WPCNR ALBANY ROUNDS. From the Commission on Property Tax Relief. December 2, 2008: Governor David A. Paterson Monday accepted the final report of the Commission on Property Tax Relief. The Commission’s report contains dozens of measures that would reduce costs for local school districts and provide relief to New York’s taxpayers, who are burdened with the highest local taxes in the nation. The report was presented to Governor Paterson by Commission Chairman and Nassau County Executive Thomas R. Suozzi and the members of the Commission.
The report contains 32 recommendations, including a property tax cap and several additional proposals designed to rein in school districts’ costs, therefore addressing the root causes of high property taxes. Included in those recommendations are consolidation measures, mandate relief, mayoral control of school districts in the “Big Four” cities, and a STAR “circuit breaker.”
Governor David L. Patterson.
“While our first order of business must be to guide the State out of our current fiscal crisis, we have an obligation to make New York a more affordable place to live. We must stem the tide of people leaving our State,” said Governor Paterson. “With these recommendations, the Commission has laid out a blueprint for property tax relief that would benefit taxpayers while ensuring a sound education for all children. I am hopeful that the Commission’s recommendations will guide us toward legislation that will help school districts maintain current programs and provide a high standard of education for all students.”
Commission Chairman Suozzi said: “Governor Paterson has shown extraordinary leadership on behalf of the taxpayers of our State, especially during this time of fiscal crisis. The Governor is a champion of property tax relief on the statewide level and introduced property tax cap legislation in June. Since then, the economy has worsened and the Governor has fought tirelessly to rein in the State’s budget. Throughout the State, school officials testified to the Commission that they do not want to raise taxes above the capped amount, but to succeed they must have mandate relief. Now, in this report, we bring the property tax cap together with mandate relief to empower school districts to reduce costs in these harsh economic times.”
The Commission’s 32 recommendations fall into the following categories:
- – Implementation of a property tax cap.
– Reduce the burden of excessive mandates: No new legislative or regulatory mandates without a complete accounting of the fiscal impact on local governments.
– Decrease school district personnel costs: Reduce the primary expense driver for school districts.
– Limit other school district operational costs: Includes consolidation of school districts with fewer than 1,000 students, consolidation of non-instructional services through BOCES, and granting mayoral control of school districts in the “Big Four” cities.
– Improve special education: Recommended in the testimony of many school representatives as an area where mandates and costs could be reduced while student opportunities are improved.
– Encourage efficient delivery of social services to students in schools.
– Address other equity concerns for property taxpayers: Includes establishment of statewide property assessment standards.
The Commission also recommends that a STAR “circuit breaker” be enacted, but only in conjunction with, or following implementation of, a property tax cap. The STAR circuit breaker would provide targeted relief to individual taxpayers based on income and ability to pay. An income tax credit would be provided for a percentage of property taxes paid when the taxes exceed a percentage of the owner’s income. The Commission believes that it would be unwise for the State to adopt a circuit breaker without addressing the core problem – the overall growth of property taxes – with a property tax cap.
In June, Governor Paterson introduced legislation to address the unsustainable growth in school property taxes by enacting a property tax cap. The Governor’s proposal would cap the growth of school property tax levies at 4 percent or 120 percent of the Consumer Price Index, whichever is less. The proposed cap is set at a level that allows for reasonable growth of school expenses, while allowing for growth of the tax base and protecting capital expenditures already approved by voters.
The property tax cap would put voters in control of their school spending. Voters could choose to spend more than the cap by “overriding” the cap at the ballot box. A vote by at least 55 percent of the voters would be required to override the cap. If a school district has received a 5 percent or greater increase in State aid, 60 percent of the voters would be required to override the cap.
Alternatively, if voters decide to spend less, they could enact an “underride” of the cap. As an incentive to save tax capacity for future years, in school districts where the maximum levy growth permitted under the cap is not used in a given year, the unused portion would be “banked” and may be used in any future year to increase the levy by up to 1.5 percent.
New York State has the highest local taxes in the nation – 78 percent above the national average, with property tax levies rising at more than twice the rate of inflation and salary growth. Outside of New York City, property taxes account for 75 percent of the local tax burden, and eight of the top ten counties with the highest tax rates in the nation are in Upstate New York – Niagara, Monroe, Chautauqua, Wayne, Oswego, Onondaga, Erie and Steuben Counties. At the same time, Westchester, Nassau and Rockland Counties are in the nation’s top ten in terms of household taxes.
Dr. Shirley Strum Kenny, President of Stony Brook University and Member of the Commission, said: “As a resident of Long Island, I’ve seen first-hand the impact of tremendously high property taxes on our families and communities. I’ve been honored to serve on the Governor’s Commission on behalf of property taxpayers, and I am hopeful that our work will bring about the relief that is so desperately needed throughout our State.”
Nicholas Pirro, former Onondaga County Executive and Member of the Commission, said: “Thanks to the months of research the Commission staff undertook, and the testimony we received at fourteen hearings and in writing, this report represents a comprehensive plan to help taxpayers and school districts save money, while at the same time putting more dollars in classrooms. I am hopeful that, as the recommendations are enacted, our education environment and regulatory structure will be streamlined and the focus will be stronger on what matters most – our children.”
Michael Solomon, a municipal finance expert with Merrill Lynch and Member of the Commission, said: “The Commission’s report gives us a strategy for immediate and long term solutions to the unsustainably high property taxes paid by New Yorkers while providing our children with the highest quality education. Business as usual is no longer a viable option; something has to be done to bring the cost of funding education in line with today’s economic realities.”
Merryl Tisch, Vice-Chancellor of the Board of Regents and Member of the Commission, said: “In my work with the Board of Regents, I have long been interested in identifying opportunities for school districts to control costs while providing excellent educational opportunities for students. The proposals in this report, including mandate relief and strengthening BOCES, move this crucial discussion forward at a time when it could not be more important for our students and taxpayers, alike.”
Paul Tokasz, former Majority Leader of the New York State Assembly and Member of the Commission, said: “From the beginning, it has been this Commission’s intention to balance the need for property tax relief with the assurance for all students to receive a quality education. This report offers that roadmap, and I encourage the Governor and my former colleagues in the Legislature to use the current economic situation as an opportunity for meaningful change.”
Governor Paterson added: “I want to thank Chairman Tom Suozzi, Executive Director Cassie Prugh and all of the Commission Members and Special Advisors for their tireless efforts. In just ten months they have investigated the extremely complex root causes of New York’s high property tax burden, heard testimony from countless individuals, and made sense of an extremely complex system. I commend them for an excellent report that will pave the way for desperately needed relief for our property taxpayers. ”
Background on the Commission
The Commission on Property Tax Relief was established by Executive Order No. 22 in January 2008 to investigate and make recommendations regarding:
- – Root causes of the high property tax burden, including unfunded mandates and local expenditures;
– Impacts of increased state aid and existing property tax relief programs;
– Effectiveness of property tax caps in other states and, potentially, in New York; and
– The most effective means to impose a limit on school property tax growth without adversely impacting the ability of school districts to provide a quality education to all students.
The Commission held 14 public meetings, received formal testimony from hundreds of individuals, received 45 white papers from outside parties, prepared 24 major working papers, conducted nine regional roundtables and held numerous informal and formal meetings with subject experts, elected officials, stakeholders and members of the public.
More information about the Commission – including biographies, transcripts, webcasts and press releases – is available online at www.cptr.state.ny.us.
