Saturday, December 24, 2011

New York jurisdictions generally abiding by tax cap More than 80% of governments comply with limit

More than 80 percent of local governments are staying under the state's new property tax cap, data from the state comptroller's office show.
But some government officials said they are doing it with plenty of pain to local services and staff.
Nineteen percent of governments who relayed their plans to the comptroller's office said they are overriding the cap when their fiscal year begins Jan. 1.
As of Monday, 62 percent of governments had reported their plans, though almost all counties, cities and towns had reported. Other taxing entities filing their reports include libraries and fire districts.
Gov. Andrew Cuomo, who pushed for the property tax cap in his first year in office, said last month that the tax is working.
"Since it took effect this summer, the cap has stopped automatic tax increases and brought much needed scrutiny to government spending," he said in a video message last month.
The statistics from the comptroller's office were a snapshot. Some governments said their legislative bodies either have since agreed to override the cap or did so as a pre-emptive step, but didn't ultimately go over the cap.

The property tax cap limits the growth in the tax levy -- the total amount a government can raise in taxes -- to no more than 2 percent a year. To override the cap, a governing board has to get approval of 60 percent of its members.
Schools also will have to abide by the cap. The public votes on school budgets in May. Sixty percent of voters would have to vote to override the cap.
Most local governments' budgets operate on a calendar year, so they had to craft their 2012 budgets this fall with the cap in mind. Schools will propose their budgets early next year.
In the town of Bedford, Westchester County, officials underwent the steps to override the cap, but ultimately came under it -- a 1.65 percent levy increase.
Bedford Supervisor Lee Roberts said the consideration of an override turned into a political battle with residents and critics.
"It became very politicized when we thought we were being prudent," she said.
Others said they had no choice but to override the cap, saying to stay within it would mean a significant loss of services and employees.
The Tompkins County Legislature approved a 3.9 percent tax levy increase. That was after the county cut 24 positions and limited some services.
"In looking what would have to happen to fit under the cap, the Legislature concluded that the cuts would be too severe," county administrator Joseph Mareane said.
The tax cap has drawn the ire of local governments because they say it hasn't been paired with adequate reforms to unfunded, state-mandated programs.
The state Association of Counties said the state's 57 counties outside New York City face unfunded liabilities approaching $6 billion over the next eight years.
"Lots of people are saying there is no political gridlock in Albany," said Stephen Acquario, the group's executive director. "There certainly is political gridlock in Albany and that concerns the mandated programs at the local level and the call to reform them."
Six counties overrode the tax cap this year, the association said: Albany, St. Lawrence, Tompkins, Fulton, Essex and Rockland.
In Rockland's case, County Executive Scott Vanderhoef proposed a budget within the cap. It would have cut nearly 800 positions, closed a hospital and charged taxpayers $160 to pay off a county loan.
County legislators agreed instead to fold the county loan into the overall property tax and raise the county's sales tax. The move means a 30 percent property tax rate increase, about $175 a year per property owner, but it will save about 550 jobs and help the county with future budget gaps.
Vanderhoef said the tax cap doesn't get at the root of the state's unbalanced spending that puts the onus on local governments to fund state programs.
Counties are looking, among other steps, for the state to take over its Medicaid costs, about $2 billion a year, and reform the state's pension system. They say that nine state programs account, on average, for 90 percent of their property tax levies.
"The tax cap only addresses the symptoms of the illness, not the illness itself," Vanderhoef said.
In Dutchess County, outgoing Executive William Steinhaus isn't funding a 3 percent increase in Medicaid costs in 2012. Instead, he wants the state to pick it up. If the state doesn't, the county would be left with a budget shortfall.
The state wants "county governments to make all the tough decisions and take all of the complaints from the taxpayers because they are not willing to," said Steinhaus, who is retiring at year's end.
Chemung County Executive Thomas Santulli said the county is going on its seventh year without raising taxes. He said if the state were to enact mandate-relief measures, he would return money to local taxpayers.
"I would give it in writing and in a pledge. I could reduce the county property tax if we did something with mandates," he said. "We would give all back to the taxpayers."
Cuomo has indicated the state doesn't have the money to pick up the local share of Medicaid. The state pays about 25 percent of the cost of the health care insurance program for the poor; counties pay about 15 percent, and the federal government pays the rest.
Brian Sampson, executive director of Unshackle Upstate, a Rochester-based business group, said the tax cap is working. He said it is forcing local governments and residents to pay closer attention to what municipal boards are doing. The group, as well as other business organizations, sought the tax cap.
However, Sampson said the tax cap wouldn't be effective long term without mandate relief. He said local governments and schools would ultimately override the cap in coming years because they wouldn't be able afford to stay under it.
"The tax cap was step one," he said. "Mandates are step two."

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