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Volume 3 - Opinions of Counsel SBEA No. 15

Opinions of Counsel index

State equalization rates (tax and debt limits);
Special equalization rates (tax and debt limits) - New York State Constitution, Art. VIII, § 4; Real Property Tax Law, § 1314:

In all localities, except New York City and Yonkers, the computation of tax and debt limits is based upon the applicable regular state equalization rate.

Our opinion has been requested as to which equalization rate is used in the computation of city school district debt limits.

Such debt limit is set forth in paragraph (h) of section 4 of Article VIII of the New York State Constitution. Specifically, this constitutional provision provides that:

§ 4. [Limitations on local indebtedness]

Except as otherwise provided in this constitution, no . . . school district described in this section shall be allowed to contract indebtedness for any purpose or in any manner which, including existing indebtedness, shall exceed an amount equal to the following percentages of the average full valuation of taxable real estate of such . . . school district:

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(h) any school district which is coterminous with, or partly within, or wholly within, a city having less than than one hundred twenty-five thousand inhabitants according to the latest federal census, for education purposes, five per centum, provided, however, that such limitation may be increased in relation to indebtedness for specified objects or purposes with (1) the approving vote of sixty per centum or more of the duly qualified voters of such school district voting on a proposition therefor submitted at a general or special election, (2) the consent of The Regents of the University of the State of New York and (3) the consent of the state comptroller. The legislature shall prescribe by law the qualifications for voting at any such election.

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The average full valuation of taxable real estate of any such county, city, town, village or school district shall be determined in the manner prescribed in section ten of this article.

The manner prescribed in section ten is as follows:

(f) . . . The average full valuation of taxable real estate of such county, city, village or school district shall be determined by taking the assessed valuations of taxable real estate on the last completed assessment rolls and the four preceding rolls of such county, city, village or school district, and applying thereto the ratio which such assessed valuation on each of such rolls bears to the full valuation, as determined by the state tax commission or by such other state officer or agency as the legislature shall by law direct. The legislature shall prescribe the manner by which such ratio shall be determined by the state tax commission or by such other state office or agency.

          The legislative direction for determining equalization rates is contained in the Real Property Tax Law, specifically paragraph (b) of subdivision 1 of section 202. The complete procedure is set forth in Article 12 of the Real Property Tax Law, with sections 1200 and 1202 containing the instruction for the general method for establishing the “state equalization rates”. The term of art used in the above cited section 202 and Article 12 is “state equalization rate”, and such term is defined in the Real Property Tax Law as follows:

§ 102. Definitions

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19. “State equalization rate” means the percentage of full value at which taxable real property in a county, city, town or village is assessed as determined by the state board.

This term, in our opinion, is certainly that which is referred to by section 10 of Article 8 of the Constitution (i.e., “the ratio which [the] assessed valuation . . . bears to the full valuation, as determined by the state tax commission or by such other state . . . agency as the legislature shall by law direct”).

In the absence of the circumstances to be discussed below, the state equalization rates for the last completed assessment roll and for the four preceding rolls for the municipalities involved would be applicable in the § 1314(1)).

However, in several instances we have also established a “special equalization rate” for one or more of the municipalities in the school district in question. Such “special equalization rate” is established pursuant to subdivision 2 of section 1314, and the specific authorization contained therein is worthy of note:

2. If it is made to appear to the state board by a statement of the assessors of the city or town, subscribed and affirmed by them as true under the penalties of perjury, that there has been a material increase or decrease in the ratio which the assessed valuation of real property bears to the full valuation since the last state equalization rate for the city or town was established, or, if it is made to appear to the state board that the state equalization rate established by it for a city or town is inequitable as applied to real property within the school district in such city or town, it shall determine a special equalization rate for such city or town or for such real property, as the case may be, which shall be used for the sole purpose of equalization under this section. Such special equalization rate as finally determined shall be furnished by such board to the district superintendent of schools or the school authorities, as the case may be. (emphasis supplied)

The language of this subdivision and its location in the law (i.e., “§ 1314. Equalization in school districts located in more than one city or town”) clearly limits the application of the special rate to school tax apportionment.

In addition, however, the State Legislature has consistently acted in accordance with the above discussed interpretation. Thus, in 1968, Chapter 1069 authorized the establishment of special equalization ratios for the City of New York. The new Article 12-A of the Real Property Tax Law created by said Chapter 1069 contains a section 1252 which specifically authorizes and directs that special rates established pursuant to this Article shall be used for the computation of the tax and debt limits in New York City.

And, finally, Article 12-A has been amended by Chapter 954 of the Laws of 1973 to make its provisions applicable to the City of Yonkers.

Accordingly, it is our opinion that the law clearly provides that in all localities, except New York City and Yonkers, the computation of tax and debt limits shall be based upon the applicable regular state equalization rates.

July 5, 1973

NOTE:  Construes law prior to L.1978, c.280.

Updated: