A Column of News & Comment by Senator James L. Seward
New York’s property tax cap has saved taxpayers a sizeable total of more than $37 billion since its inception in 2012. While the cap has not solved all of our problems, it has been remarkably successful in encouraging spending discipline and keeping a lid on skyrocketing property tax increases.
The property tax cap limits the annual growth of property taxes levied by local governments and school districts to two percent or the rate of inflation, whichever is less. Since 2012, the vast majority of all school districts and municipalities have kept spending increases below the cap, leading to significant property tax savings for residents and businesses.
Growth in property taxes skyrocketed by over 73 percent for New York school districts between 2001 and 2011 and 53 percent in counties. Just think of the dire straits homeowners and small business owners would be in if that trend continued.
It is also important to note that when the cap was created there was a renewed commitment to increase state support to school districts. I have consistently pledged to drive more state dollars to local schools, especially high-need low-wealth districts. I have kept that promise. Over the last seven years, school aid has been growing at more than twice the rate of rest of the state budget.
The bottom line is that the tax levy cap works. Allowing it to expire would be costly and would almost certainly usher back in the days of double-digit property tax increases. That’s why I just joined with my senate colleagues in passing a bill (S.1904) that would make the property tax cap permanent. Next, we need the state assembly and the governor to join in advancing this vital legislation.
One other factor that is intertwined in the discussion is mandate relief. A portion of what local governments and school districts are forced to spend their budget on is a direct result of requirements forced on them by federal and state governments. Some of these requirements simply make no sense. I have consistently worked to eliminate and reduce mandates to help free up local dollars for local priorities. While there have been some victories on this front in recent years, I am the first to say that the job is not complete.
We can start with a full state takeover of Medicaid. New York is the only state in the nation that forces county governments to pay a share of the Medicaid costs and it is a major expense. Several Medicaid and pension reforms I have championed have been enacted in recent years saving local governments hundreds of millions of dollars, but there is more work ahead.
Along with the Medicaid takeover, I want to impose an immediate moratorium on any new mandates and institute a mandate review council. It is also time to adopt a Constitutional Amendment to ban unfunded mandates entirely. Local governments are faced with rising costs and should not have to shoulder added expenses, which will ultimately fall on taxpayers, due to unfunded mandates.
Already this year, legislation allowing early voting was passed and signed into law. I voted NO on this measure because it is another unfunded mandate. Opening polling places extra days comes with a cost for counties (and taxpayers). The hastily approved bill does not include any new funding to help counties pay for the expense.
The governor also wants to cut Aid to Municipalities (AIM) funding. Towns and villages count on this key state program to meet their needs. A cut to AIM could be devastating to small rural governments and I am fighting this proposal.
The leading complaint I hear from constituents centers on property taxes. I am also acutely aware of the painstaking measures local elected officials take to balance their budgets and still provide essential services to their constituents.
The tax cap along with bona fide mandate relief measures will answer both concerns and deliver true savings for property owners.