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Calling it the “major problem facing the state,” Governor Cuomo announced a plan to reduce New York’s  highest in the nation rate of property taxes for some homeowners. But the program was not received with open arms by everyone.

Under Cuomo’s proposal, homeowners who pay 6 percent or more of their annual paychecks in taxes, will get a credit on their tax bills. Renters will also receive an equivalent credit.

The governor says the state’s consistently high property taxes are driving young people and businesses away, and reducing those taxes will be top on his agenda in 2015.

“This is probably the single most important challenge that we’re facing, economically, as a state,” Cuomo said.

The plan is what’s known as a “circuit breaker,” and has been favored in the past by Democrats and progressive groups. Those deemed to be paying too much in taxes relative to their income will get a tax credit of up to $2,000, though the governor’s office says the average rebate will be around $950.  The program would be offered to lower income people, as well as the majority of the middle class, with the income limit set at $250,000 a year.

Cuomo chose to make his announcement on Long Island, where property taxes are among the highest in the nation.

“Downstate, in absolute dollars, you have the highest taxed counties in the United States,” the governor said.

But he says upstate, where homes are worth less and incomes are lower, some pay proportionately even more.

“Upstate, as percentage of home value, you have the highest property taxes in the United States,” Cuomo said.

The program is a continuation of policies begun four years ago. The governor convinced the legislature to enact a 2 percent per year property tax cap in 2011. Last year, he began a complicated system that led, in some cases, to a property tax freeze.

The proposal immediately drew criticism. E.J. McMahon, with the fiscally conservative think tank The Empire Center for Public Policy, says the tax credit amounts to a subsidy, and provides no incentive for localities and schools to cut expenses to bring their tax rates down.

“It’s a fairly expensive way, from a state budget standpoint, to basically redistribute some of the property tax burden, without actually reducing it,” McMahon said.

He says New York for years has had a similar, larger program in place, known as School Tax Assessment Relief (STAR), which subsidizes school taxes for those making up to half a million dollars a year. During the life of that program, school property taxes have gone up.

McMahon says the governor would be better off focusing on reducing costly state mandates that drive up taxes in the first place.

The governor’s plan was also panned by the business group Unshackle Upstate, which said it “misses the mark.”

Senate GOP Leader Dean Skelos says, in a statement, that he’ll seek a bigger tax relief package, saying “all middle-income families in every region of the state” should get relief.

Cuomo, speaking with reporters afterward, put the responsibility back on local governments and schools, saying it’s up to them to cut back.

“I’m basically saying you have to find efficiencies and economies of scale,” said Cuomo who said the local governments and schools “use the taxpayers as a piggy bank.”

Questions remain about the governor’s plan. Cuomo did not say how he would pay for the $1.66 billion dollar program. He’ll likely give out those details as part of joint budget address and State of the State speech on Jan. 21.

© 2015 New York Public Radio

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