Some years ago, New York State adopted a tax cap for municipalities and school districts. It required that these institutions limit their tax levy increase to 2% or inflation, whichever is lower. In the case of municipalities, they can override the tax cap, but there are strict rules on how this is to be done. Saratoga Springs Commissioner Minita Sanghvi’s 2024 budget adopted by the Council, Sanghvi now admits, exceeded the state’s tax cap without adhering to state requirements.
On December 7, 2023, I published a post on the chaos of the proposed city 2024 budget. At the time, I wrote:
This budget, however, which raises taxes for the second year in a row, appears to have a tax levy that exceeds the New York State limit.
December 7, 2023 blog post
Finance Commissioner Minita Sanghvi has proudly announced on several occasions that she does not read this blog. It appears that in this case she might have benefited from doing so. It seems that she has just discovered at the last possible moment that, in fact, the city has exceeded the tax cap and did so without first passing a required local law that would allow for this.
Here is an excerpt from her resolution:
“WHEREAS, since then, it has come to the attention of the Department of Finance that the amount stated in the 2024 Adopted Budget as $17,640,999, which is listed as line # A012-41001 was based on erroneous calculations. Upon investigation, it was found that the calculations were caused entirely by human error. A
Resolution From Commissioner Sanghvi
summary of the erroneous calculation and the correct calculation are included with this resolution and made a
part hereof”
As Sanghvi routinely touts her transparency, it will be interesting to see if the public will learn exactly what the error was, who was responsible for it, and what actions will be taken to avoid such errors in the future.
Cap Guidelines from the New York State Department of Taxation and Finance and the New York State Department of State gives these directions:
“If the levy exceeds the tax levy limit due to technical or clerical errors, the excess amount shall be placed in reserve in accordance with Office of the State Comptroller requirements.”
For some reason Commissioner Sanghvi, having now admitted her budget exceeded the tax cap is now ignoring the state’s direction on what the next step needs to be.
Instead she has on her agenda a resolution that takes a convoluted path to amend the 2024 budget and amend the tax rate based on section 4.4.8 of the city charter.
My reading of the state requirements for overriding a tax cap lead me to believe that Sanghvi’s resolution fails to adhere to the state’s requirements. It is unclear if Sanghvi has communicated with the Comptroller’s office as to whether her resolution is acceptable.
As the current people on the Council routinely introduce new resolutions at the Council table, I am going to wait until the final version is adopted to comment further on whether they are handling the override properly.
