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State must do its part on property taxes

November 17, 2011
Editorial by the Adirondack Daily Enterprise: Publisher Catherine Moore, Managing Editor Peter Crowley

When the state Legislature and governor enacted the 2 percent property tax cap in June, they were promising to work on the longer task of relieving local governments and schools from unfunded mandates - requiring local entities to do expensive things and making them pay for them, too.

The tax cap happened, but not mandate relief, and now it doesn't seem to be much of a priority in Albany.

"I think mandate relief is a work in progress," Gov. Cuomo said Nov. 1, according to the Associated Press. "We made progress on the mandate reliefs this past session, some would say not enough. We'll do it again."

That's pretty lukewarm compared to what he said in his campaign platform last fall: "To provide a high-quality education and local government services at a more affordable cost, school districts and localities must be given the ability to rein in costs in a way that is made almost impossible today by unfunded state mandates.

"We will immediately move to eliminate unnecessary mandates."

Now, in the thick of a town and county budget season made contentious by the cap, we hope "immediately" comes soon - preferably before school districts start working on their budgets this winter. If not, we hope the state steps up with some decent funding for schools - funds fairly extracted from state income taxes, not local property taxes. If neither of those things happens, many districts will ask their voters to override the cap and the spirit of the cap will be weakened. (With schools, a 60-percent popular vote is required to override, whereas with municipalities and counties, the supermajority vote comes from the boards.)

The point of the cap was to reduce property taxes, of course, but while Albany politicians blocked local governments from raising property taxes indiscriminately, they aren't blocking themselves from doing the same thing.

Any government body big enough to manage taxation via income and sales should do so, since these avenues are inherently based on ability to pay, while one's property ownership does not correlate with whether one makes enough money to afford taxes on that property's current market value. Real estate is one of the few things you can own that gets taxed every year, not just once when you buy it. Maybe someday we'll see the end of taxation based on property. But until then, local governments that can't manage income or sales taxes will resort to taxing property.

(As we've said before, counties would be able to manage better under the cap if Gov. Cuomo would stop blocking them from raising their sales tax rates to match those of other counties.)

The state, which taxes income, sales and other things, should stay away from property taxes, but it doesn't. The same New York Legislature that passed the property tax cap is the cause of much of one's property tax bill through unfunded mandates.

Medicaid is one big example. It's a federal program that splits costs with the states, but New York does something different: It dumps a big chunk of the cost on its counties, which have to dump a lot of that cost on property owners. A bill that would have the state take over Medicaid entirely is stalled, but we hope it gets unstuck.

Pensions are another example. The state guarantees generous retirement benefits for municipal and school workers as well as its own, and it makes small government entities help feed the pension fund's appetite. New York's high level of pension guarantees comes largely at the bidding of politicians' allies in public employee unions, to whom Republicans as well as Democrats feel deeply indebted for bankrolling their election campaigns. Spreading the cost around to schools, counties and municipalities helps disperse taxpayers' complaints, keeping them at thousands of local budget hearings where state lawmakers can more easily ignore them.

The tax cap is still good overall since belt-tightening is needed at the local level, but the goal of controlling property taxes could be met a whole lot easier if state lawmakers did their part. We hope our area's three representatives in Albany, Sen. Betty Little and Assemblywomen Janet Duprey and Teresa Sayward, will lead the way on this important issue.



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