ALBANY, NY – March 28, 2010 – (RealEstateRama) — Governor David A. Paterson today called on Legislative Leaders to consider his property tax cap proposal as part of budget negotiations. The Governor’s tax cap proposal would impose long-term fiscal discipline and ease the crushing burden on New York homeowners, who pay the highest property taxes in the country.
“We need to get serious about addressing the property tax burden in New York State and this can only be achieved with permanent reform. As we work toward an enacted budget that includes fiscal discipline and budget reform, I ask the Legislature to take action on my proposal to protect property taxpayers as well,” Governor Paterson said. “Everyday New Yorkers have seen their property taxes rise at unsustainable rates, increasing the cost of living and pushing far too many to leave the State. It’s time for all levels of government to restrain the appetite for spending, act responsibly and ease the burden on homeowners.”
Governor Paterson submitted his property tax cap proposal to the Legislature earlier this month. His proposal would limit the amount of real property taxes that school districts, counties, cities, towns, villages, special districts and fire districts can levy and provide relief to taxpayers across the State.
The proposed property tax cap would limit tax levy growth for all school districts, counties, cities, towns, villages, special districts and fire districts to four percent or 120 percent of the annual increase in the Consumer Price Index, whichever is less. The bill is based on the recommendations of the Commission on Property Tax Relief, which found that New York’s local taxes are the highest in the nation – 78 percent above the national average.
When property taxes are expressed as a percentage of home value, eight of the top 10 counties with the highest tax rates in the nation are in upstate New York. Nassau, Putnam, Rockland and Westchester counties are in the nation’s top 10 in terms of the percentage of household income that must be devoted to paying property taxes. Property tax levies in the State are rising at more than twice the rate of inflation and salary growth.
While previous tax cap proposals focused exclusively on capping the growth of school property taxes, which comprise approximately 60-70 percent of the average property tax bill, the Governor’s property tax cap proposal would cap not only school taxes, but all local property tax growth. Like school district tax levies, local governments’ tax levies could only increase by up to the lesser of four percent or 120 percent of the annual increase in the Consumer Price Index. This bill would impose the same fiscal discipline on counties, cities, towns, villages and fire and special districts, to constrain continually increasing property taxes. This cap would provide immediate relief to all taxpayers. At the same time, this bill would protect critical municipal services by allowing local government officials to override the cap with a two-thirds vote of a local government’s governing body when circumstances demand an additional tax levy.
