In a Long Island speech yesterday, Governor Eliot Spitzer suggested for the first time that he might be willing to consider a state-imposed cap on property taxes. If the governor is serious, it could be a turning point for heavily burdened New York property owners.
Instead of permanently cutting tax rates, New York state is borrowing a gimmick retailers use to avoid cutting prices: the mail-in rebate. The Department of Taxation and Finance is inviting homeowners to apply for a property tax discount.
In my testimony today, I will not attempt to delve into the many issues surrounding the administration of the real property tax in New York. As this committee's other witnesses will attest, New York's current patchwork approach is both unfair and inefficient. The reliance on numerous local assessment districts, and the lack of a single assessment standard linked to a regular reassessment cycle, are glaring shortcomings of the system as it now exists.
Gov. Spitzer's proposed budget "sends the wrong signal to firms that might otherwise consider investing or expanding in our state" by raising taxes on some large corporations, E.J. McMahon of the Empire Center for Public Policy said in testimony before the Legislature's joint fiscal committees.
Notwithstanding the headlines generated by Gov. Eliot Spitzer's State of the State address, it takes some creative arithmetic to call the new governor's property tax initiative a "$6 billion tax cut." In fact, strictly speaking, Spitzer isn't proposing a tax cut so much as a tax shift.
When it comes to reducing property taxes, New York's two leading gubernatorial candidates are hitching their wagons to George Pataki's STAR.
New York state's 2006-07 budget features a record $1.3 billion increase in support for K-12 public education. State school aid is up 8 percent from the previous year, boosting the total to an all-time high of $17.6 billion.
With school property taxes continuing to rise across New York State, Albany's leading Republicans are pushing for a major expansion of the STAR (School Tax Relief) program in the next state budget. But more STAR spending will do nothing to reduce New York's oppressive state and local tax burden. Instead, it will promote faster growth in school spending and property tax levies unless it is tied to a firm cap on school district budgets or taxes.