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Municipalities and Workers Seek Changes to the Property Tax Cap

Jun 17, 2015

Steve Allinger, of New York State United Teachers, is among several speakers at a press conference at the state Capitol urging changes to the state's property tax cap
Credit Karen DeWitt

Leaders of all of the state’s local governments, as well as unions representing teachers and public workers, are warning state lawmakers not to simply renew the state’s property tax cap without some changes.

The 2% per year property tax cap does not technically expire until next year, but leaders of cities, towns, and counties, as well as teachers and public worker unions say they fear an early renewal of the law might be part of any end of session deal. The tax cap is linked to continuation of New York City’s rent laws, which have expired but will likely be renewed by the end of the week.

David Little is with the Rural Schools Association is among those urging lawmakers to take a breath.

“Let’s wait until you’ve had an opportunity to do an exhaustive evaluation,,” Little said. “And then let’s move forward in a way that’s helpful, not destructive.”

Anne Pope, with the NAACP, says the cap unfairly hurts poor and minority school children. She says the state is already ignoring a court order that calls for spending billions more dollars on struggling schools.

“How can schools continue to serve some of our neediest children with a tax cap that limits what they can raise to support our kids?” Pope asked.

Steve Aquario, with the New York State Association of Counties, says capital projects and infrastructure improvement costs should not be counted in the cap going forward.

“This will positon New York State to repair it’s roads , its bridges, it’s water needs,” said Aquario, who said the economic resurgence has led to a need for more building. .

The groups also want the cap to be tied more closely to the rate of inflation, if inflation rises beyond 2% per year. They think schools should be permitted to increase their tax rate if there’s a large influx of children. And they want the requirement that a supermajority of 60% is needed to override the cap, be changed to a simple majority.

But the head of a fiscally conservative think tank says the only outcome of a modified property tax cap is, higher taxes. EJ McMahon is President of the Empire Center.

“What they are essentially are demanding is that we want to raise taxes higher faster,” McMahon said.

McMahon says that it’s not that difficult for local government to override the cap. A 60% vote of a town or county board or city council is needed. He says most local governments have a large majority of representatives of the same political party, who are more persuadable to vote as a block.

Schools require a supermajority of 60% of voters to override the tax cap. McMahon says that’s harder, but he says it encourages school administrators and school boards to make a better case if they want to raise taxes beyond the 2% cap.  He says the cap is working and it should be made permanent.

“If we can just continue it for  the next 10 to 20 years we will really have a significant relative decline in the tax burden, “ McMahon said. “For the first time in the whole post war era.”

Republicans in the State Senate want to make the tax cap permanent, and Governor Cuomo has said he’d go along with that. Business groups, including Unshackle Upstate, are also backers, saying the three year old cap has already saved taxpayers an estimated $7.6 billion dollars, if the average rate of yearly spending increases before the recession had continued.   Assembly Democrats have not yet agreed to any extensions of the tax cap.

The cap is very popular among voters, with polls consistently showing wide support.