Excelsior! We Come By Our State Motto Honestly

The state motto (excelsior = “ever upward”) seems to fit the current tax situation across New York. And according to this report in Newsday, the Commission looking into a cap on property taxes (see our previous post on that effort led by Nassau County Executive and former gubernatorial candidate, Tom Suozzi) will not release their report on schedule, but will delay it a few weeks.

We think the delay is understandable. After all, shortly after the Commission’s work got underway, their appointing officer (Eliot Spitzer) resigned as Governor and things became a little disorganized across the Empire State. But now Governor Patterson appears to be settling into his new role, and it’s time to get back to the business at hand.

Through hearings on the issue, it appears that the report has narrowed its scope from examining high taxes in general (including school, county, and municipal tax levies) to focusing mainly on school taxes. We can understand how, in most communities, the school tax levy, and the yearly increases, get the most attention. But school taxes are the taxes most directly determined by the people. Each year residents of the district get a chance to vote the school budget up or down, that’s in comparison to county/city/village/town taxes that are determined by a board of legislators that are elected every few years.

Whether a tax cap is a good idea, for school districts or anyone else, is not the topic of this post. We’d have to know what’s being proposed before we can evaluate it, but we hope that more attention will be given to factors that contribute to the local government portion of people’s property tax burdens. We pointed out in a previous post that the Geneva City School District does not have the highest tax rate in the County. But, amongst municipalities, the City of Geneva’s rate is the highest. Tax bills have several components, there is the Ontario County tax (still under $7 per $1000 of assessed value), the city tax rate (for Geneva or Canandaigua) or a town or village rate plus various fire districts or water or sewer districts, and then there’s the school tax. If you look at the school tax as a percentage of total taxes paid, Geneva’s is much lower than other Ontario County cities, towns, and villages. Take Canandaigua as an example. Their City tax rate is $6.19. The County rate is $6.35. Their school tax rate is $17.77. So their total tax per $1000 of assessed value is roughly $32. Of that, the school tax represents about 55% of the bill.
By comparison, Geneva’s city tax rate is over $18, and the school tax is $20. Plus the county tax of $6.35 brings the amount of tax per $1000 to about $45. That means that the Geneva City School District represents only about 44% of city tax payers’ bills.

We point all of this out because it seems that the Tax Cap Commission and the Commission on Local Government Efficiency seem to be converging on the same problem, though we’re not sure anyone from either commission has acknowledged it: New York State’s communities, particularly Upstate cities, are disproportionately burdened by a property-based tax system. Cities provide all of the amenities that make communities worth living in: parks, downtowns, churches, schools, public safety, public facilities. But all of these properties are, according to NYS law (and/or federal law), tax-exempt. Yet, these same cities are expected to support and maintain all of these amenities through property tax levies.

So, our conclusion, regardless of what any report says, is that the property tax system itself--whether it’s for schools or counties or cities or towns or libraries or whatever--is outdated, unfair, and driving people and businesses out of the state. It’s time for government to start rethinking the way it raises money to carry out the very essential functions we all rely on.