Friday, February 09, 2007

New Jersey Slashes Property Taxes By Up To 20%

While New York Continues To Wish Upon A Faltering STAR

The Garden State, heretofore the state with the highest property tax burden, may soon leave New York in its dust -- with the unchallenged an unexalted title of highest property tax burden in the nation.

The New Jersey Legislature has just passed a series of measures, expected to be signed into law by Governor Corzine, designed to actually lower homeowners' property tax bills, with real reductions of up to 20%. There will also be a 4% cap on annual increases.

New York, of course, continues to lag behind in effectively cutting property taxes -- picking up the rear, pooper scooper in hand, with its staunch adherence to the principles of STAR (School Tax Relief) progam, better known as put money in one pocket, while taking even more out of the other.

Under the budget recommended to the Legislature by Governor Eliot Spitzer, New Yorkers would spell relief, S-T-A-R (as in School Taxes Are Ridiculous).

Homeowners' would see an increase in their STAR credit on the school property tax bill -- which, for a Suffolk County homeowner with an income of $80,000, would translate, roughly, into a credit of $760 per year.

Maybe $760 saved on a tax bill of $8000 or more is nothing to sneeze at. Maybe not. The fact remains that what the homeowner gets as a credit for school taxes, the school district must make up for elsewhere.

No problem. The State simply kicks in more money as aid to education, right?

Wrong. The State antes up a little more -- a relative pittance for most Long Island districts -- and the school districts, still faced with unfunded mandates from Albany and Washington, along with contractual expenses to which they are legally bound, is left to raise the tax rate.

An increase in the tax rate effectively raises the school property tax, and guess who has to open their wallets to bay the bill?

You are so smart! Homeowners -- credit in one hand, writing that check with the other.

Your net-net on this one? Zero. Nada. Naught. The big goose egg.

Worse still, when State Aid shortfalls are calculated in and added to rising costs for buses, oil, electricity, insurance, and even paper, the typical homeowner may wind up paying MORE school property taxes after the STAR credit than she did before.

Unless the State Aid formula, which favors upstate districts and short-changes Long Island [by the tune of somewhere in the nighborhood of 84% aid to upstate, and 16% to Long Island], is made more equitable, mandates are required to be funded by those who mandate them, and income tax dollars are returned to the communities and municipalities from whence they came, homeowners in these parts will continue to get a credit from Peter to pay, er, ah, Peter and Paul.

Think about it, Long Islanders: Out of every dollar you pay in income taxes to Albany (out of which pot comes STAR proceeds to local school districts), only 25 cents comes back home to work for you. Not much return on your investment, is it?

And when you figure that a good 95% of school district budgets are made up of costs that are either mandated (but not funded), or obligatory (as in transportation, insurance, contract performance), there is little room to play with numbers, and even less room to cut.

Why, even homeowners whose school districts on austerity don't get a break, the savings meager, at best, if at all, and the impact upon community, devastating.

There has to be a better way. There is.

The Constitution of the State of New York requires the State to provide every child with an education. A FREE education, at that! [The Constitution's words, not ours. Article XI, Section 1.]

That would seem to leave little room for Albany to wiggle out of its obligation to fully fund our public schools.

END THE DISPARITY IN AID TO EDUCATION. If a school district in the Thousand Islands region has 85% of its budget covered through State Aid, equity, fairness, and the State Constitution require Albany to give no less of a percentage in aid to Long Island's public schools.

ELIMINATE ALL UNFUNDED MANDATES. If Washington (No Child Left Behind) and Albany insist on programs, testing, enrichment, or providing busing out of the district for private school students, they must pay the price. Unfunded mandates are choking our schools, limiting the ability and resources necessary to teach, and strangling the homeowner.

CHARTER A COURSE TO EDUCATIONAL EXCELLENCE, NOT CHARTER SCHOOLS. If our public schools are failing, help 'em out. Fix the problems. Find the solutions. Don't simply cut and run. [That goes for parents as well as government]. Let's not spend the public's money to finance a parallel system of private schools, this in the vain hope that these Charter schools will somehow outperform and raise the standard. Give public schools the tools, the resources, and the chance, and they, too, will shine!

AX THE TAX CREDIT FOR PRIVATE SCHOOLS, AND DON'T EVEN THINK ABOUT VOUCHERS. A tax credit for parents who send their children to private schools is merely a backdoor method of siphoning public money away from our public schools. Public schools are for everyone -- choose to go, or not. Private schools are just that, private. You go, you pay. Tax dollars belong in the public domain, and not in the hands of private or parochial institutions and the parents who patronize them.

CONSOLIDATE AND ELIMINATE. Long Island doesn't need, and Long Islanders shouldn't have to pay for, 126 seperate and distinct school districts. Community schools (along with their football and lacrosse teams) can keep their local identities, while still shedding the burden of exhorbitent costs necessary to operate a school district. With the average salary for district Superintendent's at $200,000 per annum, and rising (that's an average of $25.2 million in chief administrator salaries alone), consider the savings if having one Superintendent for Nassau and another for Suffolk, paring down local administration and front office staff. Merge offices, consolidate services, eliminate redundancy and waste, and put the savings into a reduction of the school property tax.

END DOUBLE-DIPPING INTO STATE PENSIONS. The practice of State and municipal employees collecting more than a single State pension (arising from service under multiple titles or by reason of holding more than one government position -- sometimes simultaneously) is an extravegance strapped New Yorkers can no longer afford to pay for.

Just a few ideas [yes, we have many], all of which would save New York taxpayers millions, while improving the prospects for our public schools.

Meanwhile, as we wait for the Governor and State Legislators (or should we say, with some familiarity with the process, "Eliot, Shelly, and Joe?") to act and react, all we can do is look longingly across the Hudson to New Jersey, and keep on wishing on that distant, faint, and all too unreachable STAR.
- - -
We like Suffolk County Exec, Steve Levy's, idea for a credit card that gives you property tax credits rather than frequent flyer miles or cash back.

Here's an idea: For every dollar you charge to the card, the State will give a dollar in State Aid to your school district.

And a catchy slogan, too: The NY Property Tax Credit Card -- Don't Let Them Tax Your Home Without It!
LI eyes NJ tax cut with envy
By Dave Marcus
Newsday Staff Writer

Property taxes being slashed?

William Hill, a retired real estate broker in West Babylon, read the news with a mixture of excitement and disbelief yesterday. It was a good development, he felt, but he noted a couple of problems. First, this was legislation in New Jersey, not New York. And the plan seemed suspiciously vague.

"I think it's wonderful, but I don't know where communities are going to make up the money," said Hill, 69, president of the West Babylon Taxpayers Association.

Economists and policy analysts across Long Island and New York City shared Hill's very cautious enthusiasm. New Jersey and New York are the states with the highest property taxes and some of the highest school spending in the country, and taxpayers are demanding relief. So when New Jersey sneezes, New York checks its own temperature. And when New Jersey moves to lower property taxes, New York gets inspired.

"That a state in the metro region is moving to cut taxes is certainly encouraging," said Rich Guardino, dean of Hofstra University's Center for Suburban Studies. "Long Islanders are suffering from such an onerous tax burden that relief in any form would be welcome."

The New Jersey plan offers many homeowners a 20 percent property tax cut. Wealthier homeowners get less, and families earning more than $250,000 don't get a break. The legislation, approved by both Democrats and Republicans, is being studied by Gov. Jon Corzine.

Gov. Eliot Spitzer is preparing to push his own three-year, $6-billion middle-class property tax relief. Building on the complex School Tax Relief program, called STAR, it offers the greatest breaks to the middle class. In Suffolk, for instance, families earning up to $80,000 would get an average break of just more than $760.

"The New York system needs a lot of improvement," said Frank Mauro, head of the left-leaning Fiscal Policy Institute.

He noted that the plans have several key differences. New Jersey covers renters; New York wouldn't. New Jersey is reducing all property taxes; New York wants to reduce school taxes. New Jersey has a 4 percent cap on raising tax levies; New York wouldn't.

Mauro said the cap will hurt poorer districts in the city and on Long Island. Conservatives, though, said the cap is necessary. But they are skeptical of tax relief plans in New Jersey and New York because they say the states are simply switching money from one pot to another.

"When you reduce the tax price to the homeowner, it becomes easier for the school district to raise taxes faster to make up for it," said E. J. McMahon, director of the Manhattan Institute's Empire Center for New York State Policy.

In West Babylon, Hill said he is all for any kind of tax relief, especially because he just received an $8,200 property tax bill himself. But having served on the school board for four years, he said politicians are being disingenuous. "Nobody is stopping and saying, 'Look, you have the federal requirements of No Child Left Behind. That's what really puts the burden on the taxpayers. '"

Hill has seen his grown children and their friends scatter to other states, most with lower taxes - though he does have one son in New Jersey. And he says it's getting very late for any kind of property tax relief in New York City and Long Island.

"Any of the people that I've spoken to are interested in going south. They'd just as soon live in nice weather and pay a hell of a lot less in taxes."

Highlights of the New Jersey tax cut plan:

Cut property taxes by 20 percent for households earning up to $100,000 and 10 percent for households earning $250,000.Cap annual property tax increases at 4 percent.

Ask voters to consider merging towns.

Create a comptroller to investigate government spending.

Strip pensions from corrupt public officials.

Create county school superintendents with authority to veto school spending.

Bar newly elected or appointed officials from receiving taxpayer-paid pensions.

Copyright 2007 Newsday Inc.

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