A tax increase is still a tax increase.

I know that seems like a silly sentence, but it’s worth saying during this year of rebates — when we’re being told property tax hikes don’t really count. Of course they do.

Consider Albany, where the budget recently proposed by Mayor Kathy Sheehan includes a 5 percent residential tax hike, but only sort of. That’s because the state will blunt the hike by sending homeowners a check to cover the increase.

Free money!

(But not really.)

This is how it works under a new state program that aims to reward municipalities and school districts which stay within the tax cap. The state will also send rebates next year, so long as the taxing government shows that it has tried to consolidate services.

The problem?

So far, this is only a temporary, two-year program.

That means taxpayers could get walloped when the rebates stop. They could be on the hook for three years of increases, all at once.

For that reason, the head of Albany’s Empire Center for Public Policy compares the rebate program to the Novocaine administered by your favorite dentist: “It’s basically just dulling the pain,” E.J. McMahon said. “But remember how it feels when the Novocaine wears off.”

Ouch.

Meanwhile, our property tax system grows more complicated as this new program combines with longstanding STAR rebates — and as New York continues to shift local tax burdens to the state tax base.

Gov. Andrew Cuomo glowingly proclaims that the new program “freezes” taxes. That’s nonsense. It doesn’t freeze anything. It just shifts which pot of taxpayer money is paying for continued increases.

The real solution, of course, is cutting state mandates and local spending. But that’s too difficult. So we get phony solutions instead.

Anyway, from the perspective of the average Albany homeowner, the important thing is this: Residential taxes are going in the wrong direction and outpacing the rate of inflation. That’s more than unfortunate, because high property taxes are driving families from the city — or keeping those of us who’d like to live in Albany from buying there in the first place.

People increasingly want to live within Albany’s borders. But too many people can’t or won’t pay the taxes, and that’s stalling the city’s progress.

Sheehan is aware of the problem, of course. “We cannot tax ourselves out of the financial position we’re in,” the mayor told me earlier this year. “How can anyone say that there’s room for taxpayers to pay more? There’s not.”

Yet without the state rebate program, taxpayers would be paying more under her first proposed budget.

To be fair, the mayor’s spending plan does make progress. While it increases the tax levy by 1.4 percent and, yes, hikes residential taxes by much more, it actually lowers taxes on commercial property by about 3.6 percent.

(Quick aside: Unlike most places, Albany divides residential and commercial property tax rolls, with rates for each determined by a complex formula. Please don’t ask me to explain it further, because we’ll all die of boredom if I try.)

Sheehan declined to be interviewed for this column. A statement read to me by Dennis Gaffney, the mayor’s new spokesman, didn’t mention that Jerry Jennings fellow by name, but noted in the passive tense that Sheehan “was handed” a $16 million budget deficit and yet still stayed under the tax cap.

“We’re pleased the governor is offering a rebate for homeowners. That helps,” the statement said. “We don’t know what’s going to happen down the road with it, and in the meantime, we’re working hard to grow our tax base.”

To the mayor’s credit, her budget does make politically difficult choices. Most notably, it idles a South End ladder company, even though the city’s firefighter union endorsed Sheehan’s candidacy. It’s a common sense cut that will save $1.2 million in overtime costs, but the emerging uproar — which is being carefully orchestrated to stop the cut — illustrates why it’s nearly impossible to get property taxes in Albany or any other upstate city under control.

By the way, school taxes are also still rising for Albany homeowners. The most recent school budget, which stayed under the tax cap, reduced taxes for commercial properties by 2 percent, but raised residential rates by 3.4 percent.

But don’t forget the free money! In fact, state rebate checks for the school district’s increase should be arriving in mailboxes any day now — just ahead of the November gubernatorial election.

What a remarkable coincidence.

© 2014 Albany Times Union