NY commission charged with developing property tax cap
Thomas R. Suozzi can understand people's skepticism about a new statewide commission charged with finding a way to cap property taxes. People have every right to be cynical about the lack of political will in Albany to deal with conditions that have made New York's property tax burden the fourth highest in the nation, said Suozzi, the Nassau County executive who was picked in January by Gov. Eliot Spitzer to chair the commission. But while the commission faces "a stark challenge," it's also working at a time when the political climate has changed, Suozzi says. Faced with taxpayer discontent, lawmakers in several states are looking at ways to reduce the property tax burden. The issue can be a difficult and emotional one, because property taxes provide a stable source of revenue for schools and local governments. The issue directly affects education because school district property taxes account for about two-thirds of all property taxes. The commission is supposed to submit an interim report by May 15, with specific legislation that state lawmakers can consider before the end of the session, Suozzi said. While not predicting the commission's recommendations, Suozzi gave some hints about what will be in or out of the May report. Specifically, the commission: (1) will not recommend increasing the state income tax or sales tax to lower property taxes; (2) will have to consider ways to reduce school districts' expenses to make any property tax cap realistic; and (3) will look at the "circuit breaker" idea that would limit what homeowners pay based on income, with the state picking up the remainder of the cost.
One factor motivating the commission's work is the feeling that New York's tax burden has reached the breaking point. Much of this pressure comes from the state's business community, which argues that high taxes are making it impossible for the state to be competitive in attracting and retaining businesses. But anger about property taxes extends beyond New York. In January, voters in Florida, by a margin of 64% to 36%, approved a constitutional amendment that doubles the existing property tax exemption for homeowners and allows homeowners to carry existing tax breaks with them to a new home. Georgia and Indiana lawmakers also debated proposals to remove funding of schools from property taxes. The discontent provides a real opportunity for Suozzi's commission to make changes in New York, some officials feel. The Business Council of New York State hopes the commission recommends "a hard cap on taxes" that will be tied to the rate of inflation, Kenneth Adams, the group’s president and CEO.
Talk like that worries school officials. They argue any changes must be well thought-out because the property tax provides a substantial, and reliable, source of revenue for schools and local governments. The Proposition 13 tax cap in California did real harm to schools, said Binghamton Superintendent Peggy J. Wozniak, who worked as a school administrator in that state. "There's no black-or-white answer," she said. "You don't want property taxes escalating out of control, but to say there's no more property taxes is too radical. You have to have something in the middle." On the surface, the idea of a tax cap "doesn't seem like the smartest thing to do," Suozzi acknowledged. But the issue of taxes is at the point that "something dramatic has to be done," he said. He's seen a growing recognition of the problem from all sides in the debate. "No one is saying with a straight face that property taxes are not a problem," he said. But the commission faces a hard job in coming up with a set of recommendations that will win broad support. The state Legislature has to approve changes, and Albany interest groups—including the powerful New York State United Teachers—have already lined up to question the tax cap idea. While acknowledging the skepticism, Suozzi said some groups, such as the New York State School Boards Association, have been "more nuanced" in their comments about the commission and are waiting to see its proposals. Interest groups that simply act as carping critics run the risk of a public backlash, he said. "I believe strongly in quality education. But the school-based establishment has lost a lot of support because everybody is so focused on the property taxes that they're not talking about quality education," Suozzi said.
Source: Binghamton Press & Sun-Bulletin, 3/9/08, By George Baster
[Editor’s Note: Past reports and updates from the debates in Florida and Georgia are below. While property taxes are tapped out in many communities—a phenomenon not unrelated to the extent to which federal and state enthusiasm for issuing education decrees exceeds federal and state enthusiasm for providing funding—they are a more stable revenue source than most of the alternatives. Depending on state law, they also can help preserve more school funding and local discretion than increased dependence on state sources that compete with so many other priorities. Proposition 13 arguably provides the most compelling cautionary tale. See the last link.]
NSBA School Law pages on Florida debate
Sarasota Herald Tribune, 3/19/08, By Anna Scott
NSBA School Law pages on Georgia debate
Atlanta Journal-Constitution, 3/18/08, By James Salzer
Education Week, 1/6/05, By Joetta L. Sack