Property taxes are out of control, and we must reduce them.
Unfortunately, the bill under discussion will not solve the problem. While many New Yorkers think that it will cap their own individual property tax bill at 2 percent each year, it will not. The “cap” is on the growth of the total tax levy issued by the school district or municipality. It is not a cap for each individual. Depending on assessments, equalization rates, and carve-outs, a homeowner’s bill could still go up 4 percent, 6 percent, or more a year.
The bill allows for an override of the cap. School districts may increase the tax levy limit if approved by 60 percent of the voters. Local governments can override the tax levy limit by a 60 percent vote of the governing board.
In states with caps, wealthy communities tend to override those caps. Districts like ours do not. New York State already has the widest gap between wealthy and poor schools of any state; this plan will make that gap even worse.
I want to see people’s property tax bills reduced, not just have the tax levy’s growth capped. There are two ways to do that.
One way is to have the state pay for its fair share of education costs and the county Medicaid bill and to restore the revenue-sharing that it once sent to municipalities to help pay for critical local services. If the state took over the local share of Medicaid costs, that would lower county property tax levies by 30 to 48 percent.
Remember, it matters whether revenue comes from state income taxes or local property taxes. State income tax reflects your ability to pay – your actual income – and it goes down if your income goes down. Property tax goes up regardless of your ability to pay and changed life circumstances.
The other way to reduce property taxes is to pass what is called a “circuit-breaker” bill, which would reduce the tax burden for the majority of New Yorkers – the poor, middle class, those on fixed incomes, and families earning up to $250,000 a year. It would apply to all property taxes – school, county, town and village. It would be handled through a tax credit on state income taxes. For example, someone with a local tax bill of $6,000 and an income of $60,000 would get a refundable state income tax credit of $1,680. This is the approach I strongly support, because it would help us maintain proper support for schools and municipalities, and it would result in REAL property tax reductions for overburdened taxpayers.
In order to raise the revenue required to implement either of these two solutions for reducing property taxes, we must reform our state income tax structure so that the wealthiest New Yorkers pay their fair share of taxes. I will continue that fight for reform, and perhaps many more New Yorkers will join in that effort as they feel the destructive impact of state budget cuts where they live, work, and send their children to school.