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December 28, 2014
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Will the governor’s property tax reform really work?

By Ken Hilton
April 30, 2014

Our new New York State (NYS) budget includes an interesting section that Gov. Cuomo believes will lessen our local property tax burden. It builds upon the 2% property tax cap enacted back in 2011 that requires local governments to cap annual tax rate increases at 2% or the rate of inflation, whichever was less. It further stipulated that any proposed taxation above the cap needed a 60% supermajority approval by voters. Now, the 2015 state budget calls for a two-year freeze of residential property taxes for homeowners in jurisdictions that keep their tax increase under the 2% tax cap. In the first year, property owners will receive tax rebate checks from the state equal to their property tax bill increase. In the second year, tax rebate checks will go to the property owners again, but only if their local governments take “meaningful concrete steps toward finding permanent structural savings by sharing services with other jurisdictions or by consolidating [local] governments in their entirety.”

So, does this plan have merit?

Politically, it clearly has merit, especially for Gov. Cuomo and state legislators. This “incentive” (some might say “bribe”) will almost force local government officials to stay within the 2% tax cap. And the resulting tax rebate checks from New York State will, no doubt, be mailed to homeowners in the autumn, just prior to Election Day, reminding voters who to reward.

But will the new tax freeze have its intended effect, lowering our burdensome local property taxes? It certainly will help some, though it’s clearly no panacea. Hopefully, it will force local governments and school districts to take those meaningful steps to find permanent structural savings. Do we, for instance, really need to have 22 assessors serving a county population of 75,000? The Town of Henrietta, NY has a population of almost 50,000 with much more commercial and residential development than we have, and yet it functions with a single assessor. And we’ve already learned that we don’t need 44 full-time employees in the business offices of our eight school districts. A 2008 study showed how single districts, serving the same student population that our eight districts served, were able to function with fewer than 10 employees in their business offices, and county school boards voted to establish a common central business office to serve the county’s districts (and now several others). As a result, districts were able to eliminate many of those 44 positions, saving over $1 million for taxpayers. These kinds of “structural savings” are desperately needed if we hope to rein in the cost of local government.