The report cards include estimates of fiscal reserves that each school district expects to have available by June 30th, the close of the current 2024/25 school year. New York State Property Tax Report Card : Educational Management : P-12 : NYSED
Among the 121 Long Island districts in Nassau and Suffolk counties that reported, cash reserves have climbed to almost $3.64 billion — up 12% from the prior 2023/24 year. Of the reserves, approximately $785 million are “unrestricted” surpluses above the state’s legal limit for reserves and accumulated by 19 Long Island districts, the same as last year. These “rainy day funds” may be spent at the district’s discretion. Notable school districts include Brentwood’s year-end surplus of $137.7 million, or 22.8% of its budget. Island Park’s reported balance is nearly $5.3 million, or 11.9% of its budget. Sewanhaka is $16.4 million, or 6.4%; and Uniondale is $16.9 million, or 6.3%. 19 Long Island school districts again beyond legal limit for cash reserves, state records show – Newsday
As a general rule, state law bars school districts from withholding unrestricted funds beyond an amount equivalent to 4% of the school district’s annual operating budget. Specifically, under NYS Real Property Tax Law Section 1318(1), if at the end of a school year a district retains in excess of 4% of its current school year budget, the excess amount must be used to reduce the upcoming school year’s tax levy. However, there is no penalty for a school that does not comply with the Section 1318(1) mandate.
A school district can apply the excess taxpayer funds to the tax levy for the next school year, reducing the current tax burden for residents using the additional revenue accumulated from the preceding academic year. These “carryover” funds are also subject to the annual calculation of the maximum amount by which the school tax levy may increase for the upcoming year under Education Law Section 2023-a(3). Commonly known as the “Tax Levy Cap” limiting annual increases of school tax levies to no more than 2% or the rate of inflation by on the CPI (whichever is less). However, application of carryover funds has the effect of lowering a school district’s allowable tax levy increase for a school under the Tax Cap calculation – and there is no penalty for a school that does not properly apply excess reserves.
Meanwhile, last month a majority of Long Island school budgets for the 2025/26 year won voter approval and even with school district spending proposals totaling a combined $16.36 billion, up 3.68% from the prior year – driving property taxes across the Nassau-Suffolk region to nearly $10 billion, a 2.3% increase year over year. Additionally, Long Island School districts will receive more than $270 million in additional state aid for the 2025/26 academic year, an increase of 5.4% from the prior year, for a total of $5.3 billion in aid.
More on Long Island school budgets here: Results show majority of Long Island school budgets approved – Newsday
More on State Aid to Schools here: School aid for Long Island: See how much your district is to receive in 2025-26 – Newsday
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