Property taxes.

No New York issue is more talked about than property taxes.  We need property tax reform that is undertaken wisely and in ways that fairly promote our most important goals.

Ken Dow believes that property taxes should be addressed in accordance with three priorities: 1) ensuring that our children’s schools are sufficiently funded to provide excellent education 2) relieving taxpayers who are facing tax bills that exceed their ability to pay, and 3) keeping the overall tax levels as low as possible without sacrificing the first two priorities.

Circuit breakers first.  The first step toward property tax reform should therefore be the implementation of circuit breakers.  Circuit breakers ensure that no taxpayer pays more than they can afford by limiting the property tax paid by any individual taxpayer to a percentage of the taxpayer’s income.  Circuit breakers provide relief to the taxpayers who need it the most.

Circuit breakers give real relief to taxpayers to who can’t afford their property taxes.  A tax cap limits further tax increases in general, but may not help a taxpayer who is already overburdened.  While both circuit breakers and caps have benefits, providing relief to people who can’t afford their taxes has to be a higher priority.

Prudent tax reform. Some suggest a complete shift of school funding from property taxes to income taxes.  While I support a partial shift of school funding from property to income taxes, I do not favor making school funding wholly dependent upon income tax revenues.  There are several reasons why:  1) Diversification of tax revenues.  Diversification is an important characteristic in a state tax structure.  An important distinction between a property tax and an income tax is that the amount of revenue received through an income tax varies with the economy.  Income tax rates are established in advance and the amount of state revenue fluctuates along with the earnings of taxpayers.  In New York, which receives a large part of its tax revenues from the Wall Street financial industry, the state is vulnerable to significant fluctuations in state revenue from income taxes, as is happening this year.  A property tax is a more stable source of tax revenue, and it should remain a part of the overall tax structure in New York, although it needs to be dramatically reformed.  2) Income sheltering.  Income of wealthy and high-income people may be sheltered and enable them to avoid paying a fair share.  It would defeat the purpose of using an income tax-based system if the people most able to pay were able to find ways to avoid paying at all.  3)  Regressive income taxes.  As it currently exists, the income tax structure in New York weighs heavily on lower and middle-income earners.  We don’t want to shift the tax burden from one group of people who can’t bear it to another group of people who can’t bear it.  Shifting school funding to income taxes must be done in conjunction with making the income tax system more progressive so that the highest-income earners carry a little more of the weight.  4)  Fairness to all.  Some people have a lot of income but not much property; others have little income but substantial property.  A property tax based revenue system favors the first group and an income tax based revenue system favors the second.  While people naturally support the ideas most beneficial to themselves, we as a state should be striving for a fair and equitable tax system.  That means avoiding a system that places an unfair burden on some people or allows others to get away without paying a fair share.  A blended system of tax collection is the best way to do that.

My opponent: The Saland Plan.  My opponent, Stephen Saland, and the Senate Republicans have been touting property tax legislation that is a sham, not a plan.  The “Saland Plan” would simply allow any school district to vote to eliminate property taxes as a means of funding its schools, with “the State” making up the difference.  The problem is that the Saland proposal does not even hint at how the State is going to come up with the $9 billion or more that would be required to make up the lost revenue.  Joe Bruno has suggested it could be made up with video lottery games (VLTs) and by collecting sales taxes on Indian Reservations. Not surprisingly, no one takes the Saland proposal seriously, and some newspaper editorials have openly mocked it.

The Saland property tax “plan” is a perfect example of what is wrong with the entrenched Senate Republicans and the 28-year incumbency of Stephen Saland.  After many years of growing concern about property taxes in New York, the Republican legislation put forward to deal with this dire problem is nothing more than a smokescreen to allow Stephen Saland and the Senate Republicans to pretend they are dealing with the issue while in fact doing nothing but protecting the status quo.

We deserve proposals from our State Senator that are realistic, where expenditures are balanced by real revenues, not imaginary ones.  On every issue of concern to New Yorkers, and especially on an issue as important as property taxes, we deserve better than we are getting.