CHENANGO COUNTY – Among the recommendations released Tuesday in the New York State Commission on Property Tax Relief’s preliminary report was a property tax cap, which would limit the increase in the annual property tax levy to 4 percent or 120 percent of the Consumer Price Index, whichever is less. While limiting the increase in annual property taxes may seem like a good idea, reactions in Chenango County and throughout New York State have been mixed, with some asking what effect the tax cap could have on the educational system.
In January, then Governor Eliot Spitzer established the Commission on Property Tax Relief to identify possible solutions to the state’s increasing property tax burden. Tuesday, the commission released its preliminary report, citing both the problems and their recommendations.
“New York State has the highest local taxes of any large state in America – 79 percent above the national average,” the report states. According to the report, the reasons for New York’s high taxes are due in part to high expenses and a low percentage of state aid compared to the national average. New York schools’ per student spending is more than 50 percent above the national average, and while the state spends more than the national average on public education, their contributions still account for only 43 percent of the total cost – an amount lower than the national average of 47 percent.
With the cost of education increasing every year, the commission said there are only three ways to address the rising cost of education. “There are only three options to address the ever increasing cost burden of New York State Education system: Decrease expenses – or at least decrease the rate of growth – increase state aid or increase property taxes.” The situation is similar for municipalities. As costs increase and revenue remains steady, municipalities have the same options.
The commission made several recommendations, but the most prominent was a property tax cap. The property tax cap would limit the annual property tax levy increase to four percent. School districts with lower tax levy increases could bank the remaining levy for the next year. The proposed tax cap would allow school districts to forgo the annual budget vote, unless they were proposing a budget that would require a tax levy increase that would exceed the cap.
Other recommendations that would help school districts and municipalities cut costs include changing state law in an effort to support efforts to rein in the cost of salaries, pensions and health care. The commission also recommends no new state mandates to be instituted without a complete accounting for the fiscal impact on local governments. The report also encourages consolidation among municipalities.
Changes to the STAR program are also recommended. The changes would include factors such as a taxpayers income and their ability to pay.
Locally, Mayor Joseph Maiurano has come out in support of the commission’s recommendations. “This report is an exceptionally outstanding job. Its focus on expense containment and income-sensitive ‘ability to pay’ reform of the STAR program are key components among many factors,” Maiurano said.
Governor David Paterson has come out in support of the tax cap; however other politicians, like Assembly Speaker Sheldon Silver have said they won’t commit to a tax cap unless the state commits to greater educational aid.
Maiurano said he feels the commission has done a tremendous service in compiling their findings. “I only hope that the legislature will expediently come together behind the Governor’s solid leadership to implement the commission’s findings. I feel this is a historic moment and turning point in our state’s attention to a major issue and it is an exciting cause for optimism moving forward.” Maiurano said the report would encourage municipalities on the local level to look into their own budgets and find ways to cut expenses, by having an open mind to consolidation, shared services and green energy.