Tax cap squeezes schools

Local News

July 6, 2011

By Joe Olenick Niagara Gazette The Niagara Gazette Wed Jul 06, 2011, 12:22 AM EDT

NIAGARA FALLS — Although they knew it was coming, school districts across New York state will have to tighten their belts even more, as Gov. Andrew Cuomo’s property tax cap takes effect with the 2012-13 school year budgets.

The governor was in Lancaster on Tuesday for a ceremonial signing of the property tax cap law. The law limits municipalities to raising tax levies by either 2 percent or the rate of inflation, whichever is lower. But local voters could override the cap with a 60 percent vote on the budget for school boards.

Cuomo signed the property tax cap law at the home of Ian and Jenny Martin in Lancaster. In a release from Cuomo’s office, it said the Martins pay more than $6,000 annually in property taxes, almost twice the median property tax bill in New York state. Cuomo said the law will provide meaningful tax relief to the Martin family and other homeowners across New York.

“For too long, New York families like the Martins have been forced to deal with out of control property taxes,” Cuomo said. “Many families and businesses have already left Western New York and this tax cap will help stem the tide and bring much-needed relief to taxpayers across the state. New York will no longer be the tax capital of the nation and this tax cap will go a long way toward revitalizing the state's economy.”

Cuomo’s office said the median U.S. property tax bill is $1,917, while in New York the median property tax bill is $3,755.

There has been praise for the law. The Business Council of New York State sent out a statement last week regarding the property tax cap law. The council said it believes limiting property taxes will encourage economic growth, especially in the private sector.

“The passage of a property tax cap is great news for all New Yorkers. It sends a signal to business leaders that the state is prepared to control the cost of government and begin to rebuild our private sector economy,” said Heather Briccetti, acting president and CEO. “We believe it will contain the growth of local government spending and ultimately make New York more affordable for homeowners and businesses.”

The Business Council said property owners in New York State paid $48 billion in property taxes in 2010, up 5 percent from 2009. In 2009 the increase from 2008 was 6 percent. Businesses paid nearly 44 percent of the total tax levy, which was $21 billion. Meanwhile, total real estate values in New York fell by 6 percent in 2010 from 2009, according to AOL Real Estate. That meant the average tax per $1,000 of true property values increased from $25 to $28 or 12 percent, the council said.

However, the Business Council did add that work remains to be done to lower the cost of government by providing additional mandate relief to schools and local governments and to bring down the tax burden on New Yorkers.

Under a 2 percent tax cap, school districts would be limited to raising their tax levy, the portion of revenue that comes from property taxes. School officials say that puts their districts in a tough spot, especially since they face costs they cannot control.

Starpoint Superintendent C. Douglas Whelan said limiting taxes needs to be done, but schools have a lot they do not control on the expense side of the budget.

“Something had to be done with taxes, they’re much too high in this state,” Whelan said. “But most of our costs are required.”

Besides unfunded mandates from the state, rural districts like Starpoint face unique costs like transportation, Whelan said. Starpoint has 115 square miles to cover, doing so with increasing fuel costs.

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