A report has been released on the first year of
the state's property tax cap. The report found that in the cap's first
year, it succeeded in holding average property tax growth to 2 percent
– 40 percent less than the previous ten-year average.
"The promise of a new New York was based on a simple idea: to
return our state government to the people of this state and to the
taxpayers," Governor Cuomo said.
"For years, out of control spending drove
property taxes higher and higher, forcing families and businesses out of our
state. New York had no future as the tax capital of the nation, and last year
people in all corners of the state came together to help us put in place the
property tax cap which empowers communities to take control of their own
spending and tax levies. One year later, it is clear that the property tax cap
has been a tremendous success, saving hard-earned money for New York families
while ensuring that local governments learn to do more with less."
When the Governor took office, local property taxes
were higher in New York than anywhere else in the country.
The median property tax paid by a homeowner in
New York ($4,090) was twice the national median ($2,043), and
when property taxes were accounted as a percentage of home
value— thirteen of the fifteen highest-taxing counties in the country
were in New York.
Recognizing that rapid growth in already-high property taxes was
fueling New York's negative tax climate reputation and driving families and
businesses from the state, the Governor introduced the state's first-ever
property tax cap shortly after taking office, and it passed the Legislature in
June 2011.
The cap limits increases in school and local property taxes
to two percent a year, or the rate of inflation, whichever is less, with
narrow limited exemptions.
Carefully constructed based on
lessons learned from other states, the cap empowers citizens to
scrutinize the taxes that they have to pay and take control of local spending
decisions and tax levies.
The report issued today revealed that out of 3,077 local
governments and school districts reporting a proposed levy in the past
year, 84 percent reported a levy within the capped amount. Other
highlights of the report include:
642 of 678 or 95 percent of school
districts stayed within the cap.
1,944 of 2,399 or 81 percent of local governments that reported
a proposed levy stayed within the cap.
The cap has helped encourage school boards
to propose lower tax increases. According to the report, 92.8 percent
of school districts presented voters with budgets that were at or below
allowable tax levy increases under the cap.
Of
these, 99.2 percent were approved by the voters on the initial vote.
The cap also increased voter participation and
communication between school boards and the voters. Fifty-two districts
proposed budgets that exceeded the tax cap and required a 60 percent
"supermajority" to pass. Of those 52 districts, 33 passed their
budgets on first vote, and 18 others received approval on revote after reducing
their proposed budgets.
The data collected for the report show that local governments and
school districts have begun a course toward more sustainable property tax
growth. Even those school districts and local governments that elected to
override the cap had proposed tax levies that were below average rates of
increase for the past decades.
Through increased public participation in
the budget process, the cap has encouraged local governments to
explore all avenues of reform and efficiency before they increase the local
levy.
The full report is available here.
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