When Albany lawmakers regroup in the new year, Governor-elect Andrew Cuomo hopes to focus their attention on remaking one aspect of New York’s tax culture — the part shaped by local governments and school districts.
This from the New York Times.
Mr. Cuomo is already making clear to legislative leaders that one of his priorities is to cap local property taxes, which would have large consequences statewide for homeowners and school districts.
The idea is hugely popular with many New Yorkers, especially those with lower incomes but highly-valued property, who feel squeezed by soaring tax rates.
It’s easy to see why people want action. Franklin County is set to boost their property tax rate by a whopping 20%.
But here in the Adirondacks, the tax-cap idea runs smack into two realities of the Park’s economy.
First, the lion’s share of property taxes aren’t paid by locals. They’re paid by second-homeowners and by the state of New York, who kick in hundreds of millions of dollars every year.
Often, these “outsiders” don’t demand much in the way of government services, which means that their property tax payments are mostly gravy.
Second, that property tax revenue fuels much of the Park’s cash economy, translating into thousands of the best-paying jobs in the region.
The awkward truth is that if taxes are capped, the biggest beneficiaries inside the blue line will likely be wealthy landowners from New York City, Philadelphia, and beyond.
Also, the state of New York stands to benefit, as tax hikes on millions of acres of forest preserve would be curtailed.
The biggest economic pain, meanwhile, could well fall on local workers. As property tax revenue is squeezed, counties will be forced to lay off more snow plow drivers and more nursing home workers.
School districts will have to cut loose teachers. Or find ways to sharply cut their pay and benefits.
Yes, it’s possible that lower property tax rates could eventually spark more investment and more second-home construction, thereby boosting local government revenues.
But given the sour real estate market, that could take years.
The fact that property taxes are one of the primary engines of our economy is something people in the Adirondacks don’t like to talk about much. It clashes with our conservative, small-government ideals.
But as Governor Cuomo pushes the tax-cap idea, we need to talk honestly about how it would affect working families and main street businesses in the Park.