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Cost-of-Living Adjustment
The cost-of-living adjustment (COLA) for September 2011 through August 2012 benefit payments is 1.4%. As a result, an eligible retired member with an annual benefit of $18,000 or more received a maximum monthly increase of $21.

This latest COLA brings the cumulative maximum monthly increase since COLA legislation was enacted in 2001 to $231 (see chart below).

New York's permanent, automatic COLA is designed to help offset inflation's adverse effects on the fixed retirement benefits of the state's public retirees. By law, the COLA is calculated by taking 50% of the March-to-March Consumer Price Index increase (rounded up to the next higher one-tenth of 1%) and multiplying it by the first $18,000 of the retirement benefit. (The CPI increase from March 2010 to March 2011 was 2.68%.) The annual increase is a minimum of 1% to a maximum of 3%.

To be eligible for a COLA, you must either be:

At least 62 and retired at least five years; or,
At least 55 and retired at least 10 years; or,
A retiree receiving a NYSTRS disability benefit for at least five years (regardless of age); or,
A surviving spouse of an eligible retiree receiving a lifetime benefit. (By law, the spouse receives an increase equal to one-half the COLA the retiree would have received.)
Retirees who become eligible for the COLA after September will receive their adjustment when first eligible.

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A Message from Comptroller Thomas P. DiNapoli

In July 2000, the Retirement System was at the forefront of a successful effort to enact a law providing an annual cost-of-living adjustment (COLA) for retirees.

A COLA payment is a change, based on the cost-of-living index, that permanently increases your retirement benefit. It is designed to address inflation as it occurs. Once you become eligible and receive your first COLA payment, subsequent COLA adjustments will continue automatically each September.

We hope this brochure makes COLA easier for you to understand. If you have any questions, please feel free to contact our Call Center.

Sincerely, Thomas P. DiNapoliState Comptroller

What is COLA?

COLA stands for cost-of-living adjustment. A COLA payment is an adjustment, based on the cost-of-living index, that will permanently increase the retirement benefit you receive from the New York State and Local Retirement System. Once you become eligible and the payments begin, they will continue automatically each September.

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How is COLA calculated?

COLA payments are based on the rate of inflation and the consumer price index published by the U.S. Bureau of Labor Statistics. The law requires that COLA payments be calculated based on 50 percent of the annual rate of inflation, measured at the end of the fiscal year (on March 31st). In addition, the COLA cannot be less than 1 percent or greater than 3 percent of your pension.

Another provision of the law requires that the COLA be calculated based on the first $18,000 of your annual Single Life Allowance amount, even if you have selected a different option.

For example, assume the inflation rate from March 2003 to March 2004 was 1.6 percent. Fifty percent of this would be 0.8 percent. However, the law states that COLA payments must be a minimum of 1 percent. Therefore, the COLA payment in this example would be 1 percent. So, if your pension is $12,000 a year, it would increase by $120 a year. If your pension is $25,000, it would increase by $180, representing 1 percent of the first $18,000 of your Single Life Allowance.

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Why is the Single Life Allowance payment option used?

As you may recall, when you retired, you were given various options for how your retirement benefit could be paid to you. All of the options provide you with a monthly benefit for life, but the Single Life Allowance option provides the highest pension. However, under Single Life, no payments are made to beneficiaries after you die. In exchange for providing for your beneficiaries upon your death, all of the other options reduce your benefit.

Therefore, calculating your COLA as if you had chosen the Single Life Allowance guarantees you the highest amount possible, since this option offers the highest benefit. If your retirement benefit is less than $18,000 annually under the Single Life Allowance, the calculation is based on that amount.

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ALBANY -- Advocates of a property tax cap bill passed by lawmakers Friday see it as a major step to reverse the economic slide of upstate and as a way to keep countless New Yorkers in their homes.

The bill passed after strong support from Gov. Andrew Cuomo almost five years after the idea of a tax cap first emerged, and following dueling multimillion-dollar campaigns.

"Enactment of this bill into law will be a victory for homeowners," said Senate Republican Majority Leader Dean Skelos, whose chamber passed the measure shortly before the Assembly.

The bill limits to 2 percent or the rate of inflation, whichever is less, the amount by which a government entity can increase its annual tax levy, although there are several exceptions.

Cuomo and supporters said the cap will force towns, counties, cities and school districts to live within their means rather than steadily pulling more money from the pockets of homeowners.

Detractors said it could force layoffs of municipal workers and school teachers and warned taxpayers may receive fewer public services.

Passage of the cap also represents a significant power shift in state politics.

The cap had been fiercely opposed by New York State United Teachers, the state's major teachers' union, as well as other members of the state's vast education lobby and many municipal groups.

"Education is going to be dumbed-down," said Democratic Senator Suzi Oppenheimer of Westchester, one of the more outspoken opponents, who nonetheless voted yes.

But critics of the mechanism were unable to withstand Cuomo's push, which gained potency in a poor economy and the state's unfortunate reputation as the nation's property tax capital.

The cap signals that "New York is open and ready for business," said Democratic Sen. David Carlucci of Rockland County.

"New York state is suddenly looking like the nation's best hope for rational policy and action," added Kathryn Wylde, president and CEO of the Partnership for New York City, a pro-business civic group.

Along with the cap, lawmakers passed an extension of rent regulations that keep in place limits affecting up to 2.5 million apartment dwellers largely in New York City.

There are about 2.95 million housing units in the state. Those units should fall under the cap.

The two measures were combined into one bill, colloquially called "The Big Ugly."

While both measures relate to housing costs, linking them into one bill was ultimately an act of political necessity.

The Democratic-dominated Assembly is controlled by New York City lawmakers who care deeply about rent regulation but not property taxes since levies are relatively low in the city and so many constituents are tenants.

For them to pass a cap, they needed an extension of rent regulations.

In the Senate, narrowly controlled by Republicans who are mostly from the suburbs and upstate, the tax cap has long been sought by voters. The GOP, philosophically against rent regulations, ultimately concluded they would have to extend decades-old rent regulations in order to get a cap.

"I strongly oppose rent control -- but I want a tax cap," said GOP Assemblyman Michael Fitzpatrick.

The cap does come with potentially significant exemptions.

Court judgments, growth in a town or school district, and employee pension costs can allow taxes to go beyond the 2 percent limit.

Also in the cap are mandate relief measures designed to help localities lower their cost of operations by easing the various state rules that they must work under. Senate Republican Majority Leader Dean Skelos said the relief efforts could amount to $127 million in savings.

The relief measures included allowing government entities to "piggyback" or join forces to bid on goods and services in order to get a better price. And school districts could share superintendents.

In addition to the cap and rent law, legislators on Friday approved a long-debated tuition hike for the SUNY system that will boost the cost to students $300 annually for the next five years. Tuition is now just below $5,000.

While it passed in the Assembly, a bill creating a statewide health exchange was not addressed in the Senate.

The exchange, a component of President Barack Obama's health care overhaul, would create a system for individuals and small businesses to get health insurance. Senate staffers said they may return to tackle the exchange issue later in the summer during a brief "cleanup" session.

Even with the unfinished tasks, the Senate worked with astonishing speed Friday night, especially considering that majority Republicans spent so much time this week locked in their conference room debating the fate of the same sex marriage bill. Senators dispatched the other issues in short order, adhering to a two-minute limit on comments and avoiding lengthy debate on the measures.


Read more: http://www.timesunion.com/loca.....24.php#ixzz1cBNOfoLQ

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The New York State Senate today passed historic property tax relief legislation that enacts a cap on the growth of local property taxes.

The bill (S.5856), sponsored by Senate Majority Leader Dean G. Skelos, will cap school and local government taxes to less than two percent or the Consumer Price Index (CPI), whichever is lower. Mandate relief is also included, with $127 million in savings to local governments, in addition to the creation of a Mandate Relief Council to identify and repeal unsound, unduly burdensome laws and regulations.

“Getting a property tax cap in place is critically important for every family that struggles to pay their taxes and for every business that wonders if it can afford to stay in New York,” Senator Skelos said. “Enactment of this bill into law will be a victory for homeowners who want to put a stop to skyrocketing property taxes. Senate Republicans have been fighting for years to get a tax cap enacted into law and this year, working with the Governor, we were able to get it done.”

This tax levy cap would shift the focus from total spending to the actual property taxes levied to support school district and local government expenses. The bill includes the following provisions:



· This bill limits tax levy growth to the lesser of two percent or the annual increase in the CPI, other than the “Big 5” school districts of Buffalo, Rochester, Syracuse, Yonkers and New York City. Those are funded through city budgets.  

· The exceptions for a tax levy above two percent or CPI are funds needed to support voter-approved capital expenditures, pensions, torts over five percent of the prior year’s levy, and an override of the cap.

· This bill also allows the growth in the levy due to physical and quantitative change.

· A school district would be required to submit a tax levy proposition for approval by voters at the district's annual meeting on the 3rd Tuesday in May. If the proposed tax levy is within the district's tax levy limit, then a majority vote would be required for approval. If the proposed tax levy seeks to override the cap and exceeds the district's tax levy cap, the threshold required for approval would be 60 percent of the vote.

· A school district that does not levy an amount up to the cap in any one year would be allowed to carry over unused tax levy capacity into future years. However, this carryover levy capacity cannot be used to increase its tax levy by more than an additional 1.5 percent above the cap in any single year.

· In the event a district's actual tax levy exceeds its authorized levy due to clerical or technical errors, the erroneous excess levy must be placed in reserve to offset the levy for the next school year.


The bill also provides for the same cap to apply to taxes levied by municipal governments.  Local governments that do not levy an amount up to the cap in one year can rollover that amount up to 1.5 percent in the following year. Local boards can exceed the cap with a 60 percent vote of the governing body. Exceptions include the pension and tort judgments in excess of five percent from the prior year’s levy. When enacted, the law would take effect for the 2012-13 fiscal year.

In addition, the mandate relief component would provide real cost savings in the form of $127 million in savings to local budgets. This includes:

· $70 million for all local governments and school districts through piggy-backing and centralized contracts;
· $34.6 million in savings for school districts;
· $13 million for transportation/housing/contracting/procurement/administration for all localities;
· $7.9 million in social services savings for counties; and
· $1.5 million in criminal justice savings.



The establishes a Mandate Relief Council which will:

· Determine if a statute or regulation is unsound, unduly burdensome, or costly;
· Establish procedures for repealing unfunded mandates in both statute and regulation;
· Provide a mechanism for direct appeals from the State Administrative Procedures Act petition;
· Require the state Comptroller to issue a detailed report on the cost and effect of unfunded mandates;
· Require that all bills that require a local government or a school or special district to take any action contain a fiscal note; and
· Be comprised of 11 members nominated by the Governor and Legislature: two nominations for each of the legislative leaders, and seven nominations for the Governor, including the Secretary to the Governor (who would serve as chair), the Governor’s Counsel, Secretary of State, Director of the Division of Budget, and three additional members from the Governor’s executive chamber staff.

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Capping the Growth of Property Taxes

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On June 3, based on the recommendations of the Commission on Property Tax Relief, Governor David A. Paterson introduced legislation to cap the growth of school property taxes. This publication provides information on the Governor’s proposal, as well as general information on caps and other forms of property tax relief. For more information, please visit the website of the Commission: http://www.cptr.state.ny.us

Questions & Answers

Is a cap on school property tax growth necessary?

New York State has the highest local taxes in the United States – 79% above the national average. Property taxes are rising at more than twice the rate of inflation and salary growth. When property tax rates are calculated as a percentage of home value, nine of the top ten counties with the highest rates in the country are in New York State. In addition, Nassau, Westchester and Rockland Counties are in the nation’s top ten in terms of household taxes.

Outside of New York City, 62% of property taxes are school property taxes. (The remaining 38% is divided among counties, cities, towns and special districts.) Despite record increases in State Aid for Education and funding for the School Tax Relief (STAR) Program, school property taxes continue to rise beyond what many property owners can afford.

Over time, a cap on the growth of property taxes will make New York a better place to live, work, raise a family and run a business.

How would the property tax cap work?

Governor Paterson’s proposal would limit the increase in school tax levies (the total amount of taxes to be collected by a school district) to the lesser of 4% or 120% of the Consumer Price Index (CPI) each year. In other words, if the total amount of taxes collected by a school district last year was $1 million, the levy this year could not exceed $1,040,000.

What is the Consumer Price Index?

The Consumer Price Index (CPI) is a measure of inflation published by the US Bureau of Labor Statistics. In years where inflation is greater than 3.33%, the 4% cap would become effective. Otherwise the cap would be the CPI multiplied by 120%

Are there other factors that would affect the amount of the cap?

The construction of new homes and businesses, and major additions and renovations of existing buildings expand a school district’s tax base without affecting other existing taxpayers. This new growth would be added to the levy cap each year.

In addition, major capital items, such as school construction, would continue to be authorized separately by public vote, and would not be included within the levy cap. If approved by voters, such exceptions would last until payment for the capital item is completed.

Would residents of the school district still have a school budget vote each year?

Under the Governor’s proposal, residents would continue to vote each year, but would vote on the increase in the tax levy rather than the budget.

What if voters wanted to increase the tax more than the cap allows or felt the cap was too high?

Each year, school district residents would be able to “override” or “underride” the cap. If voters wanted to limit levy growth by less than the statewide cap in a given year, they could place such an “underride” measure on the ballot.

If a local school board chooses to put a levy on the ballot that exceeded the capped amount, it would be up to voters to accept or reject the levy “override.” The vote required to override the levy cap would be contingent on the growth of State Aid for Education for the district. If state aid growth for such a district was at least 5 percent for that year, the vote needed to override the levy cap would be 60 percent. If the growth of state aid was less than 5 percent, a 55 percent vote would be needed to override the levy cap.

Why is it important that the cap be enacted before the other recommendations of the Commission?

In its Preliminary Report, the Commission on Property Tax Relief recommended creation of a “STAR Circuit Breaker” to target individual tax relief and made several recommendations to reduce the local cost of providing a quality education. However, the property tax cap is prioritized first as the Commission’s principal recommendation.

As property taxes continue to increase at unsustainable rates, the first step is to “stop the bleeding” by slowing the growth.

Programs which provide relief to individual taxpayers, such as STAR or a circuit breaker, relieve the symptoms of the problem while the tax cap addresses the problem itself. Without a property tax levy cap, these programs may also have the unintended consequence of encouraging spending, similar to what occurred when STAR was first introduced. Enacting the property tax cap first will also spur mandate reform, promote efficiencies and will be the “blunt instrument” needed to force some tough, necessary choices.

What is a circuit breaker and who would benefit?

A circuit breaker shuts off (or reduces) property taxes that exceed a certain percentage of a particular taxpayer’s income. A circuit breaker introduces an “ability to pay” criterion that the property tax lacks. Circuit breakers identify the individual taxpayers for whom property taxes are most burdensome and reduce their tax to a manageable level.

A circuit breaker would only benefit certain homeowners, whereas the cap would slow the growth of property taxes for all New Yorkers. Many middle class taxpayers would not benefit from a circuit breaker, nor would any businesses.

New York has 4 million property taxpayers outside of New York City. Depending on how the circuit breaker was structured, it may only benefit one quarter of those taxpayers, whereas the cap would benefit all of them.

How much would taxpayers save if the cap was enacted?

Average school taxes for homeowners in New York State range from $500 in Lewis County to $7,000 in Westchester County.

If a cap on school property taxes is in place, the amount of savings will vary from one school district to another. Several factors will influence the amount of savings, primarily, the amount of taxes being collected in a given school district and the amount the tax levy would have increased had the cap not been in place. Those who live in areas with high school taxes that are increasing well beyond the rate of inflation would see the greatest savings.

Had the cap been enacted five years ago, it is estimated that some taxpayers would have seen as much as 16% savings last year and the average savings statewide would have been 12%. In school districts where taxes are the highest, typical homeowners could have saved $1,000 or more last year, and as much as $4,000 over the five years.

Would the cap hurt schools?

The Governor’s proposal sets the cap each year at a level that allows for reasonable growth of school ex-penses and that is adjusted for economic conditions and growth of the tax base. At no time would district voters be precluded from increasing school taxes beyond the capped amount.

Do other states have property tax caps?

According to the National Tax Journal, which surveyed the continental 48 states in 2006, 43 states have some form of limitation on real property taxes. The Governor’s proposed cap is modeled most closely after Massachusetts’ Proposition 2½. Since the enactment of Proposition 2½, Massachusetts dropped from 3rd nationally in 1977 to 33rd in 2005 on the measure of state and local tax burden. Massachusetts has a “foundation budget” formula similar to the one adopted in New York in 2007 to assure adequate funding for education. Comparative pupil performance data demonstrate that the combination of Proposition 2½ and the foundation budget formula has not negatively affected student per-formance. On standard tests, Massachusetts ranks highest among all states.