Are consolidation, tax freeze the answer to high taxes?

Discussion of New York state’s high property taxes has left many questioning a solution to the burden.

Gov. Andrew Cuomo’s plans for a two-year property tax freeze were included in the state budget proposal agreed on by state lawmakers, which will be put to a vote Monday.

Cuomo’s plan included incentives for municipalities showing efforts to consolidate services, but some believe sharing services isn’t the only answer.

“Shared services exist for a variety of reasons, only some of which are actually intended to save money,” said John Sipple, director of the New York State Center for Rural Schools and professor of development sociology at Cornell University.

Sipple has argued that Cuomo’s proposed set of ideas to help reduce property taxes across the state are only one element to reducing the high tax burden.

“If you look at all the different types of shared services between municipalities and/or schools, maybe a third of those are argued to save money,” Sipple said. “If we engage in a spree of shared service arrangements with the hope that we’re going to save millions upon millions of dollars, I think that’s a bit of a false hope.”

Furthermore, he said an increased state share of county and school district service provision is a necessary component to reduce local property taxes and ensure opportunities and outcomes are more equitable.

Speaking from a school standpoint, Sipple said part of the conversation should involve the state’s role in providing aid.

“New York state property taxes are high, but part of that is because the state’s share of local school budgets is now down below 40 percent, while other states have that state share at 50 to 70 percent,” Sipple said.

Furthermore, property tax-wealthy areas which inherently receive less state aid because it’s easier to generate local tax dollars are less susceptible to the “crunch” than poor areas, Sipple said.

“You can’t avoid the equity issues in this conversation about cutting state dollars,” he said. “If you’re going to talk about restricting local spending and cut state spending, the only thing that leads to is a reduction of local service provision.”

A study performed at Cornell found that when it comes to alleviating fiscal stress, 41 percent of local governments statewide raise user fees on services they provide. Sharing services was the second most common approach to addressing fiscal stress. Reducing and eliminating services were responses municipalities tried to avoid.

Assemblyman Andy Goodell, R-Jamestown, said there are several reasons why taxes are so high in New York.

The state’s Medicaid program costs are more than that of Texas and California combined, and New York state became the highest taxed state in the nation because it was one of the few states where local governments/counties were forced to pay half of the cost of the state’s Medicaid program, Goodell said.

While New York state governments look for ways to keep taxes at a minimum, Goodell said using state money to incentivize those which keep their tax levies just below the cap is not the answer.

It would provide incentives to municipalities which raise their tax levies to just below the tax cap in return for more state aid, at no cost to the taxpayers, which Goodell said is the end-result if Cuomo’s plan is put into action.

Instead, he said the $400 million put aside for the property tax freeze should be spread out across the state.

“If you took that money and put it into financial aid for city schools, the taxpayers would get all the benefit of that through the municipalities without giving an incentive to raise taxes, or just helping wealthy districts,” he said.

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