Authorizes and directs the department of education and the state board of real property services to undertake a study with the department of taxation and finance on the fiscal impact and implication of granting local school districts the authority to implement an income tax surcharge as a means of reducing local real property taxes and funding education.
STATE OF NEW YORK
________________________________________________________________________
S. 306 A. 371
2009-2010 Regular Sessions
SENATE - ASSEMBLY(Prefiled)
January 7, 2009
___________
IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
ed, and when printed to be committed to the Committee on Education
IN ASSEMBLY -- Introduced by M. of A. ENGLEBRIGHT -- read once and
referred to the Committee on Ways and Means
AN ACT directing the New York State department of education, the New
York State department of taxation and finance and the state board of
real property services to study the fiscal impact of granting local
school districts authority to implement an income tax surcharge and
providing for the repeal of certain provisions upon expiration thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Declaration of findings and legislative intent. The legis-
2 lature hereby finds that the real property tax is an inequitable and
3 regressive form of taxation wherein low- and middle-income taxpayers pay
4 a disproportionate percentage of their income in property taxes. Under
5 such a system, ability to pay is not a factor in calculating property
6 tax liability. Rather, the present system relies on an often-archaic
7 system of property tax assessment that bears no relation to household
8 income. Further, such system of taxation has priced many people out of
9 the housing market or forced them to sell their homes. In addition, such
10 a taxing mechanism has a particularly negative impact on senior citizens
11 and those living on a fixed income.
12 The legislature hereby finds that the collection of local property
13 taxes constitutes the majority of education funding in school districts
14 throughout the state utilizing such a system. Presently, approximately
15 fifty-seven percent of school funding is derived from localities. As the
16 state continues to reduce its share of the education-funding burden,
17 school districts have been forced to increase their tax rates, thereby
18 further increasing the unfair burden of such tax system.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02078-01-9
S. 306 2 A. 371
1 The legislature further finds that gross inequities exist throughout
2 the state in terms of school districts' abilities to raise money local-
3 ly. Under the present system, wealthy and "property rich" districts,
4 specifically those areas with commercial property and other entities
5 with high assessments, have a tremendous advantage over underprivileged
6 and "property poor" districts. In some districts, state aid constitutes
7 less than ten percent of the school budget. This occurs because these
8 localities have the ability to raise property taxes without unduly
9 burdening the community.
10 The legislature also finds that continued reliance on the property tax
11 has contributed to legal challenges to the state education system as a
12 whole.
13 The legislature finds that a tax scaled to income would be a fairer
14 and more progressive form of taxation under which residents would be
15 taxed based on their ability to pay.
16 Therefore, the legislature declares that the property tax, as a means
17 to fund education, contains gross inequities and that a potentially
18 fairer system, in income-tax surcharge, is worthy of study.
19 § 2. The New York State department of education and the state board of
20 real property services are hereby authorized and directed to assist the
21 New York State department of taxation and finance in preparing a compre-
22 hensive study documenting the fiscal implications of authorizing the
23 reduction of real property taxes levied for the purpose of funding
24 education costs through granting local school districts the option to
25 implement an income tax surcharge.
26 Such study shall consider the fiscal impacts on a broad spectrum of
27 incomes, as well as calculate the effects of any state income tax
28 reductions on tax receipts under such a surcharge. Such study shall also
29 consider what level of surcharge would have to be imposed to bring about
30 a dramatic reduction in the property tax. This study shall also document
31 the effects of such a change on school districts, taking into account
32 their relative wealth in terms of residents' income, property tax base,
33 level of state education funding and other relevant factors. In addi-
34 tion, such study shall be so designed as to enable individual taxpayers
35 to determine the effects of any change on their income tax and property
36 tax liabilities. The results of such study shall be submitted to the
37 legislature no later than one year following the effective date of this
38 act.
39 § 3. This act shall take effect immediately and shall remain in effect
40 until the ninetieth day after submission of the report specified in
41 section two of this act, when upon such date it shall be deemed
42 repealed.
