Municipalities and workers seek changes to the property tax cap

Jun 18, 2015

Leaders of all of the state’s local governments, as well as unions representing teachers and public workers, are warning state lawmakers not to simply renew the state’s property tax cap without some changes.

The 2 percent per year property tax cap does not technically expire until next year, but leaders of cities, towns, and counties, as well as teachers and public worker unions say they fear an early renewal of the law might be part of any end-of-session deal. The tax cap is linked to continuation of New York City’s rent laws, which have expired but will likely be renewed by the end of the week.

David Little, with the Rural Schools Association, is among those urging lawmakers to take a breath.

“Let’s wait until you’ve had an opportunity to do an exhaustive evaluation,,” Little said. “And then let’s move forward in a way that’s helpful, not destructive.”

Anne Pope, with the NAACP, says the cap unfairly hurts poor and minority school children. She says the state is already ignoring a court order that calls for spending billions more dollars on struggling schools.

“How can schools continue to serve some of our neediest children with a tax cap that limits what they can raise to support our kids?” Pope asked.

Steve Aquario, with the New York State Association of Counties, says capital projects and infrastructure improvement costs should not be counted in the cap going forward.

“This will position New York state to repair it’s roads , its bridges, it’s water needs,” said Aquario, who said the economic resurgence has led to a need for more building. .

The groups also want the cap to be tied more closely to the rate of inflation, if inflation rises beyond 2 percent per year. They think schools should be permitted to increase their tax rate if there’s a large influx of children. And they want the requirement that a supermajority of 60 percent is needed to override the cap, be changed to a simple majority.

But E.J. McMahon, president of the fiscally conservative think tank the Empire Center, says the only outcome of a modified property tax cap is higher taxes. 

“What they are essentially are demanding is that we want to raise taxes higher faster,” McMahon said.

McMahon says that it’s not that difficult for local government to override the cap. A 60 percent vote of a town or county board or city council is needed. He says most local governments have a large majority of representatives of the same political party, who are more persuadable to vote as a block.

Schools require a supermajority of 60 percent of voters to override the tax cap. McMahon says that’s harder, but he says it encourages school administrators and school boards to make a better case if they want to raise taxes beyond the 2 percent cap.  He says the cap is working and it should be made permanent.

“If we can just continue it for  the next 10 to 20 years we will really have a significant relative decline in the tax burden, “ McMahon said. “For the first time in the whole post-war era.”

Republicans in the state Senate want to make the tax cap permanent, and Gov. Andrew Cuomo has said he would go along with that. Business groups, including Unshackle Upstate, are also backers, saying the three-year-old cap has already saved taxpayers an estimated $7.6 billion, if the average rate of yearly spending increases before the recession had continued.

Assembly Democrats have not yet agreed to any extensions of the tax cap.

The cap is very popular among voters, with polls consistently showing wide support.