Why Are Property Taxes In New York So High?
“Consolidating school districts could save New York homeowners — who pay the highest property taxes in the nation — millions of dollars, but surprisingly, some don’t want to hear anything about it, especially if it involves their own school district.” So said Thomas R. Suozzi, in an article called “Streamline Education Through Consolidation” published in the Saratogian newspaper on Sunday, January 4, 2009. Suozzi is Nassau County Executive and chairman of the New York State Commission on Property Tax Relief.
New Yorkers pay the highest property taxes in the nation. I just wanted to repeat that so that it sinks in. New York property taxes are 78% higher than the national average. What is wrong with New York?
One of the recommendations that the commission made is to consolidate school districts that have fewer than 1,000 students. I don’t know why they picked that number. It seems to me that it could be done with larger school districts. It should be looked at on a district by district basis. What makes sense?
According to Suozzi, we spend more per student in New York than any other state in America. Suozzi also said that people in the education community and taxpayers like the idea of consolidation, except for communities that would actually be effected. He thinks people worry that schools will be closed and their school identity taken away. Consolidation has nothing to do with that.
Consolidation is about combining the administrative functions of a school district. It means having one school administration instead of two or three. For example, the school district in which I live, Schuylerville has 1,862 students. It could be consolidated with another nearby school district such as Stillwater (1312 students) or Saratoga Springs (6,857students) or possibly all three could be combined. Again, what makes sense?
Each school would retain its individual identity. Property taxes would be lowered due to greater efficiency of the district’s administration. If we can get the job done with one administration instead of three, let’s put that money back in the taxpayer’s pocket where it belongs. We can’t continue to keep doing things the same way just because that’s the way it has always been done. Especially when the citizens of a community can’t afford it.
I moved to New York a few years ago from Hamilton, New Jersey. The school district there has 13,000 students and one superintendent. He does have several assistants. They have 3 high schools, 3 middle schools, 17 elementary schools and one school for special education. The school budget is $182 Million. If you divide that by 13,000 students it comes out to $14,000 per student.
Saratoga Springs has a school budget of $107 Million. If you divide that by 6,857 students it equals $15,600 per student.
Schuylerville has a school budget of $30.5 Million. If you divide that by 1,862 students it equals $16,380 per student.
I couldn’t find any information about the Stillwater school system budget.
The Town of Saratoga (Schuylerville School system) has a median family income of $48,000. Hamilton, NJ has a median family income of $67,000. The people who can least afford it, pay the most per student. Why is that? I can’t find median family income statistics for Saratoga Springs or Stillwater. If I do, I will update this information.
According to a story on Rnews.com in Rochester, Sharon Sweeney is director of the Four County School Boards Association. She says, “Let’s not punish our schools. They are the one thing New York State still has that attracts businesses to the state.” Oh really? Somehow I find that hard to believe. Name one business that is moving into New York state because of the quality of the schools. More than likely, they are getting a tax break from the state of New York to move here, like AMD and their $1.2 Billion incentive package. They also just got a break on $26 million or so in sales tax while they are building the new plant. That is another story.
Consolidating school districts using commonsense is not punishing our schools. It is using our available tax dollars wisely and giving the overburdened New York taxpayer a well deserved break.
Below are some excerpts from the final report of the Commission on Property Tax Relief. You can read the entire report here. The report is on the Fiscal Policy Institute’s website. You don’t have to read it all at once. If your head starts to spin, just take a break and go back to it later. The report is 94 pages plus 40 pages of supporting documentation. It is an interesting document and very well done. Appendix B contains all of the recommendations of the committee.
High property taxes have the most negative impact on low and moderate income working families, seniors on fixed incomes, and small business owners, who must shoulder this burden regardless of their ability to pay. Whether your concern is decreasing education costs, or increasing education spending, or addressing inequities in school funding, or improving programs, virtually all agree the answer cannot be to continue to increase property taxes at the current rate. The rate of increase in property taxes over recent years is unsustainable, and simply unfair to those who cannot afford to pay.
New York schools outside of New York City spend more per student than any state in the nation – an estimated $18,768 in 2008-09. New York’s per student spending is more than 50 percent above the national average. This results from high personnel costs; the number and complexity of mandates and expense of compliance, especially those that govern special education; and the large number of school districts, many of which are small.
The Commission proposes capping annual growth in the property tax levy at 4 percent or 120 percent of the Consumer Price Index (CPI), whichever is less.
The Commission recommends that, after a property tax levy cap is adopted, the State reexamine the STAR program, which provides payments to school districts with no relation to individual taxpayers’ ability to pay and has failed to effectively reduce property tax growth. A new STAR circuit breaker, targeted to relieve the tax burden on individual taxpayers based upon their income and ability to pay, would be a much more equitable way of reducing an individual’s property tax burden.
The Commission recommends that the State support school districts’ efforts to rein in the costs of salaries, pensions and health care, as well as general operating and capital expenses. These recommendations address the root causes of high property taxes by adopting the following proposed solutions:
Increase health insurance premium contributions by employees and provide health insurance coverage jointly with other public employers or school districts, including increased use of health benefit trusts.
Centralize and streamline school district reporting to decrease personnel and other costs associated with sometimes duplicated and unnecessary forms and other filing requirements.
Require consolidation of school districts with fewer than 1,000 students and grant the Commissioner of Education discretionary authority to order consolidation of school districts with fewer than 2,000 pupils to achieve economies of scale and to increase educational opportunities through expanded course offerings.
Create countywide property tax assessment and uniform statewide assessing standards.
Here are some more excerpts from the final report. I picked out what I think are some important points for those of you who don’t won’t to read the entire document. I recommend that you read the entire document though.
Homeowners are “voting with their feet†– selling their homes and moving to escape the high property tax burden. Indeed, census data consistently show New York leading the nation in the number of residents migrating to other states. Almost universally, we heard that the high property tax burden is one of the State’s most pressing problems – and it is only getting worse.
For example, there are almost 700 distinct school districts in New York State. Approximately 200 of these districts enroll fewer than 1,000 children.
New York State has the highest local taxes in America – 78 percent above the national average. New York’s local taxes also rank far above those of other large states. For example, New Jersey has the next highest level of local taxes, but they are only 18 percent above the national average. New Yorkers pay $84 per $1,000 of personal income in local taxes as compared to the national average of $47. When local taxes are combined with State taxes, New York has the highest tax burden of any large state – 35 percent higher than the U.S. average. It is important to note, however, that State taxes are not a primary cause of this high tax burden. New York ranks only 5 percent above the national average in state taxes (at $73 per $1,000 dollars of personal income). It is New York’s local taxes that are particularly high.
There is a significant disparity between the taxes paid by citizens of New York State, not including New York City, when compared to the rest of the nation. Outside New York City property tax represents the greatest proportion, 76 percent, of local taxes. Outside New York City citizens pay $54 out of every $1,000 of income in property taxes, 56 percent above the national average of $35. Total local taxes are 52 percent above the national average.
While property taxes have increased by a total of nearly 54 percent since 2000, wages have risen by only about 26 percent. This underlines how unaffordable property tax bills have become for typical New York families, which makes the State a very costly place to live.
The average teacher in New York earned $58,873 in 2005-06, the latest period available for comparing New York to other states. While the Commission recognizes that a higher cost of living in New York is a contributing factor, this average salary is 17 percent higher than the national average of $50,379.
Benefits, consisting primarily of health care and pension programs have the largest growth factor of any expense category. Benefits averaged 38 percent of salary expense in 2006-07.
There are approximately 700 school districts in New York State, ranging in size from New York City to districts with fewer than eight teachers. Far too many are quite small. About 200, or approximately 28 percent, had fewer than 1,000 students in 2006-07, and over 500 have fewer than 3,000 pupils. Small districts are not limited to rural areas. On Long Island, where there are almost a half million pupils, over one fifth of the more than 120 school districts have fewer than 1,500 students, with an average district size of under 800 students.
In comparison, Florida’s system of countywide school districts includes only 67 districts, and school districts in that state, and in Maryland, North Carolina and Virginia, which also rely exclusively or extensively on countywide school districts, average approximately 40,000, 36,000, 12,000 and 9,000 students respectively.
There are really two New Yorks: the “downstate†region, which includes the New York City metropolitan area, lower Hudson Valley and Long Island, and the “upstate†region. The state’s high ranking in terms of income is due mostly to conditions downstate. In contrast, upstate cities and their surrounding areas have been losing industries, jobs, and population for many decades – nearly a quarter-million people left New York for other states in 2006 alone. Seventy percent of all school districts have declining enrollment. Absolute population declines would have become an overwhelming trend had it not been for a steady influx of immigrants. However, these immigrants settle predominately in the downstate area, where job possibilities are better, with a relatively smaller proportion choosing to settle upstate.
The report contains many detailed recommendations as to what should be done and why, but it doesn’t say who is going to actually do the work. It doesn’t say when or how the recommendations are going to be implemented either.
I hope that members of the New York State Assembly and our State Senators will read this report and begin to act on the recommendations so that New Yorkers can quickly see real property tax relief. What could they be doing that is more important than this?
You can always call them or email them and ask if they have read the report and how soon they are going to act on the recommendations.
If we New Yorkers pay the highest property taxes in the United States, maybe we should take the advice of the Commission on Property Tax Relief and start consolidating some school districts. Are there any volunteers to go first?
I would really like to know what you think. Leave a comment or send me an email. Thank you.
Note added 10/6/10 The Times Union of Albany recently published a story called New York’s Property Tax Nightmare. It was written by Bob Port and James M. Odato. Thank you Times Union. It is a great article about out of control property taxes. You can read it here: New York’s Property Tax Nightmare
Note added on September 24, 2009: If you do a Google search on “Why are property taxes so high”, this blog post will come up on the first page at number 6. However you found this site, people continue to read this post because I get “hits” on it everyday. A lot of people are concerned about property taxes. If you read the entire post, I would love to read your comments. What state do you call home? What did you think about the post? What answers were you looking for? Did this post answer any of your questions? Thank you in advance. I hope you enjoy the blog post. John Tedder
Tags: amd, commonsense, hamilton nj, high property taxes, highest local taxes, homeowners, new york, new york state assembly, new york state commission on property tax relief, New York taxes, ny taxes, property taxes, rnews, rochester, saratoga springs, saratogian, school budget, school taxes, schuylerville, sharon sweeney, star program, stillwater ny, streamline education through consolidation, tax relief, thomas suozzi, town of saratoga, two new yorks
General, New York State | John Tedder | 
January 22, 2009 8:56 pm
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You’re forgetting one important thing. The teachers union. Good luck getting by them.
“Property taxes would be lowered due to greater efficiency of the district’s administration…”
In a perfect world you’d be right. But in the f’ed up world of The State of New York there is nothing, NOTHING, “efficient” under any circumstances.
You’re right-on in what you say about consolidation but I fear that in such a heavily Democratic state, the elected officials in the districts would somehow find a way to make MORE jobs and spend MORE money.
And the Teacher’s Union issue that Johnny mentions above; Absolutely. There is NO WAY it would fly with those selfish cretins.
I have absolutely NO faith in the a-holes in Albany, or any local government, whatsoever.
It must be done. The state is in a crisis. The average citizen can’t afford to live here anymore. The Assembly and Senate must be made to work for the common good instead of their own selfish self interest.
We the people of the State of New York must do whatever it takes to take back control of our state from the lobbyists and special interests.
Taxes are high in liberal states because Big Government needs a source of revenue.
At the same time, many of these blue states are near collapse and are looking to the federal government for a bailout. Stupid.
No wonder many people are leaving the likes of California in droves.
John, you wrote above: “Property taxes would be lowered due to greater efficiency of the district’s administration. If we can get the job done with one administration instead of three, let’s put that money back in the taxpayer’s pocket where it belongs.”
I couldn’t agree more 🙂
Hi John,
I enjoyed reading your article. From what I can see, school systems and the NYS Education Dept. do not use the entire school budget to estimate Expenditures per pupil. They only use the amount of money spent on instructional services, so the total figure used is much lower than dividing by the entire budget.
Below are some links where you can obtain expenditures per pupil for Stillwater, as well as other NYS schools.
https://www.nystart.gov/publicweb-rc/2007/f7/CIR-2007-522001040002.pdf
http://www.emsc.nysed.gov/irts/reportcard/2007/supplement/522001040000.pdf
Grades 9-12 Report Card figures reported by the Times Union on 6/17/07.
I am also wondering if you have read the Schuylerville School District Audit completed by the NYS Comptroller’s Office for 7/1/04 – 6/30/05? It has some very interesting findings. The day I read it I also attended the Schuylerville School Board meeting and the School Board and the Superintendent downplayed the entire audit and just brushed it off. I wonder, when Leon retires at this year, if he will get to keep the camera equipment that taxpayers funded of over $4000 so he could take pictures at Board meetings and teach a class? I also wonder where he taught the photography course and to whom? Actually the documentation supporting this purchase did not match how much he was actually reimbursed. Anyway, the audit can be found at:
http://www.osc.state.ny.us/localgov/audits/2006/schools/schuylerville.pdf
Wendy, thanks for your comment. I think that dividing the entire budget by the number of students like I did makes sense and gives a more accurate cost figure. To me, the cost of bus service, electricity, etc. is part of the cost of running a school system and should be included. If my property taxes didn’t have to pay for school buses and electricity, etc. than I wouldn’t mind excluding them.
The way the state figures it gives a very false and misleading impression of the real, true cost of public education.
The Commission on Property Tax Relief said, “New York schools outside of New York City spend more per student than any state in the nation – an estimated $18,768 in 2008-09. New York’s per student spending is more than 50 percent above the national average.”
I am fairly certain that the commission is computing this figure the way that I did. The state of New York should tell the truth instead of trying to hide the real cost.
Thank you for the links. I will check them out.
The school systems need to be much more transparent with budget information, expenditures, salaries, etc. It shouldn’t be as difficult as it is to find this information.
I encourage you and everyone else to read the report from the Commission on Property Tax Relief.
[…] I would like to see Cuomo join forces with Thomas Suozzi who was the chairman of the New York State Commission on Property Tax Relief. I wrote about the Commission’s report in a previous post, “Why Are Property Taxes In New York So High“. […]
I couldn’t agree more, while we are at it we should look into consolidating local governments. I live in western New York and there are two police departments in some towns. They also have a village gov’t and a town gov’t. Out west county gov’t doesn’t even exist, it is a little office with five people working in it. My husband and I will be moving next summer so count me as one of those voting with my feet. I am from a family of eight and will be the last to leave this blood sucking state. I am a raging liberal but every year I live hear I get closer and closer to becoming a republican. My advice, get out while you can.
Amy, to which state are you moving? I moved to New York in 2005. I lived in New Jersey my entire life before that and it just became too crowded for me. I love where I live now. It is about 12 miles east of Saratoga Springs. There is lots of open space and I don’t have to sit in traffic jams.
The property taxes are ridiculous though and the state income tax is higher than NJ. In New York they tax everything! Wages are lower too. Higher taxes and lower wages make things difficult.
The amazing thing is that people keep electing the same representatives instead of trying someone new.
Great report John, I too moved here from NJ and love it but see the same problems growing. We are looking for a home but we are excluding Schuylerville because taxes are almost twice that of the surrounding Saratoga area. Still less than what we were paying in NJ though.
Nice job. I have been living in the Western New York area for 13 years now and am always boggled by the taxes. The thing that gets me is that there are SO many layers of government to deal with and pay for as well. I have a villiage government, town/city government, county government, state government, and federal government. Lots of pockets to line on the way up. WNY has three major reasons why the taxes are so high. One, schools (they are great schools, but my God do we need to have so many pricey extra activities?). The second is that at every level of government in our area (schools included) there are strong government unions. This is the part that sticks me. Private sector, fine, but not the public sector. I don’t know how it is even legal or constitutional to have a union in government. Third is sheer size. The government is the largest employer in Erie county…that’s sad. At some point, just like the housing crisis, the bubble has to burst.
Thanks for commenting Andrew. I’m not sure at what point the bubble has to burst, but I don’t think the taxpayers of New York can take much more.
John,
Despite Suozzi’s ideas Nassau County has seen its taxes rise steadily in his era over 8 years. Suozzi is also very arrogant and rude, (and yes I have met the man).
I really hope he loses, he is an ambitious phony.
John great post by the way.
But I disagree on Suozzi.
Thanks,
Will
Will, I have never met the man, but I like his ideas about consolidating school districts. Thank you for taking the time to comment.
[…] […]
I moved here 7 years ago…taxes have always been high and people have always been talking about how high they are but nobody does anything about it. There is no action on anybody’s part and nobody is taking responsibility for it.
I dont know anybody that is happy with paying this much in taxes so why isn’t anybody listening to the people that live here? It just doesn’t make any sense to me…just politics as usual…Big Joke!
Wow-This is the best analysis I have seen. I thought I was the only one that thinks this way. I looked at my school budget this year and saw 12 administrators at 112,000/yr plus those juicy pension benefits. When thye talk about hurting the kids with cuts and consolidation the school folks are thinking about there healthy benefits they will lose not the kids education. When I pay my property taxes I joke and call it the teachers union tax. This state is quasi socialist and its proven by its lack of any private growth. We need repeal for sure.
[…] You can read it here: Why are Property Taxes so High in New York? […]
I am one of those who has moved out of the northeast due to taxes. School systems where I now live are on a county wide basis, and it works just fine. My 2 daughters graduated high school with honors… went on to college and then earned Master’s degree’s. The money I saved in taxes has paid for most of their college education. There is no justification for those high taxes. “Punishing The Children” is just a crutch. Our tax money now goes where it should… to the teachers. Ya’ll are crazy to stay there and pay those ridiculous taxes. Move!
Along with consolidation, what can the governemnt do different? Why can Virginia afford to collect, for example, approx. $1,000 in property taxes on a $250,000 home when NY taxes on the same home are $8,000 or $9,000? VA collects a car tax when you register your cars, which is much higher, but is goes done as the car ages or goes down in value….new car…higher tax. Why can’t we adopt something like that in NY?
I recently moved to western NY after renting in cities for 10 years. Our mortgage payments went up another $100/month this year. We already pay three times what my mother pays in CT (for more house/land/better school district). She told me she’d have to move once retired (her mortgage paid off) if she lived where we do.
As a newcomer to NY, the term ‘property tax’ is misleading because it doesn’t include the ‘school tax’, which is just as much. Not only was it a shock, but it was not straightforward to determine because of the multitude of different districts with their own tax rates, for what seemed to be determined by the elementary schools!? I still haven’t figured out the government/district structure yet.
If wages neglect to keep up with the rising tax rates, I can’t see my family being able to continue on as is without considerable change.
the only way to solve the problem is if enought people start to rebell against the goverment.if you have the numbers it can be done.so wake up people its time for a revolution
I moved to Fl from upstate NY and presently pay $58/yr in school taxes. I inherited a camp in NY which I pay $2000/yr in School taxes. The locals don’t want to consolidate and always approve the budget. They just suffer thinking that it is the best for the kids. Stupid!
I will be selling the camp in NY soon as I can’t afford the school tax as I am retired. The town tax is only $600.
There is no proof that consolidation at the county level will decrease taxes. When Maryland consolidated they created county level boards that were not elected and administrative costs skyrocketed. The cost savings come from scrapping the current contracts with the teachers and pension/ health care contributions. Can’t say I think gutting teacher salaries and benefits will increase student achievement levels. I need proof and I have been looking…it just isn’t out there….sounds good on paper though. I am a Mom in one of the smaller districts…wish I knew the right answer
I live in Indiana but have family in East Aurora, NY. My wife wants to move to NY close to family but I’m glad I did my homework. Taxes are INSANE. I don’t know how you New Yorkers do it. As much as we would like to be closer to family, no way I can afford those taxes. Like others have said, you need to end status quo and elect new officials or start a revolution. If no one complaints, officials will think things are ok. I feel for you guys. Here in IN, people complained and governor Mitch Daniels signed a law that property taxes can not be more than 1% of the assessed value and guess what? School districts made it work without losing school ratings. I agree unions should not be in government making things expensive for tax payers like only having to work 5 years to qualify for a pension. I’m not even from NY But feel for you guys
Thank you for taking the time to comment.
Moved to Las Vegas nv years ago, needed a job. Retired now and was thinking of moving back to western ny. I started checking out homes and found many nice places very reasonable. Then I checked out taxes.. forget it! Zillow will light up your screen RED with foreclosures! Maybe Idaho or Utah!
H.J., How do your taxes compare to western New York? Thanks for commenting.
Not to mention home owners in New York are so strapped with their property taxes, maintenance becomes impossible. Therefore alot of areas are falling apart.
With respect to property taxes, there’s also a corruption element involved. See:
http://propertytaxesupstatenewyork.blogspot.com/