From the Mayor: Governor's Two-Year Property Tax Freeze Not the Answer
Mar. 19, 2014: Governor Cuomo has announced a two-year property tax freeze as a hallmark of his 2014 agenda. However, it is facing growing opposition from both political parties, school districts, and local governments, as well as the nonpartisan New York State Conference of Mayors and Municipal Officials.
The two-year tax freeze is for individuals (outside New York City) with an adjusted gross income of under $500,000. In order for a taxpayer to receive the property tax credit, the local governments must remain under the cap. In our case, that would include all taxing jurisdictions such as the Bronxville school district, the Village of Bronxville, the Town of Eastchester, Westchester County, and the Eastchester Fire District.
In order to benefit from the "freeze" in a second year, the local governments would have to remain within the tax cap as well as agree to various consolidation plans with other communities.
The impetus for this new iteration in an election year is prompted by the governor's belief "that the state needs to pressure municipalities to cut spending in order to establish long-term tax savings in a state with among the highest taxes in the nation."
There is not a community anywhere in New York that is increasing services by 2% each year, nor does any elected official think that is a good idea; rather, we are cutting personnel and services to meet Albany's bills.
Although the governor promised that the implementation of the initial property tax cap would be followed by meaningful mandate relief to help local governments live within the cap, that promise was not kept, and, in addition, state aid was cut.
No mandate relief is in sight, but election-year pressure is increasing. The hypocrisy of all of this is astounding. An example, since I have been mayor, our staff has been cut by over 15% in an effort to meet the increasing mandates/bills sent directly from Albany. If the village did not buy a new pencil last budget cycle, just retained the status quo, taxes would have increased 5.5% because of bills from Albany.
The 2% tax cap was a great sound bite for a world that does not exist or for a public one assumed was not informed.
Adding insult to injury, the new tax cap freeze incentive only benefits communities who came to the game late and only recently began to consider consolidating and sharing services. Communities like Eastchester, Bronxville, and Tuckahoe who have been doing it for years will receive no credit for past efforts.
Again, in a poorly planned rollout, the current iteration property tax cap plan will prove to be a disincentive to consolidating any future services due to the fact that when a municipality consolidates services with another municipality its tax levy cap is reduced; however, this ignores the fact that the municipality still needs to pay another local government for the service.
The state powers that be must also recognize that there are very different types of local governments with very different needs that do not lend themselves to certain consolidations, be it a school system, police department, or 24/7 snow and ice equipment. The best interest of a community must always trump other political agendas.
The cap also does not exempt the cost of repairing aging infrastructure throughout the state, thus creating a powerful disincentive to do needed repairs that may not be visible to the taxpayer.
Before forcing municipalities to cut services and schools to cut programs, Albany needs to look inward and show leadership by cutting unfunded mandates with creative solutions.
For example, many states that truly care about their employees and want to create a sustainable pension system plan created a hybrid model, with a 401K-type model blended with defined benefits.
The New York legislature's solution was to create a Tier 6, which now requires any new hires to pay 3 to 6% toward their future pension. The problem is no one is hiring, rather reducing staff to meet the current pension burdens, and even if a new hire is added, the financial benefit will be achieved in twenty-plus years.
If the state government was truly serious about bringing property tax relief to local property taxpayers, they would begin by doing what every other state across the nation has done--pay for state and federal social service programs with state revenue, not county property tax and sales tax revenue.
In Westchester County alone, $225 million collected annually at the local level are paid to Albany for the state Medicaid program. Westchester County taxpayers could see $225 million in local tax relief immediately if the governor and the state legislature would only do what 49 other states have done already. That would be action, not a tedious and wasteful exercise. We deserve better.
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