Local representatives questioned New York Governor Andrew Cuomo's plan to lower property taxes in the state, and presented laternatives.
During January's 2014's State of the State address, Cuomo suggested, among other plans, a two-year freeze on property taxes across the state, citing the extremely high taxes inside New York - an initiative the governor's office said could provide approximately $1 billion in tax relief.
Cuomo said the tax relief plan is possible because the state has turned a $10 billion deficit into a $2 billion surplus since he took office.
With the surplus, Cuomo said the state can afford to raise funding in some areas, such as education, while cutting taxes for businesses and homeowners.
In the first year of the freeze, the state will give rebates to homeowners in municipalities that stay within the 2 percent property tax cap. In the second year of the proposed freeze, the state will give rebates to homeowners in municipalities that stay within the cap and agree to consolidate or share services with other municipalities.
"Over the past three years, we have made unprecedented progress toward curbing the rise of taxes and government spending in New York, transforming a state budget with a $10 billion deficit to a $2 billion surplus," Governor Cuomo said in a news release detailing the freeze. "These proposals build on our previous successes including enacting the state's first property tax cap and achieving the lowest middle class income tax rate in 60 years, increasing economic opportunity by further reducing taxes and attracting businesses to the state. The proposals introduced today will keep New York moving in the right direction, creating jobs, growing the economy and providing much-needed relief for struggling families."
Tax freeze proposal
- Year one: The state will provide tax rebates to homeowners who live in a jurisdiction that stays within the 2 percent property tax cap.
- Year two: The state will only give tax rebates to homeowners who live in a municipality that stays within the cap. The municipality will also have to start shared services or an administrative consolidation plan with another municipality to remove redundant organizations.
- The freeze will not apply to New York City, which does not have a property tax cap.
- Cuomo claims the freeze will provide nearly $1 billion in relief with an average benefit of approximately $350 for nearly 2.8 million homeowners.
According to information released by Cuomo's administration, the proposal would provide an average benefit of approximately $350 for nearly 2.8 million homeowners. This proposal is waiting on assembly and state senate approval of the governor's 2014 budget.
Despite the governor's pitch, many local representatives and town officials are concerned about the effectiveness of the plan.
According to Jon Stead, Fulton County administrative officer for the board of supervisors, the plan is not ideal.
"I studied it quite in depth," Stead said. "I don't find it a very realistic or practical way for property tax relief."
According to Stead, this law would intertwine the real property tax with the state income tax, because the rebates would come in with homeowners' state income tax returns. This would require a lot of administrative and clerical work for the state.
"It is very complicated, since it is actually is a rebate on their [income] taxes," Stead said.
Stead said the current plan is not ideal.
"I think counties and several local governments have a much better plan for the governors surplus," Stead said.
One of the plans, according to Stead, would be to start to use $1 billion available that has been earmarked for for property tax relief. With that money, Stead said, they could pay off portions of the Medicaid charges that are part of the property tax. According to Stead, this could lead to a tax cut for property owners that would be four times the possible rebate.
Mayfield Town Supervisor Richard Argotsinger said the suggestion Stead had discussed would work better for Fulton County.
"It could have lowered the county tax rate drastically," Argotsinger said.
Stead also said the plan is dependent on jurisdictions complying with the tax cap and making efforts to consolidate services, which they may not be able to follow through on.
"It is a very confusing, layered mechanism," Stead said.
Greg Fagan, Perth town supervisor, said he feels the plan is a political move as opposed to benefiting taxpayers saying Cuomo was "simply trying to buy some votes."
"The biggest thing is it does nothing to handle the cause [of high property taxes]," Fagan said.
According to Fagan, the state could lower taxes in much simpler ways, such as by cutting out unfunded mandates, which have caused taxes to increase. With the current idea, Fagan said county or town governments may not benefit from it.
"The only way people get a rebate is if people increase taxes under that 2 percent mark," Fagan said.
Gloversville Mayor Dayton King said the difficulties brought up by the two-year freeze were not worth the effort.
"It is not the way that it seems," King said. "...There is really no incentive not to increase taxes at this point. In the city of Gloversville, we actually decreased taxes last year by 2 percent and then two years before we kept it flat. If we do that again with this proposal, which we should and what our goal is, there is no rebate."
King said this only affects homeowners, and the rebate itself would not be worth much to many, comparing it to roughly the cost of a pizza and wings.
King said he was doubtful about the tax freeze plan, saying it would mostly benefit "fat cats" who have yet to move forward with sharing services, since Gloversville and Johnstown's moves toward consolidation would not benefit from this plan.
King said currently, the cities of Gloversville and Johnstown have a centralized dispatch and mutual aid for both city fire departments. Fire and police personnel from both cities also share training courses, and a combined SWAT team is shared between the two cities.
King said there could be further changes. For example, King said he would like to bring back the Johnstown bus run, which has not been in effect for some time. King also said he would like to see automatic aid brought in, so both city fire departments respond to a call, rather than one waiting for another call for assistance. King brought up the idea of county-wide assessing, allowing all assessing in the county to be done by the county assessor and a staff. King said there also could be a consolidation of representatives for the Board of Supervisors, which could lower the number of county representatives for each city from three to one.
Johnstown city Mayor Michael Julius said he is waiting to see if the plan passes the assembly and state senate.
"I'm hoping that it does not disrupt our government," Julius said. "It is just a wait and see game."
New York State Senator Hugh Farley, R-Niskayuna, said tax relief is a good idea, but stressed that the proposal was complicated. He said there may be changes to the proposal if it passes, although he did not specify what those changes might be.
"To be very honest, it is very difficult to administer," Farley said. "If it is so complicated and convoluted, how many are going to participate?"
The Associated Press contributed to this story.