The property tax issue is nothing new to any of us. Today we share with you an editorial from The Buffalo News about the success of the property tax cap in Massachusetts.
Massachusetts went from having the 3rd highest property taxes in the nation to the 33rd, what was their secret?
A Tax Cap That Works
Based on past practice, New York’s special-interest groups will unleash a campaign against the 2 percent property tax cap as the proposal gains steam in Albany. Taxpayers will hear warnings about the dangers a cap imposes on schools, police, fire protection and myriad services. But a tax cap will not thrust New York into uncharted territory. The Massachusetts experience shows that New York, too, can undo its image as a high-taxed state unfriendly to business and its own residents.
Massachusetts was known as Taxachusetts when its voters in 1980 approved a proposition to limit tax levies to 2.5 percent growth each year. Since the limit took effect, per capita residential and commercial real estate taxes have gone up 23 percent there when adjusted for inflation. In New York, they have gone up 53 percent, according to the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution.
Now real estate agents in the western fringes of Massachusetts are luring home buyers from the eastern reaches of New York by heralding the wide gulf in tax burdens. In his analysis of property taxes in the two states, our state government correspondent, Tom Precious, found a$600,000 home in Massachusetts requiring about $4,500 in annual property taxes. The tax bill would be twice as much on a home worth half as much in nearby Albany, Precious reports.
The Massachusetts law has flexibility. The cap applies to the amount a community can add to its annual property tax levy, excluding new construction that has just gone onto the rolls. It doesn’t mean an individual property tax bill can’t increase more than 2.5 percent with revaluation. Debt for new construction, like a new wing on a school, is exempt from the tax-increase calculation. The proposition approved in 1980 also let voters suspend the cap in special circumstances. They have done so more than 3,000 times since then, mostly in wealthier communities.
The Massachusetts cap also appears to have sparked fire agencies and school districts to merge, and assorted local governments to consolidate or share services. In New York, local governments only nibble around the edges when it comes to sharing services, and outright mergers are rare.
The Massachusetts experience required care. In bridling property taxes, Massachusetts also ramped up the financial aid it sends local governments. “Without that local aid from the state, the municipalities would have collapsed,” said Andrew Bagley, research director at the nonpartisan Massachusetts Taxpayers Association.
After 30 years, the Massachusetts experience has produced results that look extraordinarily good from this side of the border. Massachusetts used to be neck and neck with New York when the highest taxed states were ranked. By 2008, Massachusetts was at number 23. The state spends $3,000 a year less per pupil than New York spends on public education but gets better results on standardized tests. The nonpartisan Tax Foundation last month ranked New York 50th in the nation, or worst, in the tax burden it places on businesses. Massachusetts ranked 32nd. And Carl Bradford, the owner of a$600,000 house in West Stockbridge, Mass., says the thought of retiring elsewhere to escape his property tax bill never occurred to him. “I can’t remember the last time I talked about anyone’s property taxes,”he said.
A tax cap in New York need not be a scary idea for public employees and parents of children in public schools. Other states have gone down this road, and other states tax less and spend less than New York. Yet the sky has not fallen in those states. Chaos does not reign. New York can tax and spend far less than now, and life will not only go on, it will get better.
-Buffalo News editorial
Well, ladies and gentlemen – there you have it! Let your Assemblymember know we need a 2-percent property tax cap now. Massachusetts got their state back, New York State can too.