The Case For The Cap
Legislative column from Assembly Minority Leader Brian M. Kolb (R,I,C-Canandaigua)
July 9, 2010
Last week, after 92 frustrating days of delay, the Assembly Majority finally passed the remaining portions of the 2010-11 State Budget. While the final State Budget is still not in place because the Senate Majority left town without completing their work, the contours of a spending plan are in plain sight – and the view is not pretty. The final plan will likely include $1.45 billion in taxes, fees and revenues and, incredibly, spend more than last year! That is why I asked if readers finally “had enough” of Albany’s tax now, spend more, pay later policies. I also wrote how the budget bill’s absence of a property tax cap would mean your local property tax bills can continue rising. I believe that the Majority’s failure to enact a property tax cap represented a significant missed opportunity for New York State, which is why I want to make “the case for the cap” in this week’s column. A PROPERTY TAX CAP MEANS YOU PAY LESS A property tax cap is essentially a law that limits the growth of local property tax levies to a certain amount. In so doing, a property tax cap helps protect homeowners from the year-to-year skyrocketing increases in school taxes that significantly add to the costs of owning a home, especially for middle-class families and senior citizens living on fixed incomes. Having a property tax cap in place would put the brakes on an explosive growth of property taxes. PROPERTY TAX CAPS: NOT SOME NEW, UNTESTED IDEA Used by states for decades, property tax caps are not some new, untested idea. California instituted its property tax cap back in 1978. Over a dozen states already have property tax caps, including neighboring Massachusetts that enacted its cap back in 1980. So don’t let anyone try to tell you that a property tax cap is some sort of radical, untested proposal. Nothing could be further from the truth. WHY NEW YORK NEEDS A PROPERTY TAX CAP You already know that New York homeowners endure some of the highest local property taxes in the nation, nearly 79 percent above the national average. What you may not know is that when property taxes are measured as a percentage of home value, 16 out of the top 16 counties in the nation were located right here in Upstate New York. Outside of New York City, approximately 62 percent of property taxes are school property taxes – and property tax levies are rising at more than twice the rate of inflation and salaries. To truly witness the extent of this explosive growth in school property tax levies, it helps to step back and view the issue over the long term. According to the Office of the State Comptroller, from 2000 to 2009, school property tax levies increased by approximately $13 billion or 84 percent. That is a staggering sum. Folks, those numbers don’t lie, and neither do these: over the last decade, nearly two million residents left New York, the largest exodus experienced by any state. A large reason for their departure? It is simply too expensive to live, work and raise a family here. Rising property taxes have only made it more so. REAL SOLUTIONS TO ENACT A CAP AND DELIVER PROPERTY TAX RELIEF I have co-sponsored legislation – Assembly Bill A.2796, the “New York State Property Taxpayers Protection Act” – that would limit the growth of local school levies to four percent annually or the rate of inflation, whichever is lower. In five years, this measure would provide billions in property tax relief for homeowners and school districts. That is serious savings, and it could help middle-class families hurt by high property tax bills. So far, 74 municipalities across the state have passed resolutions in support of this legislation and, according to the New York State Association of Realtors, 83 percent of residents favor a property tax cap. Along with enacting a tax cap, the legislation I support would:
- Assist Local School Districts with the Costs of Certain Testing: Provide 100 percent reimbursement to schools for costs incurred from 4th and 8th grade Math and English tests with an estimated cost savings to school districts of $30 million. In addition, the bill would consolidate school district paperwork to further reduce administrative costs;
- Make the State Pay for Mandates it Imposes on Local Governments and School Districts: Ensure that any state directive imposed on a local government or school district costing more than $10,000 annually, or $1 million statewide, is fully funded by the state. Additionally, require the fiscal impact of legislation to be stated before a bill is voted upon by the Legislature; and
- Enable Local Governments to Combat Medicaid Fraud: Provide a grant to reimburse counties for Medicaid fraud investigation software.