Property Tax Reform

New York State suffers from some of the highest property taxes in the nation. As the Chair of the Committee on Real Property Taxation, I am committed to working on solutions which will lessen the tax burden on New Yorkers.

Circuit Breaker
As local governments continue to rely on property taxes as their main source of income, New Yorkers are facing sky-rocketing real property tax bills. This is resulting in the very real threat of default on property taxes or forced sale of home for taxpayers across the state.

I have introduced bills to address the high property tax rates in New York State. My circuit breaker bill, A1941, would control property taxes by establishing maximum residential real property taxes in relation to personal household income. Section 1 of this bill amends Section 606 of New York State Tax Law to provide for a real property tax credit based on household income and the percentage that a household pays for all real property taxes.

For the City of New York and the counties of Nassau, Suffolk, Rockland, Westchester, Putnam, Orange and Dutchess households which make $120,000 or less would receive an income tax credit of 70% on property taxes paid in excess of 6% of the household income. Homes with household income ranging from $120,001-$175,000 would receive the income tax credit on property taxes paid in excess of 7%. Households which make $175,001-$250,000 would receive the same income tax credit for property taxes in excess of 8%. Households making more than $250,001 would not receive this income tax credit. For all other counties in New York State the same 70% income tax credit would be available on property taxes paid in excess of 6%, 7%, and 8% but the qualifying income ranges are $90,000 or less, $90,001-$150,000, $150,001-$250,000, and $250,001 and above respectively.

To qualify for this income tax credit, each taxpayer must live in his/her home for no less than five years and the home must be the main residence. Also, residents would continue to be eligible for the Basic and Enhanced STAR exemptions on their school taxes.

Shared Services Equals Shared Savings
As a way to lessen the burden passed on to taxpayers, many municipalities have entered into shared services agreements throughout New York State. These agreements have resulted in millions of dollars in savings for taxpayers. I have introduced legislation, A6266, which will give school districts more flexibility in providing non-educational services more efficiently by working in cooperation with municipal governments. This bill allows school districts to be included in the types of corporations and districts which are allowed to enter into shared services agreements by amending Subdivision 1 of section 119-o of the general municipal law. The inclusion of school districts in these types of agreements will allow for both the municipalities and school districts to pass on the savings to taxpayers within the school district.

Unfunded Mandates Burden Local Municipalities
All too often the state will impose program and service requirements on local governments without realizing the fiscal impact of these requirements. These unfunded mandates require municipalities, which already are experiencing budget shortfalls due to the recent economic crisis, to rely on property taxes and regressive sales taxes to fund these new mandated services. I have introduced legislation, A5459, which would require the state to include an appropriation to cover reasonable and necessary costs with bills that would have an impact of $10,000 or more on one locality or more than $100,000 in total. The appropriation can be overridden after a public hearing and a three-fifths vote of both houses. The state, with its ability to utilize a wide tax base, is in a better position to fund certain required services. This will shift the burden from local municipalities and allow for the easing of property taxes in a given region.