Thursday, March 6, 2008

Toward Solving The Property Tax Dilemma

On January 23, Governor Spitzer appointed a New York State Commission on Property Tax relief. According to the Executive Order creating this commission, its purpose is to “examine the root causes of high property taxes, identify ways to make the State’s property tax system fairer, and develop a fair and effective school property tax cap to hold the line on property tax growth”. The Commission will be headed by Nassau County Executive, Thomas Suozzi.


Northern Westchester Bureau Chief
Catherine Wilson

The Suozzi Commission, as it is now known, will address the following areas: • The root causes of New York’s high property tax burden including local expenditures and state mandates.

• The effectiveness of property tax relief measures for taxpayers.

• Approaches to imposing a limit on school property tax growth.

• Impact of state support and tax relief programs on local school budgets and taxes

• Public involvement in the development of school and local government budgets.

The Guardian spoke with several of our New York State legislators with regard to their hopes for this commission. Republican Senator Vincent Liebell, 40th District, expressed his concern, stating “ This is the most critical issue facing us after security matters. If we do not address our high taxes, we will drive out the middle class and become a state for the very rich and the very poor.” Senator Liebell noted that the New York State Senate has already submitted legislation to allow school districts to have the State take over their expenditures
to achieve cost savings through bulk purchases, etc. Liebell was hopeful that the Suozzi Commission would address the need for cost savings at the school district level. Senator Liebell dismissed property taxes as being “an archaic tax.”

He stated, “It was established when most property owned produced income, such as farms, so it was essentially an income tax. But most homeowners nowadays derive no income from their properties”. Liebell was also not impressed with the State’s various mechanisms to reduce the property tax burden, stating “ e Star programs and rebates just put Band-Aids on the hemorrhaging.”

To address the property tax issue, Liebell recommends that the Suozzi Commission look at both efficiencies, such as the possible consolidation of government services, and other sources of revenue. One of the biggest questions to be addressed, Liebell believes, “are the many different levels of government we have in New York State”.

Democratic Assemblyman Adam Bradley, 89th District, refers to the burden on local residents as “the middle-class squeeze” but concedes
that state property taxes are “an incredibly complex issue”. However, Bradley noted “The first thing to do is to figure out what is the
best way to pay for education since this is the largest expense in local property taxes.” Bradley cited examples of other state models to
follow: “Massachusetts determines the average cost to educate a child by region and then provides that amount to local school districts”. If
such a plan was adopted in New York State, Bradley noted “Local voters could determine what additional ‘bells and whistles’ they would provide through property taxes, but the basic education would be provided by the State.”

Note: is legislation has recently been proposed in Albany: Funding Schools on Income Tax Instead of Property Tax (Bill A746 Cahill)

This bill would mandate all costs of a basic quality education be paid directly by the State of New York through revenue collected in income
taxes. A formula set by the New York State Board of Regents would determine the cost per student of a basic quality education (adjusted
for regions and special student needs), and would establish a schedule of mandatory basic services. Annually, school districts would submit a
basic budget to the State Department of Education for approval. Districts would have some flexibility in determining what would constitute
a basic budget during the five year phase-in period.

In addition, a district could elect, by a two thirds voter majority, to increase taxes for education which would be imposed by a higher income tax charged to individuals in your school district. In order to fund additional spending, a local income tax surcharge would be imposed. Presently, $21.5 billion is raised on the state level to fund education, and $23.5 billion is raised from local property taxes. Under this proposal, state income tax would have to rise significantly to fund the current levels of education spending.

Bradley warned, “Education needs a fixed revenue source for funding, so alternatives are difficult. Other sources of funds, like income taxes and fees, are subject to economic fluctuations. Property taxes are fixed. But, that means property taxes are also a regressive tax.” A regressive tax is one that adversely affects lower income individuals. Property taxes assessed are the same for similar properties; therefore, lower income homeowners would pay a greater share of their income in property taxes than owners of similar homes who have high incomes.

The County’s plans for “Westchester 2000” proposed consolidating government agencies and services to save money by taking advantage
of bulk buying power. Bradley supports that approach but warns that consolidation would “surrender some of the personal touch” residents
expect from their local governments. However, given the current State budget gap of $5 billion, Bradley feels that the issue is too critical to
be ignored any longer. He declares, “We have to determine what’s the fairest way as a policy to raise revenues. But we have an obligation to
mitigate the tax burden on the constituents we represent”.

Sharing this concern is Democratic Assemblywoman Sandy Galef, 90th District. Earlier this month, Galef cosponsored a bi-partisan bill to
address the regressive nature of local property taxes. Her proposed bill, known as the “Middle Income Circuit Breaker Bill”, co-sponsored by Republican State Senator Little, 45th District, would tie property taxes to income. Galef ’s proposal would replace the Star rebate program and would be calculated as follows: According to a press release from Galef ’s office, “Shockingly, there are tens of thousands of New Yorkers who are paying from 6 to 20 percent and more of their household income in property tax just to stay in their homes.” Galef ’s bill seeks to have a property tax cap from 6 to 8 percent of a homeowner’s income.

Galef stressed that the property tax issue required a “two-pronged approach.” She told this reporter, “We need to help people pay their
taxes, but we also have to reduce the cost of government and schools”. Galef acknowledged that “while we can switch how we fund our schools and government, we still have to cut spending.” She agreed with other legislators that sharing services and eliminating borders between local governments would result in cost savings.

Since the consolidation of services and reduction of government will affect all New Yorkers, Galef is seeking input from local residents
at a joint forum with New York State Comptroller Tom DiNapoli at the Cortlandt Town Hall on April 10th from 3 -5 pm. Galef is also asking residents to provide their choices for property tax reforms based on proposals in Albany and successful options adopted in neighboring states. The full details of these options will be found in Assemblywoman Galef ’s March 2008 newsletter. Galef kindly provided The Guardian with an advance copy for this issue.

The Suozzi Commission is scheduled to deliver a preliminary report to the Governor on May 15th. However, it is not too late for local
residents to have their opinions heard on this matter. The Guardian has provided a copy of Assemblywoman Galef ’s Constituent Questionnaire. We urge our readers to review the property tax reforms outlined on this questionnaire and to contact their local State legislators with their recommendations and concerns.

If your Household Gross Tax Credit You Would Income Tax is: Receive Would Be:

$120,000 or less 70% of real property taxes paid in excess of 6% of your household income.


$120,001-$175,000 70% of real property taxes paid in excess of 7% of your household income.

$175,001-$250,000 70% of real property taxes paid in excess of 8% of your household income.

$250,001+ No Credit


Northern Westchester Round-Up

North Castle: The Town lost its appeal against developer Donald Trump who is proposing a large development at the closed-off portion of Oregon Road. Oregon Road runs through the Eugene and Agnes Meyer Nature Preserve, owned by the Nature Conservancy.


Pleasantville: Pace University hosted a kickoff for a Relay for Life event for cancer survivors planned for April 2008. The university is planning a two-day, overnight event and is hoping to attract 50 teams to raise $50,000 for cancer awareness.

Valhalla: The New York State Department of Environmental Protection issued a traffic study on the effects of the closing of the road over the Kensico Dam. The study confirmed the overloading of traffic onto neighboring roads. The study will be presented to the local communities in March.

Yorktown: The Board of Education upheld the suspension of the principal for the Yorktown High School, John Sullivan. Over 400 local residents showed up for the hearing voicing their support for the principal.

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