NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7049
SPONSOR: McDonald TITLE OF BILL:
An act to amend the local finance law, in relation to the contracting of
indebtedness by city school districts
PURPOSE OR GENERAL IDEA OF BILL:
To conform the provisions of the Local Finance Law With Section 4 of
Article 8 of the State Constitution should Section 4 be amended to
remove the current limitations on indebtedness imposed upon small city
school districts.
SUMMARY OF PROVISIONS:
Section 1 of this bill amends paragraphs b, c, and d of section 104 of
the Local Finance Law to delete the current debt limitation on small
city school districts and thus conform with language contained in
companion legislation (S5025) proposing a constitutional amendment
removing such language from Section 4 of Article 8 of the State Consti-
tution.
Section 2 of this bill provides for the effective date.
JUSTIFICATION:
Small city school districts -- those in cities with less than 125,000
people -- are Subject to a constitutional debt limit of 5%. All other
school districts have a statutory limit of 10%. Following the removal of
constitutional real property tax limits on small city school districts
by the voters during the general election of 1985, the debt limitation
on small city school districts included in Section 4 of Article 8 of the
New York State Constitution and Section 104 of the Local Finance Law are
the only provisions remaining which treat small city school districts
differently from other school districts across the State.
The subject debt limitation, originally imposed as the result of a 1951
constitutional amendment, was intended to give small city school
districts (also 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, the urgent
need to improve school facilities leaves many small city school
districts pressing against this 5 percent debt limit. The 5% limit --
the lowest included in the Constitution or statute -- limits districts'
ability to control their fiscal affairs.
This bill will impose a 10% statutory debt limit on small city school
districts, in line with all others in the state, if the constitutional
amendment, S5025, receives majority support from voters.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately
