The following letter from the Education
Dept. Law Division is cited in several Comptroller’s
Opinions and serves as a basis for libraries receiving the full amount that had
been approved by school district voters regardless of shortfalls in tax
collections:
2.
Anticipation of Funds
“Where
a tax for library purposes is voted by a school district pursuant to Section ...[259] of the Education Law, there is no authority on the
part of the school district to prorate the amount of the library appropriation
any more than the amount voted for salaries of teachers or other operational
functions of the school would be prorated.
It is the duty of the school authorities to raise the money voted and if
the tax levy is not enough, then they are obligated to borrow whatever sum may
be necessary in order to produce the amount of the appropriation voted for the
library. ...A library board is not a
municipal corporation as defined in section 2 of the Local Finance Law. Only a corporation within the definition of a
municipality or school district as defined in said law,
may borrow on tax anticipation notes.
While it is true that the opinion in 50 State Department Reports 509
(the
Comptroller’s Opinion 92-28
|
This opinion
represents the views of the Office of the State Comptroller at the time it
was rendered. The opinion may no longer represent those views if, among other
things, there have been subsequent court cases or statutory amendments that
bear on the issues discussed in the opinion. |
BONDS AND NOTES -- Tax Anticipation Notes (payment of
proceeds to a public library); (payment of interest for notes issued for
library taxes)
LIBRARIES -- Finances (issuance and payment of proceeds of tax anticipation
notes); (payment of interest on tax anticipation notes) -- Investments
(interest earned on) -- Taxes (time for payment over by school district)
SCHOOL DISTRICTS -- Library Appropriation (disposition of interest on
investment of library fund); (time for payment over); (issuance of tax
anticipation notes for library taxes)
EDUCATION LAW, §259(1); LOCAL FINANCE
LAW, §24.00; REAL PROPERTY TAX LAW, §§1322, 1324: (1) Interest earned on the
investment of library fund moneys is credited to the library fund. (2) A school
district should pay over to the library fund or the library treasurer, as the
case may be, those taxes which are specifically earmarked for library purposes
as soon as practicable after their receipt. (3) If a school district has issued
tax anticipation notes in anticipation of taxes levied for library purposes,
the proceeds should be paid to the library fund or to the library treasurer, as
the case may be, as soon as practicable after receipt. (4) Interest on such tax
anticipation notes is a charge for which the school district, and not the
library, is liable. However, it is permissible for the library, in its
discretion, to reimburse the school district for interest costs with respect to
such notes. (5) If a school district chooses not to issue tax anticipation
notes but has other moneys available, it should pay a portion of these funds,
if not needed for school district purposes, to the library to assure the
library's ability to operate until tax revenues are received. 1962 Opns St Comp No. 62-978, unreported, is superseded to the
extent inconsistent.
You ask the following questions
concerning the relationship between a city school district and a city school
district public library in connection with moneys for the support of the library:
1. Is interest earned on the investment of library
fund moneys credited to the library fund?
2. Must the school district, immediately upon
receipt, place tax moneys collected for library purposes in a separate library
fund or, if the library board of trustees has demanded in writing payment of
taxes, pay the moneys to the library treasurer?
3. May the school district make a partial payment
if it has received an amount sufficient to pay the entire amount to the
library?
4. Is the school district required to advance
either general fund moneys or the proceeds of tax anticipation notes to the
library to provide operating revenues for that period of the library's fiscal
year prior to the collection of library taxes?
5. If tax anticipation notes are issued to fund
this period, when should the school district pay proceeds to the library?
6. If tax anticipation notes are issued by the
school district to fund this period, is the library required or authorized to
pay interest on these notes?
Education Law, §259 relates
to taxes voted for library purposes and provides in subdivision 1 thereof as
follows:
1. Taxes, in addition to those otherwise
authorized, may be voted for library purposes by any authority named in section
two hundred fifty-five of this chapter and shall, unless otherwise directed by
such vote, be considered as annual appropriations therefore
until changed by further vote and shall be levied and collected yearly, or as
directed, as are other general taxes. In the case of a school district the
appropriation for library purposes shall be submitted to the voters of the
district in a separate resolution and shall not be submitted as a part of the
appropriation of the necessary funds to meet the estimated expenditures of the
school district. All moneys received from taxes or other public sources for
library purposes shall be kept as a separate library fund by the treasurer of
the municipality or district making the appropriation and shall be expended
only under direction of the library trustees on properly authenticated
vouchers, except that money received from taxes and other public sources for
the support of a public library or a free association library or a cooperative
library system shall be paid over to the treasurer of such library or
cooperative library system upon the written demand of its trustees.
Thus, pursuant to section 259(1), taxes
voted for library purposes are considered to be an annual appropriation unless
and until changed by further vote and must be levied and collected in the same
manner as other general taxes. Further, all moneys received from taxes or other
public sources for library purposes must be kept in a separate library fund by
the municipality or school district treasurer or, upon written demand of the library
trustees, paid over to the treasurer of the library. Since the treasurer of the
sponsoring municipality or school district holds library fund money as
custodian for the library and invests the moneys, upon authority of the library
board, we have concluded that interest earned on such investment must be
credited to the library fund and not to the general fund of the sponsor (1986 Opns St Comp No. 86-54, p 86; see also Buffalo
Library v Erie County, 171 AD2d 369, 527 NYS2d 993.
Section 259(1) does not prescribe a
specific date on or before which library tax moneys must be placed in the
library fund or paid over to the library treasurer by the sponsoring
municipality or school district. In the case of school district public
libraries, however, pursuant to Real Property Tax Law, §§1322 and 1324, the
amount of the taxes attributable to library purposes must be separately stated
on each statement of taxes. Thus, it is clear that tax receipts are expressly
earmarked for library purposes. Accordingly, consistent with this statutory
scheme, we believe the school district should pay over to the library fund or
library treasurer, as the case may be, those taxes which are specifically
earmarked for library purposes, as soon as practicable after their receipt.
With respect to the time prior to the
receipt of taxes, we note initially that public libraries are not authorized to
issue indebtedness in anticipation of the receipt of tax revenues (1962 Opns St Comp No. 62-978, unreported; Local Finance Law,
§24.00). The sponsoring municipality or school district, however, is
authorized, but not required, to issue tax anticipation notes in anticipation
of the collection of taxes, including those levied for library purposes (id.;
Opn
No. 62-978, supra, is superseded to the extent it concludes that a
school district public library may not, in its discretion, reimburse the school
district for interest costs on tax anticipation notes issued in anticipation of
taxes levied for library purposes.
David S. Shaw, Esq.,
Stephen J. Wing, Esq., Attorney for Howland Public Library
Howland Public Library