With four weeks left in the legislative session, the New York State Association of Realtors is making a $750,000 push to get Gov. Andrew Cuomo’s version of a property tax cap passed.
The property tax cap debate has been going on for years but has picked up steam in recent months as the state looks for ways to give its residents relief from some of the highest taxes in the country. In February, the New York State Senate passed a bill that would cap property taxes at 2 percent but would allow residents to override the cap with a two-thirds majority vote. With only five weeks left in the legislative session, the Assembly has yet to even bring the bill to the floor, although House Speaker Sheldon Silver, D-Manhattan has said it will.
Cuomo’s People’s First tour has been making stops around the state touting his legislative priorities, of which his top three are ethics reform, marriage equality and a property tax cap.
`After the governor and the legislature passed the budget to try to address that large budget gap of $10 billion, the next logical step is the tax cap,` said NYSAR Director of Communications Salvatore I. Prividera Jr. `That will force mandate relief, which we do support because the money won’t be there. They’re going to have to deal with how they provide those services.`
Will cap drive mandate relief?
Where the discussion currently stands is what sort of effect the tax cap would have on school districts in the state. Many area school officials have argued that if a cap is passed, coupled with continuing state cuts to education funding, instructional programming will suffer.
As an argument has been made that passing a tax cap before supplying mandate relief would be too painful for schools, but NYSAR Governmental Director Mike Kelly said feeling that pain would drive mandate relief.
`Realtors support good schools, as a matter of fact, we do,` Kelly said. `They are extremely important to people when they make important decisions in purchasing a home. Why do the taxes that are supporting our schools have to be 78 percent higher than the national average? They don’t have to be. We have to make some changes. So let’s make some changes to address that and still provide good schools.`
Carl Korn, spokesman for the New York State United Teachers, said districts have already made changes, and most district budgets kept tax increases in line.
`In fact, spending increases this year were less than one percent,` he said. `That’s the lowest ever documented.`
School boards have eliminated programs and have laid off teachers and staff to control spending in their districts, Korn said, but with a total of $3.2 billion total in state education cuts over the past three years, the burden has shifted to the taxpayers.
`Campaign for Fiscal Equity sued the state and alleged the state had violated the constitution for failing to fund public schools properly,` Korn said referring to a 2003 case. `It went its way through the courts and [former Gov. Eliot] Spitzer settled and the state had to spend $4.7 billion more to settle the court case. They’ve violated the court order; they’ve cut back state aid by more than $3 billion.`
It was an issue many superintendents stressed could potentially be a problem for the 2012-13 budget season. South Colonie Central High School Superintendent Jon Buhner said it is frustrating to watch politicians cut billions in aid while nothing is being done to relieve districts of the burden of unfunded mandates.
He said he doesn’t view the budget as balanced based on revenue and cuts ` all he saw was cuts.
`Look across the state. This year it was more difficult because of massive cuts to state aid,` he said. `Most schools were near or below the property tax amount. This year we’re projected at 2.93 and last year had something similar, but we came in much lower. Schools have been in that range regardless because they know it’s the right thing to do.`
Bethelehem Central School District Superintendent Michael Tebbano criticized Cuomo for promoting the creation of a mandate relief commission without ever seeing anything from it. And now the governor is continuing to go around promoting the tax cap. He even listed some of the unfunded mandates he said don’t make any sense.
One of them is a mandate that requires school districts to transport a child to a private school that is within 13 miles of the school district. Tebbano said it is a waste of money and time since within just five miles, there are perfectly fine private schools.
`If parents are that needy of private education, they should assume the cost,` he said, along with questioning as to why it is 13 miles. `It’s a legislative give to constituents. It has nothing to do with maintaining the educational quality of a school district.`
He also said the Department of Commerce and the Department of Health have a wellness policy that places further mandates on a school’s nutrition program and there is also heavy restrictions on school nurses. All of this, he said, is just everyone trying to tell districts how to run its schools.
`They’re not giving us any money, they’re just telling us to do it,` he said. `I keep asking why do we have to do it without all of that funding.`
Homeowners feel property tax pain
NYSAR’s main concern is that people are increasingly not able to afford the property taxes on their homes, something that particularly affects seniors who are living on a fixed incomes while their taxes continue to rise each year. And with a recent Siena Poll showing that 86 percent of the people responding said owning a home is part of the American Dream, Prividera said, and eight out of 10 residents in New York are calling for property tax relief.
With only four weeks left in the current legislative session, the issue of a tax cap is being pitted against marriage equality and ethics reform. Despite competing priorities, Kelly said recent polls show that a tax cap remains on top for most residents.
On May 19, a Siena College Poll revealed that 71 percent of New Yorkers hold a tax cap as a higher priority over the other three issues. Ethics reform came in second.
Miguel Berger, vice president of NYSAR for the Capital Region and president of Better Homes and Gardens Real Estate, said he often hears the complaint that people can’t afford their homes. He said the problem comes from the fact that the state has been paying `with an open checkbook,` and a property tax cap is a way to curb that spending.
`How is this place going to look in 10 years?` he said of New York. `How is the landscape of the housing market going to look in 10 years if people can’t afford it?`
Lawmakers, educators weigh in
Assemblyman Bob Reilly, D-Newtonville, said he realizes the assembly has not been fully supportive of the property tax cap legislation. He said the bill is currently in negotiations, with Cuomo and Sen. Dean Skelos, R-Rockville Centre, willing to give it a second look. But Reilly said the important discussion is not the three legislative pieces Cuomo has been pushing, but the negotiation between the state workers’ unions and Cuomo.
`That’s going to set the stage for pension benefits, wages and health benefits in the future,` he said. `When you look at school districts and local governments, the largest expense is pensions and health care. Those are the areas that have to be addressed.`
He said that he would support a tax cap that sunsets in two or three years.
Proponents of a tax cap have also pointed out that businesses are hurting, since 60 percent of the taxes that are paid are property taxes. Colonie Chamber of Commerce President Tom Nolte said that many of the business people in Colonie are homeowners as well. But his main concern is the survival of many of the small businesses, which he said face `the brunt of new taxes.`
`I think it’s a step in the right direction,` he said of the property tax cap. `But I think we have a long way to go. I feel the effort is being made to sort of listen to the small business person that hasn’t always been there.`
Nolte, who has kids in the North Colonie district, praised Buhner and North Colonie Central School District Superintendent Joseph Corr for the work they did on their 2011-12 budgets. He said they have already started a dialogue on how to address the rising costs without affecting programming too much.
`I give them a great deal of credit for being ahead of the curve of things like that,` he said. `I want them to be able to look at the overall budget and find ways to provide those things in lieu of possible cutbacks. It’s not easy, but this is what small businesses have gone through every day since they’ve been opened.`
Jennifer Pfaffenbach is a social studies teacher at Shenendehowa High School and a homeowner and parent in the southern Saratoga County district. She said understands that many people are averse to paying high taxes, but she said she has no problem paying them because it brings results.
Even though New York State is ranked 34th in educational achievement, she said that it’s hard not to take into consideration what effect Downstate has on that ranking.
`Sometimes low taxes in states don’t yield the results that people think they’re going to yield,` said Pfaffenbach.
Critics of teachers have said the pensions and benefits they receive are not realistic during the current economic state. Pfaffenbach said it is hard to be a teacher during this time. She said she understands why people would look at teachers and vote against the budget, but she doesn’t think they’re getting the full picture. If teachers were to have taken a pay freeze, with the step increases, she said they would lose a significant amount of money.
`I know how hard I work,` she said. `I have a conference call with a colleague at 3 p.m. on a Sunday to go over a lesson plan. I really feel like we’re deserving of the pay we get. I really think the teachers are taking the blame of what the bankers did seven years ago.`
Tebbano said that his entire district took a pay freeze, including teachers. But it still had to close Clarksville Elementary School and cut back on 20 staff positions including support staff, teachers and one principal.
`The reality is, you can’t depend on that every year because you’re asking employees to work without taking in the cost of living,` he said.
But there already is a check on taxes in place, Korn said, and that is the district budget voting process. With 93.5 percent of the state’s school budgets passing, he said, that is proof residents agree with how the district is being run.
`A democratic vote chooses what it wants as opposed to what Albany imposes,` he said, adding that voters see a tax cap as just political fodder. `It’s a political gimmick that won’t solve the problem.“