NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1771A
SPONSOR: McDonald (MS) TITLE OF BILL:
CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY proposing an amendment
to section 4 of article 8 of the constitution, in relation to limita-
tions on local indebtedness
PURPOSE:
To remove the constitutional debt limitation currently imposed upon
small city school districts.
SUMMARY OF PROVISIONS:
Section 1 of this proposed constitutional amendment removes the current
five percent (of average full valuation of taxable real property) debt
limit imposed upon school districts wholly or partly located in cities
with less than 125,000 inhabitants (i.e., small city school districts).
This proposal also clarifies language that small city debt limits shall
exclude debt incurred for education purposes.
Section 2 provides language ensuring the normal process for approval of
a constitutional amendment is followed.
JUSTIFICATION:
Small city school districts are currently held to a debt limitation of
five percent of the average full valuation of taxable property for
borrowing for school capital projects. Small city school districts are
the only.independent districts with a five percent limitation on debt
issuance. All other independent school districts are statutorily permit-
ted to borrow up to 10 percent of their property valuations. In 1985, a
constitutional provision removing a real property tax limitation on
small city school districts was approved by the voters in the November
.election. The debt limitation on small city school districts included
in section 4 of article 8 of the New York State Constitution is the only
constitutional provision remaining which treats small city school
districts differently from other like school districts across the State.
The subject of debt limitation, originally imposed as the result of a
1951 constitutional amendment, was intended to give small city school
districts (then subject to constitutional real property tax limits)
control over and responsibility for their fiscal affairs. Today, howev-
er, with the real property tax limits no longer in place, and with the
urgent need to improve old and outdated school facilities in small city
school districts, it is time to advance a constitutional amendment to
align debt capacity among all independent districts. By increasing debt
capacity, small city school districts will be able to advance capital
projects that are more comprehensive and address greater infrastructure
needs sooner. In doing so, more students will benefit from updated
learning environments and residents will benefit from less costly
projects that result from prolonged deferred maintenance. Voters in
small city school districts would continue to have the authority to
approve borrowing for capital projects under this measure.
PRIOR LEGISLATIVE HISTORY:
2022: A9988/S8803 (Passed both houses)
FISCAL IMPLICATIONS:
None for the State.
LOCAL FISCAL IMPLICATIONS:
Upon voter approval of this amendment, small city school district
indebtedness could increase the current debt limits with approval by
local voters.
EFFECTIVE DATE:
This amendment would not take effect until approved by the voters in a
general election following approval by two consecutively elected State
legislatures.
