Its The Property Tax, Stupid

Or Was That The Stupid Property Tax?

The NYS Commission on Property Tax Reform held its first (and perhaps last) public hearing on Long Island.

Hearing, yes, but are they listening?

Among those testifying, Nassau County Assessor Harvey Levinson, who again proposed replacing (not supplementing) the regressive school property tax (based solely on the market value of one's real estate) with a progressive income tax (based on one's ability to pay).

Sticking to the plan first aired before the public in 2005, Levinson suggested a local (county) income tax in the place of the school portion of the property tax, a proposal that has met with mounting resistence, both from elected officials and John Q.

School funding by way of an income tax would, of course, cure a multitude of ills, not the least of which is relieving homeowners who are house rich but cash/income poor owing from the onerous financial burden imposed by the property tax.

Further, an income tax would capture both homeowners and renters (legal and illegal), as well as business and commercial entities (provided they pay income taxes) that have not, in recent years, borne their fair share of the school property tax.

Financing public education through an income tax would not only create a more equitable means of levy -- those who have the financial wherewithal shouldering more of the cost than the have nots (generally, seniors, college grads, young workforce, and, of late, the struggling middle class) -- it would also enable (and must envision) a more equitable across the board distribution of monies to local school districts, ending, once and for all, the upstate/downstate disparity.

Fund our schools through an income tax -- and make that a supplement to the existing NYS income tax, not a new local/county income tax -- and you eliminate the hand in one pocket while picking the other of STAR, dramatically reducing -- perhaps by as much as several thousand dollars per household -- a recurring and ever-increasing expense of homeownership, while still preserving the tax deduction (this time for income taxes rather than real estate taxes).

At the same time, administrative expenses,bureaucratic red tape, and the astronomical costs related to maintaining a property tax based system -- from assessment review to the tracking and mailing of rebate checks -- are either greatly reduced or, better still, eliminated altogether.

An income tax to take the place of the school property tax? Commission Chair, Tom Suozzi, calls it a "non-starter."

Well, we say, "start." Start to think about an income tax, logically rather than by your gut. Start to crunch the numbers, both short term and long. Start to reduce the real cost of homeownership, and shift the burden from value of the home to ability to pay.

It makes sense, and would be a win-win for anyone who has been paying that hefty property tax bill, year in and year out.
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Panel hears plea for income tax
BY WILLIAM MURPHY
william.murphy@newsday.com

The Nassau County tax assessor urged a state panel Wednesday to eliminate residential property taxes to fund schools -- and replace them with a local income tax.

Assessor Harvey Levinson told the panel, which is examining ways to reduce the property tax burden, that the current system of property taxation is inherently unfair and can not be fixed.

"The assessed value of a home is not an indicator of a family's ability to pay school taxes," Levinson said at a meeting of the New York State Commission on Property Tax Relief Wednesday in Hauppauge.

William Lindsay, presiding officer of the Suffolk County Legislature, also suggested implementing an income tax to replace property taxes -- but recommended it be a surcharge on the state income tax, rather than on local income.

The chairman of the commission, Nassau County Executive Thomas Suozzi, had previously dismissed the potential for income tax to replace property taxes as a "non-starter." However, he gave no indication Wednesday about which way he might lean, asking Levinson to present the panel with more information on the idea.

Earlier in the meeting, E.J. McMahon, a senior fellow at the conservative-leaning Manhattan Institute, suggested a cap on property taxes as a way of reining in their growth.McMahon said the best model to follow was in Massachusetts, where Proposition 2 1/2 is working relatively well. "There were not Draconian impacts," McMahon said.

The hearing was the third of eight scheduled around New York before the commission makes its recommendations to Gov. Eliot Spitzer in mid-May.

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