Submission Date
Question
In the Municipal Ballot Votes for Library Funding in New York State manual (the “414 Manual”), it states that a Chapter 414 referendum “is not a new tax,” asserting that the funds remain a municipal appropriation. However, Chapter 414 of the Laws of 1995 appears to authorize voters to determine “how much to tax themselves” for library services, and the municipality is then required to levy and collect that amount annually as a separate line item on the tax bill.
Given that the municipality becomes the taxing authority responsible for collecting and remitting these funds to the library, does a successful 414 vote legally create a new or distinct tax obligation (as opposed to a continuation or adjustment of an existing municipal appropriation)?
In other words, how should the resulting levy be properly characterized under New York Education Law and municipal finance law, as a continuation of an existing appropriation or as a new dedicated tax established by voter approval?
Answer
For the five people reading this who don’t work day-to-day on library budget matters but for some reason care about this question,[1] I will explain: a “414” is the nickname for when the voters of a village, town, city, or county approve a separate tax levy to support a public or association library (or libraries).
The “414” got its nickname for the reason set out in the question (“Chapter 414 of the laws of 1995”), but the tax is enabled through Education Law Section 259. It is called “414” to differentiate it from another fun nickname in library tax-land, the “259,” which is reserved for levies approved by school district voters.
“414” is actually a bad nickname,[2] because in the time since “Chapter 414 of the Laws of 1995” was passed, the part of the law governing “414 votes” has changed (in 1996, 1997, 2021, and (most recently) in 2023. I guess changing “414” to “587” (for “Chapter 587 of the laws of 2023”) is too cumbersome.
While I appreciate that nicknames are important, that isn’t the real reason I am reviewing this history. Rather, I am reviewing the history because it is relevant to the question: is a “414” a “new” tax?
The answer is: in 1995 (when the vote was only to “increase” the amount to appropriate), there may have been some grounds to say it was not a “new” tax. But since the 2007 change, the law has allowed for the tax to be not only “increased” but to be “established.”
So, since 2007, without a doubt, a 414 (or, more fittingly, a “184” for “Chapter 184 of the Laws of 2007”) can be a “new” (as in separate and never having happened before) tax.
While the phrase “new tax” might be a repugnant notion to some,[3] to call a tax proposed by the voters, endorsed by the library board, and separately enforced by the power of a tax levy and a lien on real property is… disingenuous, at best. In fact, it could be viewed as downright dishonest, by some.[4]
A tax such as a 184[5] is defined in New York’s Real Property Tax Law[6] as “a charge imposed upon real property by or on behalf of a county, city, town, village or school district for municipal or school district purposes…”[7]
The ability of any library (not just a library created by the taxing entity) to benefit from a 184 or a 259 is a vast power.[8] As a separate tax, it is also subject to the Real Property Tax Law’s provisions about refunds (meaning a library sometimes has to return part of it). As a tax, it can be enforced by the power of the state, and it provides an important source of independent, separate funding. For these reasons, its status as a new tax (when it is first adopted) should not be denied.
Libraries that want to point out that a new 414 to replace funding that from a municipality’s budget can stress that it’s not an additional charge (if the amount isn’t increasing).
A newly established 414 (or whatever you call it) is a new tax. An official source that glosses over these considerations may want to refine its guidance.
Thank you for a thoughtful question.
[1]^ Perhaps they are preparing for the bar exam or are exploring a PhD in library revenue streams.
[2]^ For an example of a “good” nickname for a law, see the “Freelance isn’t Free” revision to the General Business Law. Now that’s a nickname that gets the job done!
[3]^ My parents, for instance.
[4]^ Me, for instance.
[5]^ Let’s do this! Let’s give it the right nickname!
[6]^ A law that is more fun to read than the General Construction law, but less fun to read than the Real Property Actions and Proceedings Law.
[7]^ The definition goes on to say, “but does not include a special ad valorem levy or a special assessment.” That does not exempt the library tax from the definition of what a tax is.
[8]^ A 259 (school levy) actually has a better claim to being called a “414” than a 184, because it has largely been unchanged since being created in 1995, so... okay I am going to stop this now.