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Alternative to Property Tax?

February 16, 2009 - John Stack
I work in the real property business. I often give talks to local towns halls to explain the real property tax. How it works, what it does, how your assessment affects how much you pay in taxes. Rarely am I asked about the merits of the real property tax itself I am not to push the merits of using property valuation, but to explain to taxpayers how it works. Even so, I have come to believe the real property tax is a valid tax, and one that is very stable. When incomes go up or down, the schools, the counties and the towns can still be sure of functioning because of its very structure. There is the argument that the property tax is somehow regressive. But, last I looked; no checkout tellers from Grand Union owned multimillion dollar homes on Upper Saranac, as well as not many millionaires lived in 2 room apartments in a basement. But, lately, I’ve been thinking about this.
            I’ve been complaining about how our publicly funded entities are all still getting raises. The most recent example is the correction officers, who just settled a contract last week.. Don’t get me wrong, I think the COs are probably underpaid if anything.(I say they deserve their raise more than the teachers) The county even said ‘if they hadn’t taken this contract, in this economic climate, they wouldn’t have gotten nearly this’. Who in this area is looking out for the taxpayers? Not the board of supervisors in Essex. Or the legislatures in Clinton or Franklin. Each of these has given raises as if we had no economic problems at all. At SLCS, the superintendent even said the economy never even came up during negotiations!
            I do have an option. Forget tax caps and the like. Maybe we should just fund these entities with income taxes. When it comes to a home, and real property tax, people really can’t afford to lose their homes. Often times, the economy tanks and houses increase in value (this time is an exception). But, the real property tax is very stable. Increase 10 percent, they still get it. But now, many people are out of work. The income for our 3 counties has probably decreased. Lets set the levy based upon an income tax rate. Incomes go down, like for New York State, and there is less to spend. The county or school wants to give a generous contract? Well, it won’t fall on the taxpayers in the form of increased real property taxes. There will only be so much money in the kitty. The raises will have to deeply correspond with major cuts and layoffs. Just in Saranac Lake, just the raise this year accounts for about $300,000, or probably about 6 positions. In Clinton County and Franklin County, I don’t think they have really recognized the goose laying the golden eggs – sales tax. The dollar is still so weak, Canadians are flowing over the border to Plattsburgh and Malone. What happens when the dollar gets string? That will be a hole to fill when the Canadians stop coming. Downstate, sales tax revenue is falling, even with higher rates. They are in a bind, mostly because locals just aren’t buying ANYTHING.
            Wait till we see the new tax rates for county and school this summer and fall. What do you think is going to happen?


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