While he carefully avoids a flat rejection of the idea, Assembly Speaker Sheldon Silver has been expressing doubts about Governor Eliot Spitzer’s proposal for a cap on school property taxes.

As reported in today’s Schenectady Daily Gazette:

Silver, D-Manhattan, told a state Conference of Mayors meeting that Gov. Eliot Spitzer’s proposed state budget is a good start, but the Assembly majority has concerns about it. “High among those concerns,” he said, “is the governor’s proposal for a property tax cap.”

Silver said he is worried about the cap limiting revenues needed for important goals such as universal pre-kindergarten programs and reducing class size, and making good on the state’s commitment to fund the settlement of a lawsuit mandating increases in funding for New York City schools.

Silver also expressed concerns about caps limiting revenue for other worthy government programs helping the poor, sick and elderly, and wondered where the state would find extra money if a commission appointed by Spitzer to study the issue just proposes shifting costs to the state.

But such concerns were nowhere in evidence when a sweeping proposal to tightly cap annual growth in all local property taxes in New York was first introduced in the Legislature —by none other than Assembly Speaker Sheldon Silver.

It was 1995, and legislative Democrats were resisting a huge cut in state personal income taxes proposed by newly elected Republican governor, George Pataki.  One of the arguments used by Silver and other income tax cut critics was that it would result in a “tax shift” from the state to the local level.  To prevent this from happening, Silver proposed the Real Property Tax Limitation Act (A.6171 of 1995-96).

As explained in this press release issued by the speaker’s office on March 14, 1995, the bill “would allow local revenues from the real property tax to grow at no faster than the annual inflation rate as reflected in the Consumer Price Index.”  The bill hinged on a maintenance-of-effort provision: the cap would remain in effect only as long as state aid was not reduced.  Local government officials could vote to exceed the limit, but only in “extraordinary circumstances” after a public hearing, the speaker said.

The property tax cap was passed by the Assembly but was never taken up by the Republican Senate majority.

Two years later, Pataki proposed an inflation-linked annual cap on school property tax levies as part of his original STAR (School Tax Relief) plan.  In the face of strong opposition from the statewide teachers’ union, New York State United Teachers (NYSUT), the governor stripped the cap provision from the bill before it was enacted.  His subsequent, half-hearted attempts to resurrect the cap proposal in different forms were rejected out of hand in the Legislature.

Spitzer has now assigned a special commission headed by Nassau County Executive Thomas Suozzi, to recommend a cap on school property taxes and to study other property tax and local finance issues.

About the Author

Tim Hoefer

Tim Hoefer is president & CEO of the Empire Center for Public Policy.

Read more by Tim Hoefer

You may also like

Budget Deal Slows Medicaid Growth But Plants Seeds for Future Spending

The growth of New York's Medicaid spending is projected to slow but not stop as Governor Hochul and the Legislature effectively split their differences over health care in the newly enacted state budget. Read More

Albany Lawmakers Push a $4 Billion Tax on Health Insurance

Legislative leaders are proposing an additional $4 billion tax on health insurance plans in the upcoming state budget – but withholding specifics of how it would work. Read More

As migrants flow to NY, so does red ink 

The influx of foreign migrants to New York could cost the state $4.5 billion more than expected next year, Governor Hochul today warned.  Read More

The Bill Arrives: NY Faces $9B Budget Gap Next Year 

New York’s outyear budget gaps, the shortfall between planned state expenses and state tax receipts over the next three years, has exploded to more than $36 billion, just-released documents show.  Read More

NY school spending again led US, hitting all-time high in 2020-21

Public elementary and secondary school spending in New York rose to $26,571 per pupil in 2020-21, according to the latest Census Bureau data Read More

A Tale of Two Levies

New York school districts are getting record levels of state aid. But how many are using it to cut taxes? Read More

Albany’s Belated Budget Binge 

State lawmakers have begun passing the bills necessary to implement the state budget for the fiscal year that began April 1. Read More

Courts set a limit on NY’s tax reach

Just in time for tax season, New York State's tax agency just lost a major legal challenge to its policy of pursuing maximum income tax payments from wealthy vacation homeowners—even when they live elsewhere. Read More