The high amount of approved budgets among New York school districts is a credit positive for the sector, said Moody’s Investors Service in a recent report.
On June 19, 22 out of 24 school districts had a successful revote to pass their fiscal 2013 budget, bringing the total percentage of approved budgets to 99.7%, Moody’s said.
According to data from the New York State Education Department and New York State School Boards Association, it’s the highest rate of approved budgets of the last 10 years.
“Though the new property tax cap has moderated the increase in property tax levies, the high amount of approved budgets is credit positive for the sector as districts with approved budgets are permitted to raise their property tax levy,” analyst Larry Bellinger wrote in a report.
He added that failure to pass a budget results in the adoption of a contingency budget which is prohibited from raising the property tax levy from prior year’s level.
Under the new property tax rules, school districts that pass their budget can increase their property tax levy in excess of the cap with a 60% majority vote.
