Tag Archives: property tax cap

Governor Cuomo Holds NYS Budget Hostage Without Permanent Property Tax Cap; I Object

Voting on a school bond referendum, Great Neck, Long Island. New York State’s property tax cap removes local control over spending for education and local services including parks and libraries © Karen Rubin/news-photos-features.com

By Karen Rubin, News& Photo Features

New York State Governor Andrew Cuomo has said he won’t sign the state budget unless it makes permanent the property tax cap.

“The highest tax in the state is the property tax and it is a killer,” Governor Cuomo said.”We want to reduce economic pressure on families by making sure government is not aggravating the problem with increased expenses. We’re going to cut your state income tax and we’re going to cap your property taxes so you know it’s not going higher than 2 percent. And I will tell you this as sure as I am before you today: if we do not have the permanent property tax cap in that state budget, this hand will never sign that state budget until it’s in there.”

From the very beginning, I have objected to this trampling off local control with an arbitrary and unreasonable constraint designed to hamstring and ultimately destroy local governments. Cuomo’s original intent was to force school districts and other local governments to cannibalize their reserve funds; the second was to force consolidation and dissolution of local governments and the third was to use local taxes as the bogeyman, so politicians could appear to be on the side of taxpayers.

Of course the property tax is the largest state tax and of course school taxes are the largest component. Something has to be “largest”. What should be? But local property taxes are spent where they are used, and local people have the greatest ability to participate in spending decisions. In fact, school and library taxes are the only taxes we taxpayers directly vote.

What the property tax cap does, though, is remove local control. Communities should have the right to decide if they want to improve their schools or parks. The property tax cap which basically keeps the annual increase to 2% or the rate of inflation whichever is less says: we don’t want any growth or improvement or new investment in your community. We want the status quo, and if that means deterioration, so be it. (Little known fact: the property tax cap incentivizes bonding because the debt service isn’t counted toward the cap.)

Somehow, and fairly ingeniously I think, the Great Neck Public School district has managed to continue to be among the best in the country and still average only 1.8 percent increase in the tax levy since the property tax cap was implemented in 2012, despite increasing enrollments and unfunded state mandates. This year, though, through the complicated formula, the school district could have raised taxes by 4.09 percent and still fall within the cap, is only seeking 1.94 percent increase. .

I resent the property tax cap by which the Governor and state legislators can declare themselves champions of reducing or controlling taxes.

But here’s the thing: New York State’s property taxes are not the highest in the nation; Nassau County’s taxes are not the highest; and both of these do not take into account that Long Island and New York’s incomes and our housing values are higher.

According to a survey by Wallethub, a financial services company, New York State ranks 8th (not first) in property taxes. New York ranks 43rd in its real estate tax rate, at 1.68 percent. You know which states are higher? Nebraska (1.80), Texas (1.83), Vermont (1.83), Wisconsin (1.94), Connecticut (2.07), New Hampshire (2.20), Illinois (2.31), and New Jersey (2.44) (See the study: https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/)

Even so, do you want to be Alabama, which is #2 on the list for lowest taxes, where the median home value is $132,000 and the tax is $558 (0.42%), or Louisiana, #3, where the median home value is $152,900 and median tax is $795 (0.52%)? Louisiana ranks 51st in health care, Alabama is 48th. New York is 17th (fourth most physicians per capita)

USA Today ranks New York’s public education 9th noting, “Between 2003 and 2015, the achievement gap between eighth graders living in poverty and their wealthier peers narrowed by the largest amount of all states…Annual public school funding totals $18,665 per pupil in New York, the third highest expenditure of all states.” (Top three are Massachusetts, New Jersey and Vermont). Alabama ranks 43rd (14th lowest in public school spending at $10,142). Louisiana is 46th, Mississippi is 48th.

Yes, total taxes are high: New Yorkers spend 17.07 percent of income on taxes, second highest after Connecticut (17.65 percent). But New York State is spending billions on a 21st century infrastructure and racing toward 50:50 clean energy by 2030. This is where I want to live. So do 20 million others, a number that is increasing, even as unemployment rates are at the lowest ever and the number of jobs is at an all-time high.

We pay a lot in taxes because our incomes are higher and our housing values are higher, what is more, we get more for our money, making for a higher quality of life.

The states that don’t charge an appropriate amount of state and local taxes – that is related to the cost of providing services and public investment – depend on federal handouts. New York is one of 11 states that send more money to the federal government than it gets back, in fact the #1 donor state, sending $36-$48 billion more to the federal government than it gets back. Alabama is 4th “most federally dependent state”; Louisiana is 10th.

New York sends the second highest amount in federal taxes, $133 billion (California sends $227 billion), and is fourth in the average amount of federal taxes per adult ($8,490), behind Connecticut $10,279), Massachusetts ($9,445), and New Jersey ($8,811).

(Here’s an idea: New York should do what tenants do in a landlord dispute and put that $36 billion into escrow until the SALT deductibility issue is fixed.)

But we shouldn’t be punishing our localities because of the criminality of Republicans to use the tax code as political weapon – according to State Comptroller Tom Dinapoli, the SALT deduction cap has driven down tax receipts by $2.3 billion, as wealthiest New Yorkers choose other places for primary residency.

But the tax cap is also a political weapon.

The larger objective is to eliminate local municipalities entirely – to force villages to consolidate into towns, towns into counties, school districts into larger school districts. But the fallacy in that is all that it saves is a few administrative positions. Villages and school districts already have cooperative purchasing, mutual aid; school districts even cooperate on transportation where feasible. Our school district spends 4 percent of its budget on administration, the lion’s share, 75 percent, on instruction (12 percent on building, grounds & capital projects, 6 percent on transportation). (To see where your schools spend every penny, come to Great Neck South High School this Saturday at 9:30 am for the line-by-line budget review.)

The state boasts that since implementation the tax cap has “saved” taxpayers $24.4 billion statewide – that works out to $1000 per capita, divided by 7 years, or $142 a year. I’m not sure that’s worth giving up local control.

But just as Cuomo and the Congressmembers decry Trump’s disparity in federal spending for blue states versus red states and the attack on state control over its ability to raise revenue and spend, it is the same thing with local spending: there is gigantic  disparity in the level of state aid to school districts, with the result that New York City only has to raise 50 percent of its school budget from property taxes, while Great Neck, which gets just 4 percent from the state, has to raise 95 percent through property taxes. Here’s another measure: Roosevelt, with 3270 enrolled students, gets $53 million in state aid; Great Neck, with 6399 enrolled students, gets $10 million – the difference made up from property taxes. That’s just the way it is.

What the property tax cap means is that virtually all Great Neck’s school spending is governed by the cap; other districts have much less that is controlled by the tax cap.

The responsibility for determining if our elected representatives are properly handling our tax appropriations is on the community, not an arbitrarily selected cap enshrined in law.

We see what our school taxes (and park and library and sewer district) pay for and I don’t want the state – or some politician looking to score points – deciding we can’t have low class size or a robotics club or a fencing team or an opera performance (Great Neck South High marks its 50th anniversary full-scale opera production, April 12). This community has decided these things are just as important to our district’s mission of helping every child fulfill their full potential as cramming the latest incarnation of ELA and math or operating school buildings as if they were prisons. Our mission has been to instill a love of life-long learning. And the investment this community has made in public education has brought solid ROI day after day.

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© 2019 News & Photo Features Syndicate, a division of Workstyles, Inc. All rights reserved. For editorial feature and photo information, go to www.news-photos-features.com, email [email protected]. Blogging at www.dailykos.com/blogs/NewsPhotosFeatures.  ‘Like’ us on facebook.com/NewsPhotoFeatures, Tweet @KarenBRubin

Many Cheers But One Big Jeer for NYS Governor Cuomo: Local Control

NYS Governor Andrew Cuomo takes aim at local control and public schools © 2017 Karen Rubin/news-photos-features.com
NYS Governor Andrew Cuomo takes aim at local control and public schools © 2017 Karen Rubin/news-photos-features.com

By Karen Rubin, News & Photo Features

There is much to cheer in Governor Cuomo’s State of the State address, one of which he delivered at SUNY Farmingdale on Long Island. His agenda for infrastructure, mass transportation improvements, water quality, affirming women’s reproductive rights,  support for immigrants and refugees, free tuition at public colleges for those who qualify, and how he couples the need for aggressive climate action with vigorous sustainable economic development, giving his blessing leading to LIPA’s landmark decision for a 90 megawatt off-shore windfarm to supply the East End, the first utility-scale project in America and making Long Island a leader in a new American industry, put Cuomo in line another New York Governor, Franklin Delano Roosevelt, which FDR brought to the White House as the New Deal (and it is clear Cuomo is jockeying for an eventual run for president).

The one jeer? His renewed assault on local control, which he casts as the culprit for unceasingly high property taxes, which is a not-really-veiled attack on public education.

Each year, Cuomo has used a different mechanism to make the property tax cap – which limits the amount a municipality can raise through property taxes to 2% or the CPI, whichever is less – an offer that can’t be refused. This year, Cuomo has unveiled a “groundbreaking” proposal which mandates the county executive “to develop localized plans that find real, recurring property tax savings by coordinating and eliminating duplicative services and proposing coordinated services to enhance purchasing power, such as jointly purchasing and coordinating use of expensive transportation or emergency equipment. Taxpayers will then vote on these cost-saving plans in a referendum in the November 2017 general election.” If the referendum fails, well then, the plan would need to be reworked and resubmitted in November 2018. (Notably, New York City is exempted.)

But the argument begins with a flawed argument that we spend 2.5 times on property taxes than state income taxes. Doesn’t that spending differential reflect how much we pay for the services we actually receive locally? Plowing snow. Repairing roads. Treating sewage. Picking up garbage. Delivering water. Maintaining police, fire and emergency services. Keeping street lights on. And yes, public education.

Though people like to charge that Long Island pays the highest property taxes in the country, that isn’t true. Nor do New Yorkers pay the highest taxes in the nation, When all taxes are tallied –real estate, income, sales taxes and fees, New York comes in 6th (behind Illinois, Nebraska, Wisconsin, Connecticut and Rhode Island).  Nor are the taxes out of line to the incomes earned and home values. But most importantly, for the quality of municipal services including public schools, we want in our community.

Question for Cuomo: before you forcibly consolidate local governments, how much money would be saved by the exercise and how would consolidation actually work? North Hempstead already promotes intermunicipal cooperation; the school districts already participate in joint purchasing and shared services (BOCES) wherever practicable. Indeed, Great Neck public schools now earn a tidy sum in revenue from other districts for tuition paid into programs such as SEAL (rather than paying out $1 million in tuition). If there is waste and duplication, voters can show their ire at the ballot box or make their better-government suggestions known at public meetings.

But the real target of Cuomo’s assault on local governments and property taxes is public education, since 60-65% of the property tax bill goes to fund schools.

Talk about wasteful duplication. If he were so concerned, Cuomo wouldn’t be pushing for a second tier public school system – for-profit charter schools – without the same financial or academic accountability or subject to the same state mandates, to divert money from public schools.

Indeed, Long Islanders wouldn’t pay so much in property taxes if we weren’t so shortchanged in state aid for our public schools – though Long Island has 17% of NY’s student population, we only receive 12% of  state aid. It is a lot more obvious when you compare the percentage of school budgets funded by state aid: New York City, where property taxes are low and just about everybody gets some sort of tax holiday, gets 50% of its school budget paid by the state; in comparison less than 5% of Great Neck’s school budget comes from the state. Also, new enterprises, like Avalon Bay residential development, are getting a PILOT by Nassau County’s IDA, reducing the taxes they contribute to the school district as well as Village of Great Neck; the difference is made up by homeowners.

Governor Cuomo has made property taxes, and particularly school taxes, the enemy, falsely claiming that the taxes inhibit growth. But the services that are funded through property taxes contribute to economic growth and activity (an educated workforce, lighted roadways) as well as quality of life.

“Economic theory expects people to consider taxes when deciding where to live, but most studies show taxes only tangentially influence these decisions,” explains Stephanie Hunter McMahon, professor of law at the University of Cincinnati College of Law, in a WalletHub report. “Taxes are, therefore, more influential for what they do or do not provide rather than the rate itself…these taxes are really payments for the goods and services state and local governments provide to the taxpayer and other members of the community.”

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© 2017 News & Photo Features Syndicate, a division of Workstyles, Inc. All rights reserved. For editorial feature and photo information, go to www.news-photos-features.com, email [email protected]. Blogging at  www.dailykos.com/blogs/NewsPhotosFeatures.  ‘Like’ us on facebook.com/NewsPhotoFeatures, Tweet @KarenBRubin