New York property tax break sought

Circuit breaker would provide refunds to property owners

By FRITZ MAYER

ALBANY, NY — New York politicians for years have complained that soaring property taxes are forcing people out of their homes, and driving them to states such as Pennsylvania, with relatively lower taxes. Critics have charged that a primary reason for high local property taxes is due to unfunded mandates from the state, which force counties and municipalities to provide expensive services, but don’t provide municipalities funds to pay for them.

One way that some lawmakers are attempting to deal with this is with legislation introduced in April called the Property Tax Circuit Breaker bill. It was discussed at a meeting of the Sullivan County Senior Legislative Action Committee on May 29.

The bill would seek to put some of the cost of unfunded mandates back on the state by linking property taxes to the income of the property owner. In other words, if property taxes rose beyond a certain level in relation to a person’s salary, a portion of the tax would be refunded to the taxpayer from the state, whose revenue comes in large part through income taxes.

If, for example, a household income is $100,000 or less, the circuit breaker would kick in once the property tax bill reached nine percent of the income or $9,000. The state would then refund 70 percent of any taxes paid above $9,000.

The way the bill is now structured it would be phased in over four years, and would gradually expand to include households earning up to $250,000.

An additional requirement is that in order to qualify for the tax credit, homeowners would have to live in a house for five years. According to backers of the bill, this residency requirement is necessary to discourage consumers from buying more expensive homes than they would without the circuit breaker.

With the state legislature due to end on June 22, it’s possible that the bill will not be passed in the current session. But “anything is possible,” according to bill-supporter Assemblywoman Aileen Gunther, who said in a phone interview, “I think it’s important that we give some middle-class tax relief in New York State because people are losing their houses, and that’s absolutely true and tragic. At this point, we’re losing our middle class because they can’t afford to live here and they’re leaving the state. It’s a big issue and it’s on everybody’s radar screen. I’m hopeful that if the bill does not pass now, then [it will] at the very beginning of next year.”

Senator John Bonacic also supports the bill. He issued a press release saying, “Circuit breaker is positive in that it links property taxes to income. If you lose your job or see a reduction in income, you would see your property tax bill fall, just like your income tax bill falls if your income is reduced.” The senator added, however, that he would prefer to see a school-tax cap passed in conjunction with the circuit breaker.