Governor David Paterson began his tenure in the spring of 2008 on a promising note by embracing a broad, no-exceptions cap on school property taxes, almost exactly as proposed by the Suozzi Commission on Real Property Tax Relief.  But when the Senate actually passed his bill a few months later, he backed off and dropped the issue.

Last year, Paterson quietly reintroduced the cap — but added a massive exception that would destroy its effectiveness.  A few months later, he switched gears and began advocating a property tax circuit breaker–i.e., no limit on property tax levies, but subsidized tax credits for some homeowners.  The circuit breaker would begin flowing if the state budget ended a year in surplus under a separately proposed statutory spending cap.  This byzantine proposal has attracted no interest in the Legislature.

Today, the governor backed even further away from the property tax cap recommended by the Suozzi Commission.  His latest tax cap proposal would extend to all local governments, but adds a further carve-out that makes the exercise virtually pointless.

The governor’s office did not immediately release the details of the tax cap bill.  But buried at the bottom of his news release is this passage:

This (property tax) cap would provide immediate relief to all taxpayers. At the same time, this bill would protect critical municipal services by allowing local government officials to override the cap with a two-thirds vote of a local government’s governing body when circumstances demand an additional tax levy. [emphasis added]

The original, Massachusetts-style school property tax cap recommended by the Suozzi Commission could be overridden only by taxpayers in a district-wide referendum.  This new version of the cap could be overridden by the elected officials who set the tax rate, such as school board members, if they decide (in the words of the governor’s release) that “circumstances demand” it.  Which means that, in the vast majority of cases, it would not actually cap anything.

At this point, why does Paterson even bother?  Tax cap advocates will see through this, and the teacher unions and local government groups will continue to oppose any kind of cap, no matter how porous.

The press release announcing the governor’s latest property tax cap brainstorm actually led with another proposal — a constitutional amendment to cap state spending.   A constitutional cap would certainly be more meaningful than the statutory cap Paterson first proposed last year.  But talking about inflation-based budget caps at a time when spending needs to be reduced is beside the point.

Constitutional amendments are submitted to the state’s voters for ratification only after passage by two consecutively elected Legislatures, which means the governor’s spending cap would have to be approved this year and next, when Paterson will have left office.

But Paterson already has the constitutional power to veto any line-item of spending added to his budget by the Legislature.  The closely divided Senate is incapable of mustering a two-thirds override vote, which means Paterson could make any veto stick.  At this late date, he has sent the Legislature no signals on whether he intends to use the power he already has.  Indeed, one reason state spending continued soaring beyond affordable levels in 2009-10 is that Paterson was unwilling to use his veto last year.  Instead, he agreed to a budget that boosted state funds spending by 8 percent (counting temporary stimulus funds) and complimented the Legislature for joining him in making “difficult choices.”

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

A Federal Emergency Rule Is Inflating New York’s Medicaid Enrollment

Strings attached to federal coronavirus relief funding appear to be inflating New York's Medicaid enrollment – and costs – at a time when the state faces unprecedented deficits. Read More

New York Medicaid Spending Is Projected to Jump 6% in Fiscal Year 2021 (UPDATED)

Despite a round of cost-cutting this spring, New York's Medicaid spending is on track to jump by 6 percent this year thanks to a massive influx of federal aid. Read More

New York Has Widened Its Lead in Per-Capita Spending on Medicaid

New York's per-capita Medicaid spending soared to more than double the nationwide rate in 2018, widening its gap with the other 49 states. Read More

New York’s Medicaid Enrollment Surges to an All-Time High

New York's Medicaid program is growing at its fastest rate in six years, with a quarter-million additional enrollees landing in the safety-net health plan during the first three months of the coronavirus pandemic.  Read More

More fiscal turmoil for Medicaid

In a sign of pandemic-related strain on state finances, the Cuomo administration is postponing a series of multi-billion-dollar Medicaid payments over the next three months. Read More

DOH posts age & county data

#NYCoronavirus: The state Health Department released additional coronavirus data that gives a clearer picture of which counties and age groups have been hardest hit by the pandemic so far. Read More

Winning last year’s battle

The new state budget finally takes credible steps to address the Medicaid crisis of recent history. What's missing is a clear plan for weathering the far larger crisis of the present and future. Read More

Getting real on Medicaid

#NYCoronavirus: As New York State lawmakers debate the Medicaid budget during a public health crisis, here are seven things they should keep in mind. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.