October 4, 2008

Government was founded upon the principles of our constitution with the authority to govern derived from the people. The people therefore are the masters of their government hence the term, public servant. During the early days of our republic, the class of men who were trusted to administer government were statesman who understood this principle. Unfortunately,  statesman and women have given way to the "politician". This new breed of the governing class are defined by their ability to say nothing real about real issues. Even so, they span a continuum from hypocrite to reformer. The only factor that will determine where the politician falls on this continuum is the voice of the people.   

A new Census Bureau report released last month found that New York state still has the highest property taxes in the nation. Westchester County residents pay the highest with a median of $8,422 in property taxes. Nassau County which was previously the 2nd highest, moved to number three with a median $8,153. By comparison, the nation median is $1,838.  In January of this year, recognizing the crushing burden of property taxes facing New York residents, then Governor Spitizer established a commission to determine the root cause of excessive property taxes. County Executive Tom Suozzi was appointed to chair this commission, The New York Commission on Property Tax Relief. He was directed to produce a preliminary report in May and a final report in December.

In June, the Commission released it's preliminary report which called for a school tax cap of 4% or 120% of the Consumer Price Index (CPI) what ever is less. Under the plan, if the local school district stays within the cap, there is no need for voter approval. If the district seeks to exceed the cap, they will need voter approval of 55% or if state aid is increased by 5% or more, the requirement for passage would rise to 60%. There is also a provision to petition for an under ride vote to keep the increase below the tax cap limit. The second provision is a "circuit breaker" proposal which would provide "targeted relief" based on income. This proposal would replace the current tax relief program, STAR which now provides property tax relief without an income restriction. Beginning in 2006, the STAR program was expanded to also include a rebate check with the later based on income.

While the tax cap proposal is a good start, the primary basis for the crisis is still being ignored, spending. The proposal to cap school taxes at 4% is too high. In just five years, school taxes would rise by 20% or 40% over ten years. A more realistic percentage would be 2.5 or 3%.  The real concern is the amount of state spending via state aid. With no limitation, school district spending would continue to rise and the cost will be borne by state taxpayers who pay some of the highest taxes in the nation. As to the "circuit breaker" proposal, it would exclude any meaningful relief for the majority of Nassau residents who have higher property values based on their assessments and those who generally have higher per capita incomes compared to other areas of the state. 

It has been widely reported that 60% of the average property tax bill paid by Nassau residents is for school taxes and the remaining 40% for local government. Even so, the latter is still a significant portion. It is therefore imperative that local government also address spending.

On September 15th, less then one week after acknowledging that local property taxes are crushing Nassau residents, County Executive Tom Suozzi submitted his proposed 2008-09 budget which calls for a 3.9% property tax increase. While the budget calls for the implementation of a modest amount of cost savings, there is no serious effort to avoid a property tax increase. His proposal to increase property taxes certainly calls into question his credibility. The question is, where does Tom Suozzi fall on the continuum? Hypocrite or reformer?

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