If enacted, the Property Taxpayer Protection Act would limit the property tax burden on homeowners and businesses by providing school district mandate relief, reducing county Medicaid costs, strengthening financial accountability over school tax dollars and promoting local government efficiency.

ASSEMBLYMAN McDONOUGH’S PLAN
“The Property Taxpayer Protection Act” (A.8775)
Limiting the Property Tax Burden on Homeowners and Businesses

New York’s per capita property taxes are 57% higher than the national average and school property taxes are a major contributor. The focal point of the Property Taxpayer Protection Act is to combat the school district tax burden of homeowners and businesses by:

• Preventing school district property tax levies from increasing by more than 4% each year or the rate of inflation, whichever is less, and providing voters with the ability to override this limitation by a 2/3 majority vote.

Modeled after Massachusetts’ successful “Proposition 2 ½,” the Property Taxpayer Protection Act looks to achieve similar results. While Massachusetts once had the highest property taxes nationwide, the adoption of measures like the property tax cap has lowered their rank to 32nd. More importantly, limiting the growth of property taxes in Massachusetts has not endangered their education system, as they currently have one of the top five educational systems in the nation.

School District Mandate Relief

State mandated programs place local taxpayers and governments in the difficult position of paying for services that they have little or no control over. This section of the act would:

	Require any state mandate that is imposed on a locality and costs more than $10,000 annually, or $1 million statewide, to be funded by the state
	Require the fiscal impact of legislation to be stated prior to a bill being voted upon by the Legislature
	Provide 100% reimbursement to schools for the costs incurred from 4th and 8th grade Math and English tests, starting in the 2008-09 school year, and
	Consolidate school district paperwork requirements, saving time and money.

Lower Property Taxes by Reducing County Medicaid Costs

According to the New York State Association of Counties, Medicaid costs consume the largest portion of county budgets, and in some cases, the cost of providing Medicaid services is greater than the amount of property taxes collected. In addition, Medicaid waste, fraud and abuse cost New York taxpayers billions annually. The Property Taxpayer Protection Act would:

• Require the state to take over the costs of all optional Medicaid services within 5 years, saving $10 billion, and

• Provide funding for counties to buy software that will assist them with Medicaid fraud investigations.

Strengthen Financial Accountability Over School Tax Dollars and Promote Local Government Efficiency

New York has some of the best teachers, administrators and schools. However, misuse of school dollars continues. This section of the Property Taxpayer Protection Act supports the strengthening of accountability over school tax dollars by:

• Creating an Office of State Inspector General for Education that would investigate financial abuse, corruption and misconduct in schools, and

• Encouraging the consolidation of local services by providing $30 million in Metro-STAR grants to research the efficiency of mergers or consolidations of local government services that will help to reduce the tax burden on homeowners.

Encourage Insurance Pooling

The pooling of health insurance spreads the cost for health care across a greater number of participants, and the greater the number of participants, the more stable the average cost per user becomes. Governmental employees’ health care premiums are frequently paid by the employer (taxpayers); by allowing local and county governments to pool health insurance contributions, it will save taxpayers in the long run. The Property Taxpayer Protection Act would:

• Support the local option of insurance pooling to cut costs.