Understanding the Tax Cap

A property tax cap. Sounds good, right? That’s how the folks in Albany wanted it to sound. But, sadly, the property tax cap “so called” is nothing more than a political ploy to shift the focus away from state law makers and make county and local elected officials the “bad guys” for raising taxes.

Now, come to find out, the 2% cap is actually even lower. This year, counties, towns and cities across New York State will be faced with a 1.66% property tax cap as opposed to the 2% cap because the tax cap adjusts to the consumer price index which is now below 2%.

Now, make no mistake about it, we in New York pay way too much in property taxes. If you took my house and moved it to South Carolina, I would be paying almost half the amount in property taxes I do now. But this property tax cap “so called” is no cap at all, just a ploy by those in Albany, passing their problems down to the counties and cities.

It’s estimated that New York counties will loose between 20-25 million dollars in revenue because of the adjusted “cap.” This is done while Albany continues to send down mandates to municipalities all the while saying to do more with even less. They are also sending down less state aid to municipalities. Politicians in Albany get to say they are fiscally responsible for enacting a tax cap while local elected leaders are faced with paving roads, running police and fire departments, providing safe, clean water and a whole host of vital municipal services that thousands of residents rely on daily.

There are several provisions in the law that allow municipalities to exceed the tax cap. 60% of a governing body must vote in favor to override. In school district budget votes, 60% of the voters must vote to override. There are also several items that are excluded from the cap, those being capital costs for school districts, pension contribution increases that exceed two percent and others. There are also many factors that can raise your property taxes even with the cap. If there is a decrease in assessed property in a given year, your taxes could increase. If there is a change in assessment, your taxes could increase. What you ultimately pay in property tax is determined by the value of your property and your municipalities tax rate.

In drafting the law, along with the exemptions, the state created a formula that is as complex as an IRS worksheet. It is an 8 step formula which determins a municipalites tax levy limit. So, essentially, your taxes could go up 3.38% but still remain under the 2% “cap.” Make sense? Only in New York would 2+2 not equal 4.

So at the end of the day, what are we left with? We are left with a cap that’s not a cap as stated by the Governor himself. We are left with municipal leaders at the local level trying to accommodate yet another unfunded mandate, all be it a political one, so they won’t be labeled as irresponsible tax raisers by state lawmakers. And we are still left with property tax payers paying way too much as towns, cities and counties attempt to keep the level of services that those tax payers rely upon daily.

As we approach municipal budget season, these issues will be hotly debated all across the county and state. It will take courage and leadership to make the right choices that benefit the common good of the people. And, yes, we must do this while making sure that there is no undue burden to the taxpayers.

But, sadly, the property tax cap was not a solution to any of the problems that face the property tax payer or the municipalities.


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