Call it grandstanding or grand vision, the Republican-controlled State Senate now has the honor of being the progressive legislative body, at least on the property tax relief front.
The vote was 60-1. The legislation -- eliminating the school portion of the property tax over a consecutive five year period, replacing same with a State subsidy. Price tag: $9.5 billion per year.
Leave aside where the Legislature will come up with the money -- they always seem to find the bucks to fund favored projects -- and talk of projected growth in State revenues of $33 billion over the next five years is all the rage.
The State debt -- including that incurred by the Public Authorities -- will quickly gobble up any surplus, real or imagined (funny how no one, save the Comptroller, talks about that), and short of raising income taxes or imposing outlandish fees on commodities such as light and air, the likelihood of $9.5 billion (in today's dollars, we presume) laying around the State Capitol, is, well, about as likely as finding Alberto Gonzales reading the Constitution of the United States.
Yes, its all show. The Senate knows that a snowball has a better chance of staying clean in the gutters of Hempstead Town than does this watershed legislation mustering support in the Assembly.
Smoke and mirrors. And when that smoke clears, we're all left with that same ache in the belly, and empty feeling in the wallet.
Maybe Sheldon Silver and the Assembly Democrats will surprise us and pass this landmark measure. They'll do it on a lark, or on a dare. Or maybe no one will show up for roll call, and the bill will pass with nary a member in chambers.
Imagine if such legislation found its way to the Governor's desk. Prudence, if not fiscal realities, may well dictate a veto. The overwhelming sentiment of the people, on the other hand, to reign in that school property tax, may prove too compelling for even this strong-will chief executive.
So, why not? The Senate has done its part, with a smirk and a nod to P.T. Barnum. The Assembly should take up the cause -- a double-dare, if you will -- and allow this measure to sail through.
Let this Legislature belie the notion that dysfunction triumphs over the will of the people. New Yorkers want real property tax reform NOW -- and not more commissions or Blue Ribbon panels to study the problem.
Instead of debating how to lower the property tax and bantering about the next generation of school financing, why not put that cart before the horse -- eliminating the school property tax over the next five years, then, of abnsolute necessity, figuring out a way to pay for it.
It wouldn't be the first time our State Legislators -- or government in general -- did a topsy-turvy (the old "bass akwards"). Who knows? It might just work!
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Press Release from Senator Joseph Bruno, Majority Leader:
SENATE MAJORITY PASSES COMPREHENSIVE PLAN TO OVERHAUL PROPERTY TAX SYSTEM IN NEW YORK STATE
Reform Plan Would Empower Local Districts to Eliminate Property Taxes, Freeze Assessments for Seniors, & Provide Mandate Relief
The New York State Senate today passed major property tax reform legislation that could result in the complete elimination of residential school property taxes in school districts that vote to phase out property taxes over five years, with revenue replaced with additional State funding.
"The Senate Majority has fought for increased property tax rebates and historic increases in school aid, yet property taxes keep rising and people need more relief," Senate Majority Leader Joseph L. Bruno said. "This legislation represents a dramatic step forward to reform our system of property taxes that continues to be an enormous burden to homeowners. With our NY-STOP Property Tax Reform package, we will put more money back into the pockets of hardworking homeowners, help thousands of seniors remain in their homes, and encourage young New Yorkers to stay, work and raise a family right here in New York State."
The New York "Stop Taxing Our Property" Reform Plan (NY-STOP) would: give school districts the authority to eliminate residential property taxes over five years, with revenue replaced by additional State funding; impose an immediate freeze on property tax assessments for seniors; create a Blue Ribbon Commission on Property Tax Reform and enact comprehensive mandate relief measures to help lower costs for school districts and municipalities.
"This omnibus bill contains measures which I have introduced and fought for in response to taxpayers who have been calling for relief from the crushing burden of property taxes," said Senator Stephen Saland (R,I,C, Poughkeepsie, Chairman of the Senate Education Committee. "Reforming our property tax system, especially school property taxes, is a necessity. It is critical to virtually all property owners, and especially our seniors, in order for them to remain in the homes where they have lived for years and for our young people to afford to live in the communities where they were raised."
"Overburdening property taxes is the single most pressing issue facing New Yorkers in the Hudson Valley. Too many seniors have to decide whether or not to buy groceries or pay their taxes. Not too long ago, I was one of a few lone voices in the Legislature talking about property tax reform; now it is a rallying cry around the State," stated Senator John J. Bonacic (R/I/C - Mount Hope). "Yet, the Assembly leadership, year after year, remains silent on this issue and refuses to offer their own constituents relief. How many more foreclosures have to occur? How many more young people trying to realize the American dream have to be turned down for a mortgage because the payment is too high due to the property taxes? The Senate Majority's property tax reform package is a solution to the property tax crisis. The Assembly should follow the Senate's lead."
ELIMINATING RESIDENTIAL PROPERTY TAXES
Under the provisions of the bill (S.6119), every school district would be authorized to take a public vote to determine if real property taxes on primary residences (STAR eligible properties only) would be phased out over five years and be replaced with additional State funding. This vote would be held on the third Tuesday in May (school district budget vote day).
The proposition would be placed on the ballot only after the submission of a petition which contained at least 25 percent of the persons who voted in the previous school budget vote (or in the previous general election in the Big Five cities). Districts which enter into this system would be required to reduce residential real property taxes on primary homes by 20 percent annually until such tax was eliminated after five years.
A new state aid formula would be created to fully reimburse districts for this reduction in local tax collections. After five years, the formula would provide districts with an annual school aid cost-of-living increase.
In 2006, primary residential homeowners paid approximately $9.5 billion in school property taxes. If every school district entered the optional system, the 20 percent reduction in residential tax levies would reduce school property taxes by $1.9 billion annually. Eventually, if every school district were under this new system, State funding would fully replace the $9.5 billion paid by homeowners in school taxes. This amount is equal to the $9.5 billion in proposed school aid increases and property tax relief proposed by Governor Spitzer in his Executive Budget this year.
Under the new system, property taxes on other properties (i.e. second homes, apartments and businesses) would continue under the current taxing system. Districts which do not enter into this financing system would continue under the existing property tax structure.
PROPERTY TAX FREEZE FOR SENIOR CITIZENS
Under the Senate bill, school districts would be authorized to freeze the school tax rate for seniors over the age of 65. The Senate's proposal would provide immediate tax relief to hundreds of thousands of seniors across the State by freezing the real property assessed value of their homes at a fixed rate, while also providing state reimbursement to municipalities for lost real property tax revenue.
The legislation would establish a fixed real property assessed value for persons sixty five years of age or older who own a primary residence. Eligible seniors must have an income of less than $100,000. Individuals would apply annually with their assessor to participate in this program by completing a form developed by the Office of Real Property Services.
Under the terms of the bill, the local assessor would be charged with notifying all local real property owners about the program, and would have to provide a statement on tax bills stating, "Your tax savings this year resulting from the fixed real property assessed value is $__." Assessors would also be responsible for applying to the State for reimbursement for the loss in property tax revenue.
In addition, the Senate's proposal will enable school districts to freeze property tax rates on senior citizens over 65 who currently qualify for the senior STAR enhancement.
BLUE RIBBON PROPERTY TAX REFORM COMMISSION
The plan would also establish a Blue Ribbon Property Tax Reform Commission. The eleven-member commission, which would include experts in the fields of education, municipal finance and assessment administration, would examine the property tax system and offer reforms to relieve homeowners and other property owners of their increasing tax burdens. The Governor, the Temporary Leader of the Senate and the Speaker of the Assembly would each appoint three commission members. The Minority Leaders of the Assembly and Senate would each make one appointment.
The commission would report at the end of calendar year 2007 on a reform plan for schools and local governments to lower local tax burdens with a focus on enhanced accountability, alternative financing methods, governance options, property assessment plans, and tax containment policies. The commission also would be charged with examining possible alternatives to the real property tax for funding schools and changes to the property assessment system.
A stand-alone version of this legislation, which was sponsored by Senator Betty Little (R,C,I-Queensbury), was approved by the State Senate on May 9 (S. 1052).
"Nothing is more important to my constituents than property tax relief," said Senator Betty Little. "And I know this is a priority for many of my colleagues throughout New York State. While we have many proposals to reform the property tax system, we've not succeeded in reaching a consensus. The commission would examine this complex issue statewide and, after a thorough review, offer reforms that lead to substantive, long-term relief. The goal is to propose solutions that help property taxpayers throughout New York State. I'm looking for reforms that make sense in the North Country, as well for those living in Central and Western New York, the Southern Tier and Hudson Valley, and on Long Island."
MANDATE RELIEF PLAN
The Senate's reform plan also includes a comprehensive mandate relief plan in order to help reduce costs to school districts, municipalities and local taxpayers. The measure would require the State to pick up the cost of any state mandated program imposed on municipalities or school districts.
"State mandates place an unfair burden on our taxpayers and this legislation will help to fix the inequity," Senator John Flanagan (R-C, East Northport), said. "This entire package is aimed at relieving the pressure that school taxes place on the homeowners of our state and is a true overhauling of our current system. The time has come to stop taking small steps in providing piecemeal relief. This Senate proposal provides critically needed broad sweeping changes that protect our taxpayers while maintaining educational excellence."
"Ask any resident of the Hudson Valley what is the greatest problem that they face and almost all will immediately answer property taxes," Senator Vincent Leibell (R-C-I, Patterson), said.
"This tax has become a burden that New Yorkers around the State can no longer afford to bear. If not immediately controlled and reduced, it will create a mass exodus of businesses and people from the Empire State."
The bill was sent to the Assembly.