| Those following the latest in the property tax saga are familiar with the war of words that erupted today between WPF Chair Dan Cantor, David Paterson, and Tom Suozzi. Adding to the dispute, NYSUT decided to deny their endorsement to any Senator who voted for the property tax cap.
Basically, both sides have good intentions. Paterson and Suozzi know that property taxes in NY are through the roof and are stifling growth and are making in unaffordable for many people to continue to keep living in their homes. WPF and NYSUT rightly argue that schools need more resources and teachers are underpaid when you look at their salaries in the context of the cost of living downstate. Unfortunately, both sides are now digging in their heels and the discourse is taking a nose dive.
In a nutshell, the property tax cap is a very blunt instrument. And I can see why people would be supporting desperate measures in a desperate time. However, the real debate has just become over the pros and cons using a very blunt instrument instead of a discussion of why property taxes are so high outside of NYC in the first place. If the state doesn't address these issues, we are all forced into this paradigm of the false choice between high property taxes vs. education cuts.
There are really two main reasons for high property taxes, and this whole discussion has almost completely ignored both of them:
1) Under state law, the only kind of taxes that municipalities are allowed to raise without the legislature's approval are property taxes. With a framework like this, of course property taxes are through the roof.
Municipalities have to go hat-in-hand to the legislature if they want to raise any other type of tax, like sales or income taxes. To his credit, Assembly Speaker Sheldon Silver has been pushing for raising state income taxes on the highest earners. However, a much more beneficial effect would be obtained just by giving municipalites this power. The only two municipalities in the state with progressive income taxes are NYC and Yonkers- I'm not sure about Yonkers, but I know NYC has significantly lower property tax rates than the rest of the state in part because NYC collects a progressive income tax on its residents. And NYC still has to get the legislature's approval for any adjustments it wants to make to this.
Allowing other municipalities to at least have the option of levying progressive income taxes in lean times would go a long way towards taking the tax burden off of property taxpayers, which is a regressive burden in many ways.
2) The truly redicioulous inefficiency and redundancy that is caused by dividing up municipal services into towns, villages, fire districts, sewer districts, library districts, water districts, ect.. and allowing all of these districts to levy property taxes in the residents in their jurisdiction is essentially just flushing property tax money down the toilet.
The New York State Commission on Local Government Efficiency and Competiveness made an attempt to adress these issues, though in my opinion, it didn't go far enough. Suozzi's property tax commission adopted the NYCLGEC's recommendations in full, but they have essentially been forgotten in this debate since then.
A good way to put this in perspective is to look at it in reverse. I know I might be being a little NYC-centric, but bear with me:
Imagine if tomorrow, the Mayor, City Council, and State Legislature decided to take NYC's Department of Sanitation and divide it into several different sewer districts, each with their own executives and boards making six-figure salaries and maintaining their own parts of sewer infrastructure with little or no coordination with eachother. And then imagine if the same powers decided to break up the 5 boroughs into towns and make each one have their own independent municial govenments. And furthermore, allowed seperate villages to form within the towns and maintain their own seperate snowplowing fleets, police forces, and everything else. Now imagine doing the same process with libraries, fire departments, and all the rest. That would be an absolutely terrible idea. The different property taxes levied on the residents of the former NYC would be through the roof- just like they are everywhere else in NY.
If doing that to NYC is clearly such a terrible idea, then getting rid of all these disparate municipal entities outside of NYC and putting them under wider local government economies of scale, like counties, is clearly a good idea. And this is the type of idea that this debate should be centered around. |
