Why Are Property Taxes So High In New York?

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.
*This is required reading for all New Yorkers.

You can read it here: New York’s Property Tax Nightmare

I wrote an article in January of 2009 about property taxes in New York. It is still relevant and contains links to property tax information that you will find interesting or useful.

You can read it here: Why are Property Taxes in New York so High?

What do you think?

Spring In Washington County, New York

Today is the first day of spring here in beautiful Washington County, New York. I knew spring was on its way because the geese have been flying north over my house all week. I first noticed them on Sunday, March 8th and I grabbed my camera to take a few pictures. I live next to the Hudson River and it is a main migration path for the geese. I can see the Route 29 bridge over the Hudson and some of the river flowing under it, from where I am writing this.

There is a 15 acre field behind my house where the geese sometimes land. The field still has the remains of the corn stalks that were cut last fall. Some of the geese formations have been rather poor and lopsided this year. I don’t know why I judge them, but I do. How hard could it be to form a flying V? I don’t like it when one leg of the V is much longer than the other or it contains obvious gaps. Don’t they realize they are putting on a show for those of us on the ground? I wonder what they think of us as they look down from 200 feet in the air? I always enjoy watching and listening to the geese honking as they make their way north.

I also saw my first Robin of the spring this morning near my bird feeder. I only saw the one. I didn’t see any of his companions. I have a homemade bird feeder in my yard. It consists of two saw horses that a friend of mind donated to me when he moved to North Carolina and two boards that I had laying around. My cat likes to sit in the window and watch all the activity. He makes chirping noises while banging his tail against the wall. We (my cat and I) have had up to five squirrels around the feeder at one time.

My cat doesn’t go outside. I don’t want him killing the birds. I don’t want him being eaten by a coyote or a fox that strolls through my yard once in a while either. I don’t want him getting hit by a car or bus. He has already run into a car. That is how we got him. My wife was driving home from work and he ran across the road without looking. He was stunned by the accident, but not hurt too seriously. We took him to the vet and she fixed him up. We brought him home and he is now an inside cat. We named him Bumper.

There is still some snow on the ground around here. A lot of it has melted over the past two weeks. The temperature should be in the 50’s this weekend and that will probably melt the snow that remains.

I saw my first skunk cabbage of the year this week too. I was walking through an old pond on my property when I saw it. It has probably been there for a few weeks. They usually come out sometime in February. I usually end up with at least a dozen or so in the pond and alongside the stream that runs near it.

When the stream leaves my property, it flows through a culvert under the road. It comes out on the other side and meanders through some woods that are owned by the New York State Canal Corporation. If I walk through those woods at this time of year, I will see a dozen skunk cabbages poking through the ground. I can also be standing on the bank of the Hudson River in about a minute.

There is no boat traffic this time of year. The locks on the Champlain Canal don’t open until sometime in May. Shortly before the locks open, a big barge and a handful of men, set up all of the buoys and markers along the river. That is always a welcome sight here along the river and, even though I don’t have a boat, I look forward to seeing the buoys being put back in the river.

I live just south of Lock 5. I had never seen a real operating lock until I moved here four winters ago. The Hudson River in this area is very beautiful and amazing. If you get a chance, stop by and see Lock 5. You can also take a tour of the river on either of two boats operated by Champlain Canal Tour Boats. If you do, tell Captain Bob and Marie I said hello.

Reforming Local Government In New York

According to New York Attorney General Andrew Cuomo, our system of local government is broken. There are 10,521 units of government that duplicate services creating needless, wasteful bureaucracies. He is proposing legislation to empower citizens and local governments to consolidate or dissolve these redundant entities.

You can read all about it on the Attorney General’s website. On the same site, you can also watch a half-hour video of AG Andrew Cuomo giving a presentation on reforming local government.

In a December 2008 press release Cuomo said: “Despite New Yorkers drowning for decades in some of the nation’s highest taxes, local leaders have been blocked from reforming local government in an effort to cut government waste and reduce the tax burden. During this economic crisis, leaders have an historic opportunity to fundamentally reform this state’s patchwork quilt of local government entities. These layers upon layers of taxing entities have a chokehold on state residents, and antiquated and arcane laws governing them perpetuate government inefficiency. Our goal is to reform those laws so communities, where appropriate, can reduce local government burden and reduce the cost of living in this great state.”

He is right. There are too many levels of local government. This may have made sense years ago, but it doesn’t make sense today. It has to change.

Cuomo goes on to say that current laws make reform almost impossible. The laws are inconsistent and difficult to understand, even for lawyers working for the Attorney General! Cuomo is proposing new legislation to empower the average citizen with the ability to initiate the consolidation or dissolution process for all local government entities.

Governor David Paterson had this to say: “We need to help our working families by doing everything we can to lower the cost of government. We cannot achieve real, sustainable property tax relief without addressing local government efficiency…. I applaud Attorney General Cuomo for addressing the root cause of these inefficiencies; layers of bureaucracy that duplicate service and drive up costs to residents.”

New York State Senator Betty Little said: “The state fiscal crisis is forcing every level of government to look at ways to control spending and increase efficiency. As a result, more communities are now interested in examining dissolutions and consolidations as a way to avoid property tax increases.”

Cuomo says that consolidating or dissolving inefficient local governments can save New Yorker’s an estimated 5 to 22 percent on their property taxes, which are the highest in the nation. Even if it is only 5 percent, I’ll take it. When was the last time your property taxes went down?

The Attorney General’s office has been conducting investigations into waste, fraud and abuse at various levels of government. Those investigations have resulted in numerous settlements and convictions that have saved taxpayers millions of dollars.

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“.

New York needs to get moving on consolidating local governments and school districts. Having the highest local property taxes in the nation makes New York an undesirable place to live or start a business.

The New York State Association of Counties (NYSAC) recently released a report called, “The Gathering Storm, The Challenges Confronting the Future of New York.” It was written by Jeff Osinski, Director of Research and Education, New York State Association of Counties. It is a publication of NYSAC and the Dennis A. Pelletier County Government Institute, Inc.

The title, “The Gathering Storm” was no accident. It is the title of the first book in Sir Winston Churchill’s six volume memoir, “The Second World War.”

In the Forward to the NYSAC report, Stephen J. Acquario,  Executive Director says, “There is no question that our state faces an important crossroad. We face two possible futures: one where we continue to lose people, businesses and jobs to other states; or one in which we leverage our strengths to rebuild our economy, foster innovation and attract people and businesses.

“It is time that the leaders in this state—state and local leaders—work together to turn this ship of state in a different direction. We need to examine our public policy habits that have caused decades of overspending, overtaxing, over-regulating and overmandating. If our counties and our communities are going to grow again, state leaders need to fundamentally change the way they do business in Albany.”

The Introduction to the report says, a recent study conducted by the Wharton School at the University of Pennsylvania forecasts that 17 of the top 50 counties in population loss in the nation by the year 2020 will be New York counties.

The financial news network CNBC ranks New York State as the most expensive state in the nation in which to do business. Forbes ranks the state 49th in its business cost rankings. CEO Magazine ranks us 50th and the national Small Business & Entrepreneurship Council ranks New York State’s tax burden 44th.

New York also ranked 46th in costs of basic essentials, food, housing and energy. Only Alaska, New Jersey, California and Hawaii ranked higher in the costs for basic essentials.

New York ranked 49th in the quality of the workforce.

Is anybody in Albany listening?

What is it going to take for the New York State Assembly and Senate to stop being Democrats or Republicans and do what is best for the citizens of New York state?

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