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Majority says property tax cap not a success

Rochester Business Journal
May 3, 2013

More than 60 percent of respondents to this week’s RBJ Daily Report Snap Poll disagree with Gov. Andrew Cuomo’s assessment of New York’s property tax cap as a “tremendous success.”

In reports filed recently with the state comptroller, more than 18 percent of counties, cities, towns, school districts and fire districts statewide said they plan to override the property tax cap in 2013. Last year, roughly 15 percent said they planned to override the cap.

Cuomo introduced property tax cap legislation soon after taking office in 2011, and the state Legislature passed it in June of that year. The law limits growth in the property tax levy to 2 percent or the rate of inflation, whichever is less, with some exceptions. Communities can override the cap with a 60 percent majority of a governing body for local governments or 60 percent of those voting on a school budget.

Last fall, Cuomo termed the cap a “tremendous success” and said it had held average property tax growth to 2 percent—40 percent less than the previous 10-year average. Nine percent of Snap Poll respondents agree strongly with Cuomo’s assessment; nearly one-third “agree somewhat.”

This compares with 37 percent who disagree strongly, and 22 percent who disagree somewhat.

Supporters say the cap is necessary because the local property tax burden in New York is highest in the nation. When Cuomo took office, the average paid by a homeowner in New York ($4,090) was twice the national median ($2,043), his report states.

Critics say the cap was not needed—because average levy increases already were moderating—and should be tied to mandate reform.

Roughly 380 readers participated in this week’s poll, which was conducted April 29 and 30.

Gov. Andrew Cuomo has termed New York’s property tax cap a “tremendous success.” Do you agree?
Agree strongly: 9%
Agree somewhat: 32%
Disagree somewhat: 22%
Disagree strongly: 37%

COMMENTS:

It’s not working because the local communities, like Webster, have been overriding the 2 percent each year, so there really is no change from before. It’s kind of a joke—a bad joke on the taxpayers.
—Fritz Odenbach, the Dolomite Group

There are too many loopholes and exemptions that allow taxing entities to increase taxes higher than 2 percent. For example, the school district in which we live is calling upon voters to approve a 5.33 percent increase this year. If Gov. Cuomo wants to make a real difference, he’ll enact a law that imposes an across-the-board mandatory 2 percent tax decrease every year until New York is no longer the laughingstock of the rest of the country.
—Lester Wilson, Syracuse

The tax cap was sold to the state as working to lower tax rates—without impacting services, as a result of lessened unfunded mandates. Except the mandates didn’t lessen. The schools and local governments were sent up the river, forced to either cut back on services or vote to violate the cap. If the mandates had been cut first, then the cap wouldn’t have been needed at all, because the local governments and schools wouldn’t need the extra money.
—Matthew D. Wilson

Frankly, I think it’s way too early to tell whether the cap has achieved anything. The other side of the cap was supposed to be a reduction in “unfunded” mandates. Well, that hasn’t happened.
—Jerry Lighthouse, Advanced Purchasing Technology

Please, this was a no-brainer by a pandering-to-the-voters politician. He should figure out a way to reduce property taxes by 2 percent a year until we’re at a competitive level nationally.
—Dom Pullano

Do your bills go down if your income is capped? The tax cap is a disastrous plan. With a limited amount of flexibility, suburban school districts and local governments will be forced to continue to cut vital services and employees until they can no longer fulfill their intended function. Taxpayers will pay small increases but eventually will suffer serious diminution of services. All of us depend on well-educated students and efficient government. “Starving” them of money can only destroy both school systems and local governments.
—Lola Kelly

I understand that the property tax cap has been a failure due primarily to New York State mandates. The Yates County tax rate had a double-digit increase for 2013, far from the governor’s 2 percent “cap.” After careful review by many citizens, it was found that almost all increases were driven by state pension, Medicaid, social services and employee health costs.
—Craig Densmore, Penn Yan

It and the more recent SAFE Act were both hastily and poorly written. I question the quality of our elected officials and those they seek out to compose new legislation. This is not a new problem. Everything they seem to do is fraught with legal problems and is poorly thought out when viewed by even the casual observer. They are a sorry lot, indeed.
—Dave Scudder

Cuomo keeps announcing “success” as if saying it over and over will make it happen. The cap is really not a cap at all; it is at best a barrier to higher taxes, but not a very high barrier. Worse, to impose a “cap” without dealing with mandates is almost meaningless. New York is still the highest-taxed state in the nation, with the most anti-business government (although, Illinois and California are competing with us on that one). To claim the cap has been a success and “New York is Open for Business” is false advertising.
—Bob Sarbane

It’s better PR than substance.
—Damian Kumor

In my business, I receive papers from all over New York. I see story after story of school districts, towns and other municipalities that are overriding it. No, I do not think it is working.
—Michael Knox

Stats lie. Cap is on tax levy, so rates increase beyond 2 percent with many loopholes. Growth in property values allows much more tax than people think.
—Wayne Shipman

The tax cap only limits the tax levy, which is the total amount of property taxes collected. Even if a levy is limited to a 2 percent increase, a tax bill could show an increase of more or less than 2 percent. That’s because the bill is determined by the tax rate, which isn’t limited by the tax cap law. Also, certain costs are excluded from the cap: pension expenses, capital expenditures and litigation liability awards.
—James Lieb

The property tax cap is a political ruse that does nothing to help overtaxed New York residents. It simply caps the amount of tax government adds to our already high property tax burden. Gov. Cuomo has done nothing and proposed nothing to lower property taxes. A cap that limited total property tax to no more than 1.5 percent of the true market value of residential and business property would do more to stop New Yorkers from moving to low-tax, business-friendly states.
—Michael Caceci, Pittsford

Does pushing on a balloon do anything (other) than create a dimple and expand the balloon elsewhere? We need serious spending cuts to allow for meaningful tax reduction in order to stop driving people and businesses out of New York.
—Keith B. Robinson, Diamond Packaging

Something had to be done to slow down school districts among other government entities, and this is an initial first step. We still need to do more.
—Peter Bonenfant

As long as Albany keeps pushing mandated programs on the local towns, villages and school districts, each in turn will have to override the cap to balance their budgets. Taxes here in New York are still on the top end, compared with most other states.
—Al Kempf

More entitlement cost-cutting needs to be done in Albany, along with pension and tort reform. If they don’t address pension and tort reform, we’ll never get out of this mess.
—Mark Wolcott, Rochester

While most people agree taxes are too high and growing too quickly, this program is a failure. What is does is give the state more control over the local governments, taking power out of the hands of the local voters. This is because the state has numerous mandates which it fails to fund, the state school aid formulas are subject to political whim, and the impact of fuel and wage increases on the budget. Wages are the primary expense, and many contracts call for greater than 2 percent raises. The math does not compute. The state should focus on its own fiscal house, which is sorely in need of work.
—Deb Gleason

A tax cap provision will never be successful as long as local government has the option to override the provision. Most local municipalities have voted to override. Another significant problem is the state enacting a tax cap without any relief on mandates made to local governments. In Albany, as always, it is business as usual and it is usually bad.
—Dave Sliney

We must cap spending but need to focus on other areas that are budget busters. Medicare and Medicaid are prime examples. New York is especially burdened.
—Don Dorschel

The “2 percent tax cap” may have been well-intentioned but was likely more of a political ploy. If anything, it raised people’s awareness. What is really needed is structural reform that weak politicians are afraid to make. The Triborough Amendment needs to be repealed, public employee labor contracts need to truly “expire,” and new ones negotiated based on today’s economic realities. Savings need to be found! When the average civil servant’s salary is higher than the average taxpayer who is paying that salary, something is wrong.
—George Thomas, Ogden

A “success” simply in the fact that local jurisdictions do not assume they have a blank checkbook of the taxpayers, but without meaningful mandate reform from the state we have just created another problem. The goal is to lower our property tax burden, and until we see that “success” is a relative term.
—Peter Short

The heck with the cap—it is just a license to raise taxes. And they got you to agree to it! Check this out: Find an amortization calculator and plug in $100,000 as a loan over 25 years at 3.5 percent interest. Got it? It should come out to approximately $500 a month. So if you pay $6,000 a year in property and school taxes, guess what! That's $500 a month (or $6,000 a year). So the government gets to charge you that forever and wants you to feel like costs are under control! On top of your mortgage. You gotta' love it! Even when you pay off your mortgage, Uncle Sam keeps on collecting. But don't worry, your rate isn't fixed with Uncle Sam—he gets to raise it 2 percent a year and you say "thank you." Andrew Cuomo considers this a "tremendous success.” It exemplifies Andy's favorite mantra: “New York, Open for Business!” I think they have the definition of a free man owning his own property screwed up. Who is worse, the bank or the tax man? Wake up, “sheeple.” The government makes more money on a pack of cigarettes than "big tobacco" does. The government makes more money on a gallon of gasoline than "big oil" does. The media and politicians would have you think the banks, oil and tobacco are taking advantage of you. Really?
—Lou Romano

How in the world could it be considered a success? It’s only part of a comprehensive plan. What good is a new 75 MPG engine if it's driving on four flat tires? Without mandate reform, the property tax cap just makes local life miserable—the governor knows this but has one eye on New York and another on Washington. “A double-minded man is unstable in all his ways.” James 1:8
—Steve Wichtowski, Honeoye


Maybe it is working because the local communities knows they have a restriction, so they will actually fight mandates and the other levels of government now have to listen. The ball is rolling uphill, but it is rolling.
—Bill Lanigan

The counties have been forced to fund certain programs that grow each year much more than inflation. Public employee pension plans have been allowed to expand far beyond private pension plans, Child Protective Services the same. Medicaid, the costliest unfunded mandated program would not be as costly had New York State not made it the Rolls Royce of the Medicaid programs across the nation. New York State claims to be taking some of the (burden) off the shoulders of the counties, but people fail to forget that the state gets its money by looting our pockets elsewhere. So whether there is a 2 percent cap or not the money will need to be gotten elsewhere and that is from productive businesses and we the people. Ultimately, spending is the problem. Until New York State, the counties, towns and cities begin to reign in that spending taxes will go up somewhere to compensate. The property tax cap is nothing more than smoke and mirrors. The money government spends must come from somewhere and that somewhere are the taxpayer.
—Michael F. Kloppel, chairman, Ontario County Conservative Party, Canandaigua

Truthfully, HOW would the readers REALLY know when we cannot trust our news media to tell us the truth?
—J.A. DePaolis, Penfield

The property tax cap is but a cruel joke. Taxing entities have simply voted to overrule them and the tax rip-off continues. The locals blame state mandates, and the state blames local for not controlling costs. And the unintelligent idiot taxpayers accept both arguments and praise the underhanded liars that make up the state government.
—Jim Weisbeck Bloomfield

5/3/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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