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Tax Squeeze

Report shows property taxes jumping while values fall

March 13, 2011
By MIKE ZUMMO, The Leader-Herald

Last year, property taxes were up and property values were down.

According to a report from the Public Policy Institute of New York State, the research affiliate of the New York State Business Council, businesses in the state paid $21.2 billion in property taxes to school districts and municipalities. That makes up 44 percent of the state tax levy and $1.1 billion more than businesses were forced to fork over in 2009.

However, property values throughout the state dropped by about 6 percent between 2009 and 2010, causing the average tax per $1,000 of true property values to increase about 12 percent, from $25 to $28.

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"Property taxes are a major expense to businesses," said Wally Hart, president of the Fulton County Regional Chamber of Commerce & Industry.

Bill Meyers of West & Company in Gloversville, which counsels businesses ni financial management, said his business clients have been feeling the effects of high property taxes.

"Every time they go up, it affects their bottom line because they can only raise prices so much in this tight, competitive market," he said. "Every item that goes up every year, at what point are they going to try to pass the cost and still continue to do business?"

Hart said when property taxes are added to the other expenses businesses face, business owners are going to question whether they are going to hire more people.

"Skyrocketing property taxes are smothering jobs in New York," Heather Bricetti, acting president and chief executive officer of the Business Council, said in a news release. "Businesses and homeowners cannot go on paying a property tax burden that is increasing faster than the rate of inflation while property values fall."

Overall, New Yorkers paid $48.2 billion in property taxes in 2010.

Hart said the chamber has been an example of an employer not hiring due to expenses. Like most businesses, Hart said, the chamber is in "survival mode." About a year ago, when one of the chamber employees left for another venture, that employee was not replaced and responsibilities were reassigned among the remaining staff members.

"I could use another person in that position," Hart said, "but I'm worried about where we're going and whether we're able to afford it. And that's what businesses are doing."

Property taxes aren't the only bill that's going up. He also budgeted rises in health insurance and fuel costs. He cited the recently surging price of gasoline as problems for businesses that rely on a fleet of trucks, such as Antonucci's Fresh Produce and Seafood and Robison & Smith.

"I can't imagine their gas bill," Hart said.

Gov. Andrew Cuomo, as part of his state budget proposal, has called for a cap on local property taxes at 2 percent or the Consumer Price Index, whichever is less. The only way a school district or municipality can tax its constituent at a rate higher than inflation would be through a 60 percent supermajority from voters.

The state Senate approved the measure Jan. 31. The state Assembly's Ways and Means Committee is considering the bill. There are no votes on it scheduled in the current legislative session.

"We're strong in support of a cap, but we know the only way it's feasible is for mandate relief that will allow municipalities and schools to cut the cost of operating," Hart said. "Not all programs are needed, but because of the mandates, they're required to provide them."

Meyers said a change needs to come from the state level.

"Nobody wants to see property taxes go up and nobody wants to see people laid off," he said. "But both of those are probably going to happen again this year."

Mike Zummo is the business editor. He can be reached at business@leaderherald.com.

 
 

 

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