Supporters of Gov. Andrew Cuomo’s 2 percent tax cap said Tuesday the law has saved taxpayers $7.6 billion since it took effect in 2012 and deserves to be made permanent.
The estimated savings include $587 million in the Capital Region, $2.1 billion in the mid-Hudson region, and $175 million in the Mohawk Valley. On Long Island, one of the most heavily taxed locales in the U.S., the cap’s savings were put at $3 billion.
The figures were compiled by the Empire Center, an anti-tax lobbying group, based on state tax data from 1982 to present and the assumption that without the cap “the tax levy would have continued to increase at the 30-year pre-cap average annual growth rate.”
“These savings figures are truly astounding,” Business Council President Heather Briccetti said, saying the money saved by lower school and local government property taxes could be instead spent on business expansion, paying off debts, college savings and other future purposes.
“It is critically important we do not turn back the clock,” she said. “We must keep the cap and we should make it permanent.”
Supporters debuted a new website, www.keepthecapny.com, that offers breakdowns of estimated savings.
The law, which E.J. McMahon of the Empire Center said was based on a similar Massachusetts law, only has temporary status and its continued application is tied to passage of rent regulations in New York City.
The cap is opposed by the teachers union and public employee unions who say it promotes inequality in schools. New York State United Teachers has twice lost court challenges to the law, most recently in March.
“One frank purpose of putting out these data is to remind members of the Legislature, including members of the Assembly, what the impact of this has been … it was a tremendous accomplishment and it has had a tremendous impact. But really I think it’s going to be important to the governor to secure this legacy and it’s really important to make it permanent.”
The cap keeps the tax burden from growing unreasonably at a time when school enrollments are dropping in New York, he said. “If you stop growing at twice the rate of inflation and actually hold school tax levies at or below the rate of inflation, or if inflation gets higher at or below 2 percent or so, that over time is going to really reduce the relative burden of taxes, especially school taxes,” McMahon said.
He said the main reason the tax cap is not permanent and is tied to the rent laws is former Assembly Speaker Speaker Sheldon Silver (D-Manhattan), who was forced out as a leader after his arrest in January on extortion and bribery charges. He said with Silver gone, the Assembly should get on board with Cuomo and the Senate and make the cap permanent.
The cap is set to expire in June 2016, but its fate is tied to the rent control laws that expire next month. Cuomo and the Senate Majority Republicans want to uncouple the cap from the rent laws and make it permanent as part of a end-of-session deal.
Assembly Speaker Carl Heastie (D-Bronx), Silver’s successor, was noncommittal Tuesday when peppered with questions about the tax cap at a press conference he held on the rent control law extension.
“You want me to negotiate with you right here?” he challenged a reporter who asked about the rent laws and the tax cap.
They all spoke on a day when voters across the state could cast ballots on proposed school budgets, with a very low turnout projected. “The number of votes cast has steadily decreased in each of the three years since the state’s tax cap was introduced in 2012,” the NYS School Boards Association reported this week. “Overall, the number of votes cast has decreased nearly 20 percent since the first year of the tax cap.”
NYSSBA executive director Tim Kremer urged people to vote, but acknowledged “school boards have worked diligently to craft budgets that remained within their tax caps. These fiscally responsible budgets have removed some of the drama that we’ve traditionally seen on budget voting day.”
The cap limits the annual growth of property taxes to 2 percent or the inflation rate, whichever is less, and applies to all local governments and school districts except New York City. It also applies to special districts that fund fire department, public libraries and other government agencies.
The cap can be overridden by voters in school districts, or by local government governing bodies. School district voters can also freeze property tax levies if they reject proposed budgets twice in a row.
© 2015 NYSNYS News