Thursday, June 15, 2006

Suozzi On Property Taxes

Tom Suozzi's Property Tax Cut Plan

New York's property taxes are 49% higher than the national average. Excluding New York City, property taxes in the rest of the state are 73% above the national average. From 1995 to 2005, property taxes in New York grew by 60%_-more than twice the rate of inflation (28%). Things are even worse downstate-taxpayers in Hamilton, Nassau, Putnam, Rockland, Suffolk and Westchester counties have tax burdens that are more than twice the statewide average, and suburban downstate property values grew by 7 percent annually from 1995 to 2005, almost five times as fast as the average annual upstate growth of 1.5 percent.

According to the Comptroller's new report, property taxes "are a major contributor to higher housing costs" in downstate suburbs. Despite STAR and state aid increases, the per-pupil property tax burden in districts outside New York City has risen by twice the rate of inflation over the past four years, shooting up 28% from 2001 to 2005. The Medicaid cap has slowed the rate of county growth; what remains uncontrolled is school board spending.

At the same time that high property taxes are hurting our downstate suburbs, failing schools are hurting NYC and other failing school districts around the state.

$2,163,554,991 of my Taxpayers Savings Plan goes to property tax relief to districts with the highest overall tax rates in counties with the highest overall taxes in the form of a new taxpayers savings program that offers a reduction in tax payments paid directly to property tax payers in these high tax rate districts in highly taxed counties.

Money in this plan goes largely to the downstate counties Comptroller Hevesi identifies as having the highest property taxes, which are the same counties that receive the lowest shares of state education aid. Nassau, for instance, gets only 17% of its school funding from the state, while the state average for local aid is 37%. On a per student basis, Nassau has 7.5% of the state's students, yet receives less than 4% of total state aid.

Counties that average less than $5,500 in per student state aid are given property tax relief equal to the difference between $5,500 and what they presently receive in per student state aid in direct property tax relief. Within each county that money is distributed in inverse proportion to the property tax rate.

In plain English, state property tax money is sent to school districts with less commercial property or lower property values—which as such need higher tax rates to fund their local share of education spending. By determining what each district has to assess per hundred thousand dollars of property value to raise the same amount of money per student up to a reasonable limit, this formula ensures that aid is targeted at higher need areas, not merely areas that choose not to control spending.

Even after this plan, these wealthier counties will still be receiving significantly less than an even share of state aid per student, but the gap will be lessened, even as the tax rate gap between districts in these counties is reduced.

For property tax payers to receive these (recurring) monies, their school districts must agree to implement a five year spending plan with no more than a 5% average annual spending increase over the five years, and no more than 8% in any given year (to allow for short term shortfalls). For those districts that do not agree, the money is instead distributed countywide to provide county property tax relief.

Click Here for full text of Tom Suozzi's remarks.
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Read, Capitol Confidential, Suozzi Goes To Town

Click HERE for High Taxes New York, interesting and informative reading from The Public Policy Institute

Read, Governor rivals tell tax plans
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Next up, Eliot Spitzer On Property Taxes

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