Is a property tax cap good for Adirondack communities?

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.

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27 Responses to “Is a property tax cap good for Adirondack communities?”

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  1. SG says:

    Brian,
    The only way this region will ever become thriving is to break the addiction to the state’s dole.

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  2. Jim Britell says:

    I have lived through tax caps and property tax limits as a homeowner in California and Oregon, in both cases what actually happened was very different from anything any homeowner imagined or expected and the caps essentially ruined what were once wonderful states. In both cases the fine print ended up over time transferring the property tax burden from industry and commercial buildings to residential.

    When voters think property tax caps they picture homes and little grey haired old ladies but real estate tax is really not about homes but about property and not about homeowners but about property owners. Think about looking up and around in downtown LA or downtown Manhattan, see all those giant buildings…that’s what you are talking about when politicians talk about tax caps. In California, commercial properties more or less control the state so they got the benefits, in Oregon industrial property owners call the shots so they made out like bandits

    For a story about Oregon homeowner’s belated sad discovery that their supposed “homeowners tax relief” has resulted in cutting industrial property taxes and raising theirs, see this article from last Sunday’s Newspaper from Eugene Oregon.

    http://www.registerguard.com/csp/cms/sites/web/news/cityregion/25613429-57/percent-property-tax-value-taxes.csp

    Real estate tax is a very complex subject and this article will show you why and what you are up against if you get involved with “caps”.

    These “Tax cap” bills end up hundreds of pages long, written by commercial property lobbyists and interpreted by judges and no one except lobbyists can see what they actually do until decades pass.

    I greatly prefer to pay higher property taxes and live in New York. You can’t appreciate adequately funded government until you live in a place where government is underfunded. This is a great place to live, don’t ruin it for yourselves like the foolish voters in California and Oregon did. You only get what you pay for

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  3. Tony Hall says:

    Brian, your question is a good one and the local Supervisors with whom I’ve discussed the proposal oppose the idea, for the reasons you indicate

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  4. scratchy says:

    The state is the reason property taxes are so high, but they prefer to blame local government.

    A case in point: state law prohibits school districts from reducing retiree health care benefits unless they make corresponding reductions in current employee benefits (both of which have to be negotiated with the union & are very difficult to change under the Triborough Amendment). The pension costs are skyrocketing out of control, yet there is little talk of a defined contribution pension plan & state lawmakers continue to pass more sweeteners. Medicaid costs are high and the state’s Scaffold Law artificially raises construction costs. Then there’s a new unfunded mandate where if students meet newly implemented standards, school districts have to provide them with extra help. New mandates on volunteer fire departments that require the use expensive safety equipment of which there is no demostrable need for. Villages can have their own speed limits, but towns for some reason can’t. Every town must have their own justice, clerk, tax collector, no sharing allowed even for tiny towns in Hamilton County. The state also regulates what temperature schools can set their thermometer on- I’m not kidding on this one. I could go on and on, but I think you get the idea.

    A property tax cap is a bad idea. Fewer mandates, more affordable pensions, and less red tape is the best approach.

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  5. Tomas Real says:

    “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.”
    This comment by Brian Mann reminds me of the primary argument used by slave owners to justify slavery.
    I also noticed that Brian called people subject to property tax homeowners when being forced to pay another for what should belong to you (what property makes you do) changes ownership into slavery. At least with traditional slavery the masters did not lie about who was the owner. Now that we are subject to the slavery of property tax the state has the audacity to call our forced servitude the American Dream and people FORCED to pay another to keep what is supposed to be theirs owners. This is a complete contradiction of ownership. The American Dream of homeownership is the greatest lie ever told. “Nothing is ours, which another may deprive us of” Thomas Jefferson.

    Property tax FORCES you to make money. No other tax does this. Property tax is completely independent of your income. There is no difference from being forced to make cotton under the threat of a beating and being forced to make money under the threat of being made homeless except we are not prisoners on a plantation. Every local government is granted the authority to murder its citizens (man woman and child) by throwing them into a hostile environment if they CANT pay for their Jobs and lavish retirement benefits with property tax. This is not a free society. Nothing less than the complete elimination of homestead property tax can stop the insanity of misplaced government priorities. We live in a society where because of property tax government denies people the essence of what it is supposed to protect. But because we are mostly comfortable slaves and we have accepted this involuntary servitude and eaten a steady diet of lies for our entire lives the sparks of enlightenment only land on cold wet wood and die.

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  6. TurdSandwich says:

    Tomas, would you rather pay a toll every time you step off your property or pay taxes?

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  7. Brian Mann says:

    Thomas – Your analogy, property taxes to slavery, doesn’t wash and it borders on the offensive.

    Slaves in America were denied basic human rights, including the vote and the right to own property. They were regularly killed, raped and tortured with impunity.

    Property taxes, on the other hand, are created by fairly elected democratic governments — with representation at the most local possible level.

    You’re right that this isn’t a free society if by “free” you mean perfectly libertarian or anarchic.

    We are however a nation of laws, which are established by a representative process and tested for their constitutionality by the courts.

    The moral distance between your enslavement and a decision by your community to vote in favor of a school tax is vast.

    Brian, NCPR

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  8. oa says:

    At least he didn’t call you a Nazi. I guess they’re diversifying.

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  9. knuckleheadedliberal says:

    The problem is not the taxes but the spending that forces the need to rely on property tax.

    If Medicaid and a few of the mandates on schools were paid for at the state level, as they should be, it would relieve pressure on local governments and allow a lowering of property tax. Of course then there are tax incentives to own second (third and fourth…) homes that need to be removed, and also…

    Okay, okay. Our tax system is a Gordian Knot that should be cut and start from scratch.

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  10. JDM says:

    Without even thinking too hard, it is easy to imagine that there will be unintended consequences to a property tax cap.

    What is needed either with the tax cap, or without it, is a spending cap.

    If the taxes are capped and the expenses are not, then new taxes will appear that are sure to be more invasive than property taxes.

    Property taxes have a moral component that may not equal slavery, but something on the slavery side of evil.

    Our vote doesn’t even the score, either. Many of us don’t use the public school system. Our taxes should be given to us in the form of a voucher so that we can be pro-choice when it comes to educating our kids.

    Vouchers would do more do “fix” the financial difficulties our public school system is facing much more than a tax cap.

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  11. Al C says:

    The heart of the matter, as I see it anyway, rests on two facts. First, the State of New York has to radically change its spending habits. We can’t afford the entitlements.

    Second, and probably more importantly in my view, we need to change how we raise money to provide the necessary services. Property tax is horrendously regressive if you own real estate. Those who are rich can easily afford the tax. Those of us who are not rich really have to suffer to earn enough to cover taxes.

    The question is how to do it. It may have to be a hybrid of sorts. Some property tax and other kinds of use tax that is administered state wide. In either event, the politicians will have to change their voracious eating habit of our citizens’ money.

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  12. Bret4207 says:

    Shame on me for being the suspicious type, but if King Cuomo wants a cap, it’s probably going to end up badly for us. Chances are it’s all contained in Brians post- “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.”

    Spending is the problem, not revenue. Solve that issue and the rest is easy.

    Tomas- I understand the metaphor, but you’ll find most here get nervous and whiny when you parse things in uncomfortable terms.

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  13. Paul says:

    “Often, these “outsiders” don’t demand much in the way of government services, which means that their property tax payments are mostly gravy.”

    Brian this makes no sense. The property tax levy is set based on how much money is needed. There is no “gravy”??

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  14. Paul says:

    “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.”

    If this id true, and I am afraid it may be. This area is doomed.

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  15. Pete Klein says:

    A tax cap would be the equivalent of knee-capping local governments and schools.
    If Cuomo continues to push for it, it’s time to start the recall or impeachment process.
    Cut state spending and cut the state mandates, lower all salaries to no more than $100,000.

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  16. phahn50 says:

    you dont control spending by capping taxes. Thats been tried for the last 15 years (at least) and it just doesnt work. If anything, it increases spending because it uncouples the pain of paying for a service from the benefit of gaining the service.

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  17. Brian says:

    As Brian M’s own reporting revealed: between 80-90% of county budgets in NYS are devoted to paying for un- or under-funded mandates. Imposing a property tax will be a disaster unless it’s twinned with mandate relief.

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  18. scratchy says:

    One thing that needs to happen is that local government & school district retirees need to start paying more for their own health care. Government can no longer afford to pay for the whole cost. Also, the tenure system – which coddles bad teachers- should probably be abolished, or at least reformed.

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  19. knuckleheadedliberal says:

    Note to self: the current title is “King Cuomo”

    Everyone please keep me updated as the epithet titles change. I don’t want to be the last one calling him King Cuomo when everyone else has moved on to “Spawn of Satan” or something. Sometimes I’m the last to know.

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  20. Bret4207 says:

    Knuck, your confusion is common and understandable. I often get “The Spawn of Satan” (Cass Sundstein) confused with “The Bride of Satan” (Hillary). It’s even more likely now the people will get their Kings confused. THE King of course is Obama, formerly known as The Messiah. “King Cuomo” is often still referred to as “The Young Prince” or “The Manhatten Messiah”. You can see how your kings and messiahs get confused. On the right things are even more confusing since anyone to the left of Saul Alinsky is commonly referred to as a “Right Wing Whacko”. RWW’s are also commonly lumped in together with your “Hate Mongers”, “Homophobes”, “Jesus Lovers”, “Racists” and of course “Gun Nuts”. It get’s really confusing when you start using the term “radicals” or “revolutionaries”. It’s almost mandatory you identify them by right or left.

    Just FYI, I heard a rumor King Cuomo may prefer the title “Il Duce”, but nothing official has come down yet.

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  21. knuckleheadedliberal says:

    Man! And I thought the King was Elvis. I’ve got some studying to do.

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  22. Bret4207 says:

    Heh, heh, a common mistake. Elvis is THE KING!!!. Obama is THE King. Personally, I’m a Roy Orbisone man myself, but the titles can be confusing. Being a “Big O” fan I often get distracted by those Overstock.com ads and Cosmopolitan covers talking about the big O. Took me a few minutes to figure out that sultry looking blond wasn’t talking about Ol’ Roy on that TV ad and I’m still not sure what that Cosmo mag is talking about. I asked my wife and she just shook her head and walked away mumbling to herself…

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  23. Bret4207 says:

    Sorry about the e on Orbison, I wish this system allowed you to edit

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  24. Pete Klein says:

    Bret,
    You are absolutely right. Too darn many titles and labels. And this was supposed to be a country free of titles and labels, unlike the British which has a House of Lords and a House of Commons.
    Speaking of Il Duce, I wonder how many people know who you were referencing. Every time I hear that title, I recall a photo of him in either Look or Life, showing him dead, hanging upside down, and with an old woman spitting in his face.

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  25. Bret4207 says:

    Did you know that prior to WW2 Il Duce was a poster child for Rooseveltian New Dealers? Oh yeah, there was a statue of him going up in Washington DC someplace. Italys entry on the side of the bad guys squashed that idea. Funny how how FDR’s admirers fail to mention little facts like that.

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  26. Pete Klein says:

    Here’s a good one. If you haven’t guessed, I’m German. I remember my grandfather had an old 78 comedy recording that had an actor playing the part of Hitler and making wisecracks about how stupid Il Duce was.
    I guess by today’s standards, it was very politically incorrect.
    I could tell you other politically incorrect stories from the fifties but would probably get thrown in jail for even mentioning them.
    Having gone to a Catholic high school where just about everyone was either German, French, Irish, Polish or Italian, I heard many politically incorrect jokes being leveled against all of the nationalities. But that was all back in the day of “Sticks and stones may break my bones but words will never hurt me.”

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  27. knuckleheadedliberal says:

    It is an interesting point Bret. Lindbergh was a fan of Hitler’s Germany wasn’t he?

    Was the Shah of Iran a good guy or a bad guy?

    So many things seem admirable at one point in time but taken just a step further can be seen as evil. Context is often everything.

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