Last week’s column drew a big response. Not that any of the reporters or citizens who contacted me were surprised to learn that Upstate New York has remarkably high property taxes. But they were startled to learn that we claim 9 of the top 10 counties in the nation in property taxes as a percentage of home value.
If we agree that this is a problem (and, of course, some don’t, seeing high taxes as the fair price for a high level of government services), the question becomes, what can we do about it?
Property taxes are poised to be a big focus of this year’s legislative session in Albany. The three major players – Gov. Eliot Spitzer and the Senate and Assembly – each have ideas for addressing the issue.
Spitzer
We can expect to see Spitzer elaborate on his campaign promise to expand the existing School Tax Relief program in his upcoming budget proposal, due Jan. 31. Spitzer has pledged to increase home-value exemptions that reduce the amount homeowners pay in school taxes. According to a release from his campaigning days last fall, the details work as follows.
In the first year, the Spitzer plan would cost the state (which pays school districts the difference) an additional $1.5 billion, on top of the $3.4 billion current STAR expense.
Most of the additional benefit, $960 million, would go to nearly 2.2 million New Yorkers with incomes at or below the statewide median (this figure would be adjusted upward in high-cost areas downstate). New York City residents, who now don’t benefit much from STAR, would see an income-tax cut costing a total of $250 million. Another $290 million would go to taxpayers left out of the first two groups, except that the wealthiest 2% of New Yorkers with incomes exceeding $235,000 would not see any additional STAR benefit.
Most of the academic and fiscal watchdogs who have evaluated STAR judge it harshly and question why Spitzer is building upon it, considering that New York’s experience has shown it provides at best temporary relief from high taxes and has numerous other flaws. Some analysts, concerned about the fact that the original STAR program benefits wealthy homeowners the most, are gladdened to see Spitzer at least target more relief toward those with more modest incomes.
But school taxes are the bane of many a homeowner, and anything that sounds like it will cut them can have a nice ring to it. If Spitzer has done any rethinking of this plan, he hasn’t said so.
The Senate
Senate Majority Leader Joseph Bruno has proposed a more expensive plan that builds upon the Legislature’s action last year in sending school tax “rebate checks” to homeowners across the state. If that sounds a little like what you might get from a car dealer, the checks were viewed in a similar light by many New Yorkers, especially since they arrived in mailboxes weeks before every legislator faced re-election at the polls.
The amount of the rebate is based on the current STAR program, which sends more relief to taxpayers in counties with high home values. Bruno would triple the rebates, boosting their cost from $900 million last year to $2.6 billion this year – remember that’s on top of the existing $3.4 billion cost for STAR.
Bruno and fellow Senate Republicans also want a Blue Ribbon Commission to study the property-tax problem and they want to allow for voter-initiated tax rate limits. Voters fed up with high taxes could collect signatures, place a proposition of the ballot, and enact a three-year cap on tax rates.
The Assembly
Democrats in the Assembly plan to look at the problem in a Feb. 6 hearing in Albany. The hearing looks to be more focused on the technical, but critical, questions of ensuring that property is accurately assessed for tax purposes. But it will also touch on a bill by the Assembly’s property-tax committee chairwoman, Sandra Galef, to create a Blue Ribbon Commission to study the property tax and possible alternatives to raising money for schools.
For more ideas from experts inside and outside of state government, check out CGR’s report on our Jan. 10 property tax conference at www.newyorkmatters.org.
The fact that Albany is paying attention will encourage or scare you depending on your view of the Capitol. Whatever action state government ends up taking, the impact on local property taxes could be minimal. After all, local taxes are determined at the local level. Yes, they are heavily influenced by what happens in Albany, whether state aid to schools and local governments goes up, what happens with the Medicaid subsidized health program and more.
But ultimately, those of us who complain about property taxes need to get involved. Start thinking about what government services you would be willing to give up in order to reduce your tax bill. Would you surrender your local village or school district to merge into a larger entity and save money? And, if you think the problem is politicians who spend too much, are you willing to vote against them? To some extent, politicians view the electorate like spoiled children who can’t be satisfied (we want our services and low taxes BOTH, and we’ll keep voting for incumbents until they give them to us!) because that’s how we act.
January 22nd, 2007 at 9:06 am
Your last paragraph is the key. In order to cut taxes, you ultimately have to cut spending. The quandary for politicians is that they use spending, including “member items” (i.e., “pork”), to ensure reelection. Unlike the private sector, they have no real incentive to cut spending.
New Yorkers, particularly the middle class, need to say “No” to government entitlements. It may be tempting to take government money when your child needs braces, but you are better off paying your own way. What you “save” by receiving government help you will ultimately pay in higher taxes. That is the message the taxpayers need to get. Then they can say to their elected officials, “Cut taxes AND spending, and we will keep you in Albany.”
January 25th, 2007 at 2:30 pm
I’m glad to see this issue get so much attention, I hope some positive action results.
The Governor’s idea sounds great as a start. Focus on the middle class (and below) for tax relief. STAR has problems, but don’t throw out the baby with the bathwater. Beef up STAR until it can be replaced with something better (like a Property Tax CAP.)
Senator Bruno’s also got a good plan. Rebates are a gimmick but they spend like real money! They also provide political cover to cut spending in environments like Albany, so beholden to special interests.
Finally, the Assembly proposes another “Blue Ribbon Committee”. Just what we need (snicker). Unless they propose a Tax CAP with teeth — to be included within the State Constitution or the Consolidated Laws, it will be much ado about nothing.
I’m really suprised that nobody in the State of New York (except me, it seems) is promoting a Tax CAP. Basic math, but it’s not even on the radar screen. What gives?
Robert Torzynski
Greece, New York
January 29th, 2007 at 10:19 am
The well-heeled organizations that lead lobbying groups in Albany know that they will obtain a superb return on their investment in campaign contributions. Education is one example: while we spend more per student that any of the 50 states, our high school dropout rate is notably worse than nearby states.
So while we proudly pay for “the most expensive education money can buy”, we’re releasing young people into our population that are missing basic skills.
While there are a few exceptions, this monster of a tax simply drives people and jobs out of our formerly great state.
January 29th, 2007 at 12:34 pm
You ask New York residents to “start thinking about what government services (we) would be willing to give up…to reduce property taxes?” in this week’s Post Newspapers. Unfortunately, most New Yorkers have little idea of how tax dollars are spent, for a variety of reasons including access to the state budget and agency expenditures. Is there agency duplication of programs-probably. Are member items applied to projects that have substantial value ? Do we have government employees who have any real function ? When we have two local legislators listed as $10,000. level sponsors for Ad Council programs, or the just announced $192,000. grant from the state’s Quality Communities program to the Landmark Society for yet another Erie Canal planning study, or the $100,000. grant to support a local delegation traveling to Israel to attract business ( I believe one local job was created), one has to wonder. And as far as voters returning legislators to office, the very people who have created our economic decline with high taxation and bureaucracy ,when local business groups such as Rochester Business Alliance and the Rochester Democrat and Chronicle endorse virtually every incumbent, how will there ever be a turnover in Albany representation ? Perhaps we are incapable of saving ourselves-but let’s hope for reform in Albany and the media’s presentation of the necessary facts to educate the public as a start to a new day for New York.
February 13th, 2007 at 9:31 am
As a school board member in Nassau County for 12 years, I can tell you without a doubt that taxes will continue to rise and rise until someone in Albany has the guts to get some control on both spending and entitlements. Teachers and Administrators get their benefits paid into retirment by law. NCLB is a disaster on our budgets. The ‘Roslyn Effect’ has made budgets for Auditors go from $15 to $80 K per year in my very small district. We have no choice. Special Ed and BOCES, Retirement, Transportation, Utilities and Health costs rise dramatically every year. Even without salary increases (which will NEVER happen) you would see your taxes increase.
Oh, by the way, the ENTIRE legislature voted FOR a bill that would require, if at a stalemate in contract negotiations, the last offer by the UNION would be the raise. THIS WAS APPROVED UNANIMOUSLY by the legislature and vetoed by Pataki. Who knows what Spitzer will do. If you don’t believe me, go to NYSSBA.org and check it out for yourself.
School board members are fighting everyone for YOU! We have to fight Albany, Local Legislators, the Gov, and our staff at negotiations time. For this, the taxpayers think we are mindless idiots who raise taxes without a care in the world. We VOLUNTEER and pay taxes too. NYS school board members are the largest elected group of officials in the WORLD and we work for FREE