The New Year has arrived and the 2008 legislative session will begin shortly. With that comes a host of issues that must be addressed on the state level, however, my primary focus is that we concentrate on reducing property taxes.
Our overall tax burden is still the heaviest in the nation, 56 percent higher than the national average. Young people cannot afford to buy homes, seniors are struggling to pay their bills and businesses are facing immense challenges to create and retain jobs. We need to reverse this trend and reinvigorate our economy so that we do not continue to lose our competitive edge to other states.
Stopping out of control spending and reining in taxes is the key to curbing skyrocketing property taxes. The New York State Property Taxpayers Protection Act is a plan that aims to do just that by saving property taxpayers and school districts approximately $16 billion over five years. The plan introduces some new and innovative ideas for reforming property taxes, but more importantly, it would help reverse the trend in this state that has caused an exodus of people and businesses.
One of the main provisions in the plan aims to control property tax increases by capping school district levies at four percent annually or the rate of inflation, whichever is lower. If voters see fit, they have the option to override this limitation by a two-thirds majority vote. Otherwise, the legislation intends to keep school aid increases from growing out of control.
The concept of limiting tax levy growth is not new and not without merit. Massachusetts, once saddled with the highest property taxes in the nation, improved their ranking to 32 with the adoption of comprehensive measures, which capped the growth of property taxes without endangering education. Through our own legislation, New York can look to join Massachusetts as one of the top five education systems in the nation.
Also included in the plan are a series of measures that would provide mandate relief, thereby, further easing the burden on taxpayers. The act would provide 100 percent reimbursement to schools for costs incurred from 4th to 8th grade math and English tests, saving school districts $30 million. Additionally, any state mandate imposed on localities costing more than $10,000 annually would be funded by the state. Lastly, the act would require the state to take over the costs of all optional Medicaid services within 5 years, saving taxpayers $10 billion.
In addition to the financial benefits of limiting tax levies, the act aims to eradicate financial mismanagement and fraud by creating the Office of State Inspector General for Education to investigate abuse, corruption and misconduct in schools. It also enables local governments to combat Medicaid fraud, estimated to cost New York taxpayers nearly $4.5 billion annually, by creating a grant to reimburse counties for expenses associated with those investigations.
There are additional measures that we must explore such as evaluating different options on how we fund Medicaid and school district budget costs in the future. In addition, we must seek alternative ways to reduce spending at all levels of government.
It is estimated that homeowners and businesses would save approximately $1.5 billion by limiting the growth of the school property tax levy for the 2008-2009 school year. Had the tax levy been in place in 2006, taxpayers would have saved $1.3 billion. These astonishing figures serve as proof that steps can be taken to provide long-term property tax relief for New York residents. I invite both the governor and Assembly Majority to analyze, debate and adopt provisions of the New York State Property Taxpayers Protection Act so that we can stop our state from leaving residents and businesses no other choice but to find better opportunities elsewhere.