ALBANY - A special commission created to find a way to cap New Yorkers' property taxes may not call for a cap after all.
The powerful New York State United Teachers union opposes the cap that would limit how much most school districts could raise through the local tax levy.
“A tax cap makes no sense if we are serious about our efforts to maintain a high-quality education system and close the achievement gap” between poor and wealthier districts, said Richard C. Iannuzzi, NYSUT's president. “Tax caps do nothing to impact the rising costs facing school districts.”
Instead, NYSUT and other lobbyists representing school boards and school administrators support a “circuit breaker.” That would provide a state subsidy to cap taxes, but only for homeowners determined to be of moderate income.
The state subsidy could cost the state more than $1.5 billion a year.
Who receives the benefit would be defined by income, house value and the region of the state. It wouldn't cap taxes for businesses, landlords or directly affect tenants, unless provisions are added before the May 22 final report is issued to the governor and Legislature.
Gov. David Paterson is making a priority of reducing the state's local property taxes, which are among the nation's highest and blamed for an exodus of people and employers. He notes that the state's STAR tax subsidy program now provides $5 billion a year in state funds to school districts which are supposed to use it to offset the burden on taxpayers.
But Paterson notes local school taxes have still gone up an average of 7 percent for five straight years despite increases in STAR and historic increases in traditional state school aid.
“Everybody - everybody - agrees property taxes are a problem, so that's a big plus,” said Nassau County Executive Tom Suozzi, who heads the commission and must build a consensus. “A second plus is that the governor has made this a statewide issue. I've been trying to push that rock up the hill for years.”
Suozzi, a Democrat, said the state needs a “circuit breaker” that kicks in a tax break on the most hard-pressed New Yorkers, but New Yorkers also need a cap on local tax levies. That could limit the amount of money a school district could raise in taxes to a fixed amount, such as 4 percent or 120 percent of the consumer price index, whichever is lower.
District residents, however, could also choose to suspend the limit in an annual vote.
“If you were to do a circuit breaker without a property tax cap, there would be less incentive for school districts to control their spending because the burden would be shifted to the state,” Suozzi said.
“It would be a step backwards,” said Kenneth Adams of the state Business Council. “The only way this makes sense, the only way it works, is to have hard caps across the board because that's the way to force spending cuts.”
But that goes against the teachers unions, which emerged as the most powerful lobbying force in Albany this budget season. The group, which spends millions on lobbying and campaign contributions, last month helped win a record increase in school aid despite hard fiscal times, fought off a tougher requirement for getting tenure, and even got a statewide day of commemoration for teachers.
“When asked to choose between quality schools and lower taxes, parents and community members repeatedly vote in favor of investing more in public education,” said Alan B. Lubin, NYSUT's executive vice president.
“I expected from the beginning that a lot of people would be interested in a circuit breaker,” said E.J. McMahon of the Empire Center for New York State Policy, part of the fiscally conservative Manhattan Institute. “But it's not a substitute for a cap.”
He said a cap would help school districts eliminate some costly mandates issued by Albany. If schools show they need more state aid because their capped local resources aren't enough, then the Legislature will be pressured to eliminate mandated programs and spending.
Identifying state mandates that should be eliminated is also part of the task of Suozzi's commission. It held the last of its series of statewide hearings last week.
“The big issue is you give them more aid and they keep raising taxes,” McMahon said. “The way to limit taxes is directly, with a cap.”
On the Net
http://www.state.ny.us
http://www.nysut.org
www.manhattan-institute.org
“A tax cap makes no sense if we are serious about our efforts to maintain a high-quality education system and close the achievement gap” between poor and wealthier districts, said Richard C. Iannuzzi, NYSUT's president. “Tax caps do nothing to impact the rising costs facing school districts.”
Instead, NYSUT and other lobbyists representing school boards and school administrators support a “circuit breaker.” That would provide a state subsidy to cap taxes, but only for homeowners determined to be of moderate income.
The state subsidy could cost the state more than $1.5 billion a year.
Who receives the benefit would be defined by income, house value and the region of the state. It wouldn't cap taxes for businesses, landlords or directly affect tenants, unless provisions are added before the May 22 final report is issued to the governor and Legislature.
Gov. David Paterson is making a priority of reducing the state's local property taxes, which are among the nation's highest and blamed for an exodus of people and employers. He notes that the state's STAR tax subsidy program now provides $5 billion a year in state funds to school districts which are supposed to use it to offset the burden on taxpayers.
But Paterson notes local school taxes have still gone up an average of 7 percent for five straight years despite increases in STAR and historic increases in traditional state school aid.
“Everybody - everybody - agrees property taxes are a problem, so that's a big plus,” said Nassau County Executive Tom Suozzi, who heads the commission and must build a consensus. “A second plus is that the governor has made this a statewide issue. I've been trying to push that rock up the hill for years.”
Suozzi, a Democrat, said the state needs a “circuit breaker” that kicks in a tax break on the most hard-pressed New Yorkers, but New Yorkers also need a cap on local tax levies. That could limit the amount of money a school district could raise in taxes to a fixed amount, such as 4 percent or 120 percent of the consumer price index, whichever is lower.
District residents, however, could also choose to suspend the limit in an annual vote.
“If you were to do a circuit breaker without a property tax cap, there would be less incentive for school districts to control their spending because the burden would be shifted to the state,” Suozzi said.
“It would be a step backwards,” said Kenneth Adams of the state Business Council. “The only way this makes sense, the only way it works, is to have hard caps across the board because that's the way to force spending cuts.”
But that goes against the teachers unions, which emerged as the most powerful lobbying force in Albany this budget season. The group, which spends millions on lobbying and campaign contributions, last month helped win a record increase in school aid despite hard fiscal times, fought off a tougher requirement for getting tenure, and even got a statewide day of commemoration for teachers.
“When asked to choose between quality schools and lower taxes, parents and community members repeatedly vote in favor of investing more in public education,” said Alan B. Lubin, NYSUT's executive vice president.
“I expected from the beginning that a lot of people would be interested in a circuit breaker,” said E.J. McMahon of the Empire Center for New York State Policy, part of the fiscally conservative Manhattan Institute. “But it's not a substitute for a cap.”
He said a cap would help school districts eliminate some costly mandates issued by Albany. If schools show they need more state aid because their capped local resources aren't enough, then the Legislature will be pressured to eliminate mandated programs and spending.
Identifying state mandates that should be eliminated is also part of the task of Suozzi's commission. It held the last of its series of statewide hearings last week.
“The big issue is you give them more aid and they keep raising taxes,” McMahon said. “The way to limit taxes is directly, with a cap.”
On the Net
http://www.state.ny.us
http://www.nysut.org
www.manhattan-institute.org
The Citizens' Say
There are 2 comment(s)
tome8689 wrote on Apr 28, 2008 8:15 PM:
The taxpayer watchblog wrote on Apr 28, 2008 2:00 PM: