Crocodile tears over NY’s tax cap

by E.J. McMahon |  | New York Post

Long Island town officials are crying the blues over the budgetary squeeze supposedly created by the state’s property-tax cap. They’re not alone: You’ll hear much the same from town pols elsewhere in the metro region and across New York state.

But the thrust of their complaints — that the tax cap is somehow blocking urgent public projects and programs — just won’t hold water.

Due to low inflation, the basic tax cap for local fiscal years beginning Jan. 1, 2016, will be 0.73 percent — the lowest since the cap was signed into law in 2011. Locally variable exclusions and exemptions typically will raise the town cap to an average of a little more than 1 percent.

With tentative 2016 town budgets due to be unveiled this week, Newsday’s front-page on Tuesday blared: “Long Island Officials: Tax Cap’s Too Tight.”

“To stay under the cap, officials in a number of towns say they will not hire for some open positions and will be forced to delay key projects,” the newspaper reported.

“Forced”? Please.

The cap can be overridden by a vote of at least 60 percent of a municipality’s governing body. The vast majority of towns across New York are governed by five-member boards: All it takes to override the cap is the same three votes needed to pass a budget and tax hike under the cap.

Someone should explain that to Huntington Supervisor Frank Petrone, quoted by Newsday as blaming the tax cap for delaying a new parking garage and new town parks. Petrone and three fellow Democrats occupy four of five town-board seats. It shouldn’t be too tough for him to muster three votes for an override — assuming the parking garage and parks are really needed, that is.

The same situation exists in the town of Babylon, where Supervisor Richard Schaffer reportedly cited the need to replace an “outdated” animal shelter and “rundown” trailers used by landfill employees. Schaffer and his fellow Democrats cast four of the five town-board votes.

For towns with seven-member boards, an override requires five votes, one more than a simple majority. But in most such places, including Nassau County mega-towns of Hempstead and North Hempstead, Democrats or Republicans control both the supervisor’s chair and a super-majority.

In reality, for municipalities across New York state, the tax cap is less a real fiscal obstacle than a potential political cudgel. Town-board members serving two-year terms are fearful that overriding the cap — for any reason — will create an issue for challengers.

Too bad. Elected officials who want to be seen as leaders ought to act like it. If they believe the cap is blocking important local priorities, they should muster the guts to propose an override and explain to the public why it’s needed.

True, the tax cap’s impact has been complicated by Gov. Cuomo’s temporary tax “freeze” gimmick, which gives homeowners a state income-tax credit to reimburse any tax hikes paid under the cap. But this is hardly a big deal: For a $350,000 house in Huntington, the freeze credit for 2016 will come to roughly $15. In any event, the credit expires next year.

Long Island and the lower Hudson Valley are saddled with some of the highest local property taxes in the country relative to homeowners’ incomes — and while town taxes are a relatively small share of the total, all levels of government need to control their appetites as a way of lowering those burdens in the long run.

Instead of complaining about the tax cap, local pols should press Albany harder for relief from state mandates that make it difficult to restructure costly compensation packages for public employees. They also should do more to resist and spotlight state laws that drive up local infrastructure costs, including union prevailing-wage requirements.

The root of all this tax-cap bellyaching by Long Island politicians may have been inadvertently summed up in a comment attributed by Newsday to Deputy Supervisor Aline Khatchadourian of the town of North Hempstead.

This year, she said, “There’s no wish list.”

In other words, the tax cap is working.