Long Island needs a property tax cap – By George J. Marlin
The following appears in the May 20-26, 2011 issue of the Long Island Business News:
The verdict is in from the Washington, D.C. think tank, the Tax Foundation: out of 1,823 counties with populations over 20,000, Nassau ranks No. 1 in median home property taxes, edging out New York’s wealthiest county, Westchester, where median home prices are over 13 percent higher – $562,000 versus $494,000. Sadly, the 10 counties with the highest property taxes are either in New York or neighboring New Jersey and 12 of New York’s 62 counties are in the top 100. This helps explain why people in both states are voting with their feet and seeking job opportunities in the low tax/ high employment southern and southwestern parts of the nation.
These depressing findings make it all the more imperative that Gov. Andrew Cuomo’s property tax-cap legislation be signed into law.
Cuomo’s bill calls for capping increases in annual local property tax levies to no more than 2 percent or the rate of inflation, whichever is less. To push the levy above the cap, two-thirds of local municipal governing bodies would have to vote yea. In school districts, which comprise over 60 percent of the property tax burden outside of New York City, the support of 60 percent of ballot-box voters would be required.
Cuomo’s bill is particularly tough on school districts. The annual school budget vote will be eliminated. Taxpayers would vote, instead, on the proposed tax levy. A 51 percent majority would be required for any tax increase below the cap but 60 percent if it is higher. If the school district voters reject the proposed higher tax twice, there would be no increase; taxes would be frozen at the previous year’s levy.
The cap would force schools to watch every dollar, to implement efficiencies and to streamline bureaucracies. It would also force Albany to come to terms with burdensome and expensive unfunded state mandates. The Taylor Law would have to be reformed to restore leverage in contract negotiations to management. School districts would need the authority to address the mounting costs of health care benefits for retirees. Also, the state would have to address the spiraling costs of pension contributions and seriously consider implementing portable defined contribution retirement plans for future employees. Finally, capping growth at the lower of 2 percent or inflation will quickly slow school spending if we experience inflation in the years ahead.
The Empire Center for New York State Policy, in a newly published analysis, points out that “Cuomo’s proposed cap is modeled after the most successful tax limitation approach tried in other states –Proposition 2 ½ in Massachusetts. Proposition 2 ½, which allows for voter overrides, has restrained the growth of the tax burden without compromising essential public services. Despite the tax limitation, Massachusetts’ schools rank among the best in the nation.”
The good news is the Republican-controlled Senate passed the governor’s property tax cap in January. However, the Democratic Assembly majority, captives of municipal and teacher unions, are characteristically dragging their feet.
To tighten the screws on Democratic assemblymen, the governor and his cabinet members, who are traveling the state promoting the cap, must incite beleaguered taxpayers to command their representatives to give them, not the vested interests, the power to check the growth of taxes.