This past week there were two legislative actions aimed at correcting the property tax problem in New York. While both offer interesting perspectives, both miss the mark. You see, there are reforms that get to the root cause of the issue and then there are reforms such as those from last week. Those that simply move the pieces around in hope that we don’t notice. What do I mean by that? Let me explain.
The Governor introduced a program bill that would both cap state spending and put in a property tax cap. That sounds like a great idea, but there are two flaws. The first: the Governor has proposed a cap on current spending, which we would argue is already far too high. That’s why we proposed that state spending be reduced to $109B by 2015. The second issue is that his property tax cap is based at 4% or 120% of the consumer price index (CPI). While 4% is predictable, it is, like the state spending cap, simply too high. We cannot continue to keep spending and taxes high.
The other was a bill introduced by Sen. Klein that offered a few things. First, it reinstated the STAR rebate program. Now many will see that as a good thing, as something that they are getting back from a state that otherwise takes so much. Problem is, the rebate was tied to a circuit-breaker process. What is that? Essentially it means that you’d pay property taxes equivalent to your earnings. Again, that isn’t a solution. All it does is move the total property tax bill around, so ultimately some of us will end up paying more. Not everyone will get the rebate check, and those that don’t could face higher property taxes overall.
So what is the solution? We need to simply look to the East at what Massachusetts did just a few years ago. At the time, that state was ranked 3rd in the country for property tax rates and facing serious issues. What did they do? Their government passed a program called Massachusetts 2.5. It capped both school and property taxes at a maximum of 2.5% annually, removed some mandated expenses, and allowed for referendums should a community or school need a one-year increase for special projects, etc.
What happened? Massachusetts now ranks 33rd in property taxes. At the time, many that said such a plan would hurt schools and hurt the kids. In fact, graduation rates have increased.
We at Unshackle Upstate appreciate elected officials taking on the critical issue of property taxes. But if we are going to do it, let’s do it the right way. Let’s look to the East and follow Massachusetts’ plan.