Not All Property Tax Relief Is Created Equal

On June 11th, NYS Assembly Minority Leader Jim Tedisco wrote to us, asking the Geneva City Council to pass a resolution supporting the NYS Property Taxpayer Protection Act. The supporting resolution he enclosed begins,

“Whereas, the tremendously high property tax burden on New York families and businesses is the number one issue facing our community today, and the sheer cost of living in New York has forced many residents and businesses to leave, thus slowing the economic engine of the state; and

Whereas, young people are finding it difficult to purchase homes, seniors are struggling to maintain their homes, and businesses are facing immense challenges to create and retain jobs; and

Whereas New Yorkers face the highest property taxes in the nation…and the State must act now to thwart the detrimental effects that high property taxes are having on local governments…”

At first glance, we found it compelling. It makes the same argument we have made during the last few budget cycles about the effect of our tax rate on local economic development. It highlights the negative impact on services, home equity, and job growth that we have tried to bring to light. In short, it seems downright sensible.

However, the legislation has a fundamental flaw. It does contain many important, on-the-mark provisions (such as reimbursing schools for mandated testing costs, providing incentives for local governments to work together, restricting unfunded state mandates and targeting Medicaid fraud) but, the focus of the bill is two taxes: County Property Tax and School Tax.

So what’s wrong with that? Well, the fundamental property tax problem in most Upstate cities, including the City of Geneva, stems from the local property taxes. In one of our postings on taxes, we showed that Geneva’s school taxes are not the highest in the county. And the Ontario County property tax is on the decline. What a great thing!

It’s cities and villages that continue to raise taxes as a way of raising revenue for services that they often provide beyond their own borders. For instance, the City of Geneva and the City of Canandaigua provide municipal water and sewer services that are used by both City and Town residents, respectively. If you look at the costs for maintaining those systems, and compare them to the usage rates, the Town users get the same service at a largely discounted rate.


Geneva and Canandaigua are not alone in this predicament. It is the challenge facing almost every city in New York State. You might ask, “Isn’t county and school tax relief better than no relief at all?” Let’s take a look. Right now, County taxes make up a small percentage of your total tax bill, compared to your city and school tax. If the County tax is lowered, you’ll see some savings, but so will all other county residents. That means that your tax bill might be a bit lower, but not by comparison to people living in areas without a local tax. And the more taxes go down in surrounding areas, the more sprawl we will see. With sprawl comes an increased need for services (like water and sewer) and an increased burden on city resources.

So, while we certainly support efforts to eliminate fraud, waste, and other abuses that drive up property taxes unnecessarily, this is only one part of the long term solution. People will continue to leave Upstate if the core cities, like Geneva, don’t see a reinvestment that creates the housing and job climates that people want and need. Tax relief at the county level makes the tax burden in cities even more pronounced, which encourages the suburban sprawl that is causing the problem. This county-focused effort, on closer examination, is too much of a ‘quick fix’ that will make the problem worse in the long run.