New York Gov. David Paterson yesterday called on state lawmakers to pass a cap on property taxes by the end of the legislative session this month.
"We have to implement a property tax cap now," Paterson said. "The property tax cap is a blunt instrument, but it forces us to make hard choices. It will force us to save our state from the peril that looms in our future if we don't act."
Paterson's proposal would cap school property tax levy increases at 4% or 120% of inflation pegged to the consumer price index. School districts could override the cap if 55% of the voters approved, in certain circumstances. If school districts increased property taxes by less than 4%, they would be able to save up to 1.5% of the unused tax levy growth for a later date.
The proposed legislation would apply to all school districts outside New York City, Buffalo, Rochester, Syracuse, and Yonkers. High property taxes are driving residents and businesses from the state, the governor said.
The legislative proposal was announced as Paterson accepted a preliminary report by the New York State Commission on Property Tax Relief led by Nassau County Executive Tom Suozzi, which recommended numerous proposals including the property tax cap.
"We cannot continue to demand that our residents and homeowners pay these increased property taxes above this capped amount - it is unsustainable," Suozzi said.
It wasn't clear how much support the measure had in the Legislature yesterday. The office of Assembly Speaker Sheldon Silver, D-Manhattan, repeated a statement made on Monday that it was studying the commission's recommendations and was committed to education. The measure is opposed by the New York State United Teachers, a federation of teachers unions, which called the proposed cap "arbitrary" and one that didn't take into consideration costs that increased beyond the control of school districts.
A spokesman for Senate Majority Leader Joseph Bruno, R-Brunswick, said that they were willing to work with the governor on the issue. In statement Bruno said that the Senate had already passed a constitutional amendment that capped property tax increases at 4% or 120% of CPI.
"Many school districts across the state, despite repeated record increases in state aid, are still raising spending and property taxes well above the rate of inflation, and at rates that simply cannot be sustained," Bruno said.
New York's local taxes are the highest in the U.S., 79% above the national average, and the state is home to nine of the 10 highest-taxed counties in the country, according to the report. Property tax levies are rising at more than double the rate of inflation and salary growth, the report said.
The text of the bill was expected to be finished last night, Paterson spokesman Errol Cockfield said in an e-mail. Many of the commission's proposals appeared to be absent from the program bill, including a "circuit breaker" that would provide an income tax credit to certain property owners who might have difficulty paying the taxes based on their income.
The legislative session ends on June 23.