New York voters will decide debt limits for small city school districts in 2023

In New York, voters will decide on a constitutional amendment to remove the debt limit on small city school districts at the election on Nov. 7, 2023.

The New York Constitution places a debt limit on small city school districts, which are defined as districts located in cities with fewer than 125,000 inhabitants. The debt limit is equal to 5% of the average full valuation of taxable real property within the district’s jurisdiction. If the measure is approved by voters, it would amend Article VIII, Section 4 of the New York Constitution to remove the debt limit on small city school districts, as well as say that debt limits should not be applied to small cities that contract debt for educational purposes.

The amendment passed the New York State Senate on March 29, 2023, by 60-2, and was previously passed by the State Assembly on March 13 by 145-0. In New York, for a constitutional amendment to be referred to the ballot, it must pass each legislative chamber in two consecutive sessions. The amendment previously passed the Assembly and the Senate during the 2022 legislative session.

In New York, small city school districts are the only independent school districts with a debt limit of 5% of property valuations. Other independent school districts may contract debt of up to 10% of property valuations.

Debt limitations on school districts were established in 1951 when New York voters approved of a constitutional amendment that restricted the “powers of counties, cities, towns, villages and certain school districts to contract indebtedness and to impose taxes upon real estate.” In 1985, voters approved a measure to amend Article VII, Section 8 of the New York Constitution to remove the real property tax limitations on certain other school districts. 

The difference in property tax limitations between small city school districts and other school districts still exists in Article VIII, Section 4 of the New York Constitution. Approval of the amendment by voters would remove this debt limitation from small city school districts.

Currently, this constitutional amendment is the only measure on the ballot for New York voters in 2023. 

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