Property Tax Issue is Coming Down the Pike

When I ran.... (0.00 / 0)

....this is all anyone wanted to talk about.

Doorstep after doorstep, I had the same property tax conversation.

We've got some work ahead of us.

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by: NYBri @ Mon Feb 26, 2007 at 20:08:39 PM UTC

property taxes were by far (0.00 / 0)

the number one thing people talked about in the Johnson race.

It's definitely time to fix property taxes by making them more progressive.

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by: SteveWFP @ Mon Feb 26, 2007 at 21:44:03 PM UTC

[ Parent ]

Great post (4.00 / 1)

Converting property taxes to income taxes - what a revelation it would be if the New York tax revolt turned out to be not a disaster, but a great progressive victory!

What are they smoking? Find out at alien & sedition.

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by: BrooklynRaider @ Mon Feb 26, 2007 at 21:02:58 PM UTC

Clarification (4.00 / 1)

The Gov's. proposed budget doesn't increase rebates Bri.  In fact, it does away with rebates altogether.  Instead, he would jack up the value of the current STAR exemption by varying degrees over the next three years depending on income levels (for all but the wealthiest NYers, who would continue to receive only the existing STAR exemption).

It's the Senate majority conference that wants to triple the existing rebate checks this year, and then quadruple them next year -- regardless of an owners' income.

Also, I don't know how folks keep characterizing the property tax as regressive when it is based upon property value.  While there are exceptions, especially involving seniors, you have to admit there is some correlation between owners' income levels and property values.  To the extent that correlation is positive, and as long as higher value homes are paying more than lower value homes, it's not accurate to call the property tax regressive. 

Moreover, the existing STAR exemption, with its fixed level of benefit within a given school district segment, is worth way more to a person in a low value home than one in a mansion.  Isn't that a progressive tax policy?

While it's true an income tax would probably be fairer, it doesn't necessarily follow that it would be any less onerous on the bulk of the working population.

There are no easy answers here folks, or you can bet the pols would have already done something.

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by: teaparty2 @ Mon Feb 26, 2007 at 22:08:10 PM UTC

They now call it Starkenstein. (0.00 / 0)

The higher the property values, the greater the Star Aid communities receive from the State. Ironic that wealthy  communities get more Star money than the communities that need it. This is illustrated by the Star rebate (buy your vote). Some wealthier Westchester County residents received $900 or more while other counties' residents receive a couple of hundred at best.

There is also a question of fairness. While the Spitzer proposal does attempt to make the funding formal simplier, it is still based on local property values, instead of Statewide funding mechanism; the arguement has been you can't trust the State. But with all the education mandates, as my friend NYBri put it, the only local control that really exists is the right to collect your taxes.

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by: glevine @ Mon Feb 26, 2007 at 23:09:21 PM UTC

[ Parent ]

I challenge ANYONE... (0.00 / 0)

...to explain the education funding formulas...

Is there such a person who can do it?

We've got some work ahead of us.

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by: NYBri @ Mon Feb 26, 2007 at 23:24:43 PM UTC

[ Parent ]

Our state aid vs. local taxes have "flipped" (0.00 / 0)

over the last 15-20 years. We used to get more than 60 percent  from the state and 40 percent locally. Now we raise more then 60 percent locally.

Rather than playing games, they could re-think how state aid is figured. It is a convoluted mess right now.

The feds should pony up the money for their mandates as well.


What a long, strange trip it's been.

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by: LuLu @ Mon Feb 26, 2007 at 23:00:44 PM UTC

The Feds are MIA on Education Funding (0.00 / 0)

From the standpoint of other industrialized nations, we've got it backwards when it comes to funding education.  Education is a national priority in most nations, and accordingly school funding flows from national sources.  Last time I looked at the data, the feds were contributing only about 5 percent of the cost of an education in NY... what's wrong with this picture??? 

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by: teaparty2 @ Tue Feb 27, 2007 at 01:56:27 AM UTC

[ Parent ]

Assertion, Question, and Comments...Oh My! (0.00 / 0)

Assertion:

NYBRI - your statement in the posting is "A one-house bill, presented by Senator Steve Saland at the very last minute in June, 2006, seems to be a procedural nightmare masquerading as legislation." You take a shot at Saland with "last minute, June, 2006" and "nigthmare masquerading as legislation." Moreover, you say nothing has been done yet to fix the problem.

Starting with the second issue that nothing has been done yet. In all of the legislators' defenses the new session is fairly young. Even if they were all on the same page things take time. Now dealing with the first part, I don't know the legislation or when it was introduced, but your position is is clear. You don't agree with it. This leads to the question.

Question:

If the legislation is a nightmare and you don't agree with it, I assume you understand it. Can you explain it to us so we can  make informed decisions as well. Yes, we could try to figure it out ourselves (we are grown men and women), but why re-create the wheel. Please explain why it is so bad or better yet just explain the legislation. Even procedural nightmares can be fruitful. Procedure and results are two different issues.

Now for the comment:

I agree with you that increasing Star is not the answer, but I am concerned (and admittedly not completely grasping all the pieces of all the sub issues)about an income based property tax. Once the population gets older in a given school district if income is the basis for property tax and school funding, won't the districts suffer that have older populations? How can that work? Moreover, what is middle class and who will benefit? $150K a year in North Carolina may be a lot, but for a Rockland family of four or five or Westchester family who pays crazy $ for a 2,200 square foot house on .2 acres, pays to commute everyday, etc., $150K or even more is not "wealthy" (it is not poor either).

More comments - I read the article and I noticed the assembly has not passed any related legislation. This, in my view (and probably some others as well), is the fact that NYC dems run the show in the assmebly...and their constituency doesn't care about this issue (same constiuents that support the NYC Dem senators). How can you pressure them to change if the issue does not resonate with their voters?

What they would care about is the CFE, because that impacts them. While I agree that funding in general needs to change and NYC does need funding (although I do disagree with the proposition that any judiciary can legislate an amount of $ - they are the judiciary not the exec or leg branch), I don't know how or where this $ is going to come from. The "state" I guess, but I am and you are and we all are the "state." If more funding for non NYC schools will ultimately be more $ from the state and the CFE is coming from the state who is going to shoulder this burden? What program are we going to complain about that get cut? No matter how much the surplus today, the money has to come from somewhere. So, what happens? Do we thank the folks in Albany for fixing property taxes outside NYC while they take it from us via other taxes or cutting other programs?

Lastly, I'm rolling now, if NYC needs the CFE $ then why is Bloomberg offering/proposing a tax rebate (which I understand are relatively small). If you have the kind of surplus that could make a difference (which I guess is any surplus) then don't give some BS rebate, use it on education or whatever it might be.

So, I rant, it was fun. No comments on spelling or grammar please ;)

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by: axtimmons @ Tue Feb 27, 2007 at 03:07:50 AM UTC

sure (0.00 / 0)

If the legislation is a nightmare and you don't agree with it, I assume you understand it. Can you explain it to us so we can  make informed decisions as well. Yes, we could try to figure it out ourselves (we are grown men and women), but why re-create the wheel. Please explain why it is so bad or better yet just explain the legislation. Even procedural nightmares can be fruitful. Procedure and results are two different issues.

Read the bottom of the post where I say:

Look for another diary that investigates this all important issue in detail later this week.

We've got some work ahead of us.

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by: NYBri @ Tue Feb 27, 2007 at 16:43:11 PM UTC

[ Parent ]

On second thought... (0.00 / 0)

...let me give you a taste of the "procedural nightmare."

According to the Saland bill which was passed in June, 2006, the last day possible for bills to be presented, with no warning to the minority that it was coming and with no public debate or hearings or even meetings of the Senate Education Committee:

- IF a school district wants to move away from a property tax funding formula for its education, the board must be petitioned and if approved, a referendum will go on the ballot...THEN if that passes, it goes back to the school board for approval...THEN if the school board approves, the state would pay for 25% of the budget the first year and 25% for each subsequent years...so the process would take 5 years to enact.

- Now imagine the administration and budget accounting processes that would be necessary to keep track of 700 school districts across the state and where they are in the process and how much state money goes where. You think the funding formulas are confusing now!

- The bill also doesn't call for eliminating commercial or farming or renting property taxes, to they would still pay, probably a larger sum than they pay now. Now THAT's good for economic growth and job creation.

- The bill spell out NO WAY FOR THE STATE TO PAY for the increased bill...some 20 billion, some estimates say.

This three page bill smacks of political expediency and wasn't a serious attempt at solving the problem. Obviously, polls were showing that the Republican Senate was vulnerable on this issue so they tossed some mess of bill out there at the absolute last minute with no debate, no warning and surprised everyone just to say they did something.

Yes, it is a complex problem, but one that Connecticut and New Jersey have taken on.

You see, right now we have a flat income tax in New York. If you make as a couple $40k a year you pay 6.875% rate. If you amke $40 billion a year as a couple you pay, you guessed it, 6.875%. Flat tax.

If we go to a more progressive income tax we can raise the cash to have state funding pay for education. Also, everyone would have their property tax bill almost elimated.

Yes it is complicated...but what we have now is unsustainable. STAR isn't working. The formulas aren't working. No one can understand it.

Let's really talk about this. It's important.

We've got some work ahead of us.

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by: NYBri @ Tue Feb 27, 2007 at 17:30:55 PM UTC

[ Parent ]

If Spitzer and the Democrats (0.00 / 0)

can find a way to shift much or all of the school tax burden to the state, they will be political heroes for a generation.

But raising state taxes to lower local taxes will not change the basic fact that NY is the highest-taxed state in the nation.

The extent to which the state can tax NYC millionaires more is limited, while the steady increase in school expenses does not seem to be so limited.

But politicians, who are well aware of what NYBri found at the doors, have to do something.

They will, but it won't change the state/local tax bottom line for most people by any appreciable measure.

Alas.

 

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by: devtob @ Wed Feb 28, 2007 at 01:01:54 AM UTC

STAR (4.00 / 1)

STAR has done little to reduce or even keep school property taxes in check (they continue to rise faster than inflation). In fact, a Comptroller's report made it clear that STAR has actually encouraged faster school spending growth by hiding the increases from homeowners. 

Make no mistake; STAR represents a tax shift, not tax relief. A program that subsidizes local school taxes with state funding is merely a transfer of tax burden, not a tax cut.

According to a study from the Maxwell School at Syracuse University, school districts actually have raised taxes under STAR more than they would have otherwise, offsetting about one-third of the savings.  Moreover, owners of apartment buildings and commercial and industrial properties aren't eligible for STAR.

Instead of an expansion of the STAR program, New York homeowners deserve structural changes and systemic reforms for the property tax problem.  Systemic reforms address the root causes of the property tax problem, they're not band-aid fixes like STAR that mask the fundamental problems contributing to perennial property tax increases.  (Also, they're not fundamental moves to change the funding source to a more broad-based system like income taxes, while ignoring the fact that the real problem is spending.)

We need to realize that spending as much as we possibly can on schools every year is not the way to improve our kids' education. Moreover, we must realize that we'll never --ever-- get property taxes under control unless we first control spending.

We have to reign in school budget increases by reducing spending!  First, we need to eliminate un-funded mandates.  The current structure of un-funded mandates creates a burden on school budgets that continues to grow faster than the tax base. 

Moreover, and most importantly, we must enact provisions to provide homeowners with the ability to cap school budget increases.  Local districts should be precluded from raising their property taxes if they take state STAR money.  We should capp the rate of growth in school property taxes by the lower of 4% or the rate of inflation.  The Senate already included a capping mechanism into their property tax relief proposal -- a similar safeguard should be incorporated into any proposed expansion of the STAR program.

The cure is obvious - tax cuts and tax caps.

CONCLUSION
I want to thank the members of the Legislature for your time today and for your efforts to address New York's onerous tax burden.  We look forward to working with you in the coming year to ensure that the FY 2007-08 budget provides real relief for New York's overburdened taxpayers.

Submitted by:
Matthew F. Guilbault, Esq., Executive Director
New York State Taxpayers Union
Albany, NY
518-605-8100

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by: NYTaxpayersUnion @ Thu Mar 01, 2007 at 17:49:24 PM UTC