Property Tax Cap Both Sketchy and Painful
Oswego, NY – Governor Andrew Cuomo won his office with huge voter support for a cap on property taxes, and he says putting it into place is at the top of his agenda.
Government finance expert Robert Ward, deputy director of SUNY's Rockefeller School of Government, says going by Cuomo's statements so far, the property tax cap would apply to the total dollar amount a local government collects-- not to the property tax rate that's applied to assessed values.
"So in other words, the total dollars that the county or municipality or school district could collect in property taxes would not be able to rise more than two percent from one year to the next," Ward says.
"The idea is that over time, peoples' incomes wages, salaries, other incomes would rise enough to offset that two percent a year and that over time, taxes generally would become more affordable. That's the concept," he says.
Ward says there are many things about the concept that remain sketchy, but he says one thing is clear.
"I don't think there's any question there will be fiscal pain if Governor Cuomo achieves anything like what he said he's going to propose," says Ward.
"Of course," he adds, "the legislature, we assume, will look to try to create more room in the tax cap because there are many interest groups that will ask them to do that."
School boards statewide have already voiced opposition to the plan.
Ward says upstate school districts traditionally raise taxes by five to six percent a year, often because they are committed by contracts.
"If you can ratchet that down by a couple of percentage points or in the case of the Cuomo proposal, three to four points, then you are making an enormous difference over time," says Ward.
Local officials say that would force them to slash already thin services unless the tax cap exempts state mandates like employee health care and pensions, or is at least tied to relief from state mandates and regulations.
"Will the state of New York give them greater flexibility in dealing with employee contracts, for example, so that at the same time they're holding down the growth of property tax revenue, they can hold down the growth of expenditures? Because otherwise they will end up borrowing a lot more money, shifting costs forward, or having to slash services to make up the difference," Ward says.
Cuomo is expected to supply at least some more details in his state of the state address. WRVO will have live coverage and analysis of the 2011 State Of The State address beginning at 1:00 p.m. Wednesday.