postheadericon Administrator Proposes Alternative Tax Relief Strategy

tc_tompkinscourthouse120County Administrator Joe Mareane provided the Legislature an overview the targeted tax relief measures— including a two-year 'freeze' on local property taxes— that have been recommended by a New York State Tax Relief Commission and endorsed by Governor Cuomo as a high priority in the State of the State Address and today’s Budget Message.

But Mareane said that he agrees with the Commission and the Governor that local property taxes in New York State are too high and that creative realignments are needed.  But he added that the way to achieve meaningful, sustainable property tax relief is not through a one-shot, high-cost, low-impact  rebate program but through a major realignment of responsibilities between the State and its counties—with the State, over a phased four-year period assuming the full cost of its major programs, now administered and co-funded by counties.

mareane_120Joe Mareane“By doing so, the State will produce the largest property tax cut in the history of the State—a deep, sustained, across-the-board reduction in property tax burdens for the owners of all classes and types of property,” Administrator Mareane stated.   “The realignment of these responsibilities should produce greater efficiencies in administering the State’s programs, opportunities to realize economies of scale, a more equitable distribution of costs, and better decision-making.  For the first time in generations, the State will be responsible for the full cost of its program and policy decisions,” he said.  “Decisions are always better when the full cost and consequence of the decision is borne by the entity making those decisions.”

Using Tompkins County’s 2014 Budget as an example, the administrator noted that the recommended rebate program would have required more than $300,000 in cuts to reach the County’s 2.26% property tax cap, and would have resulted in a $14.81 saving, including a $7.31 rebate check, for the owner of a median-priced $163,000 home.

Under Mareane’s proposal, in the first year, the State would pay the full state share of its Medicaid program—resulting in an $11.8 million (26%) property tax cut that would save the annual homeowner $294 per year.  In year two, it would take over the full cost of its PreK Special Education and Early Intervention programs—producing an additional $2.6 million (8%) property tax cut, saving the average taxpayer another $64.  In year three, it would assume the full cost of its constitutional obligation to provide legal defense to the indigent, as well as the full cost of its child welfare programs (another $4.2 million, or 14% cut, saving the average taxpayer $105); and in year four, the State would take over full cost of its Temporary Assistance programs and remaining programs that have been delegated to county social services departments, resulting in another $6.9 million (26%) tax cut.

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At the end of four years, once realignment of costs was complete, the administrator said County taxes could be cut by over $25.5 million, or 57%.  The average County tax bill (on the median $163,000 home) would drop from $1,122 to $487—an estimated savings of $636 per year for the average homeowner.  Mareane said the proposal would have a profound impact on the financial and programmatic structure of State and county government.  “By being willing to rethink the way services are delivered and funded, the State and its counties can engage in an important discussion about realigning our relationship in a way that serves the interests of the State, counties, and the taxpayers,” he said.  “...if the State is willing to broaden the scope of the discussion about realignment of responsibilities, the door would be opened to historic levels of sustainable property tax relief in every quarter of New York State.”

Legislators’ reaction to the proposal was favorable, and the Legislature, by unanimous vote, approved a motion that states the Legislature’s support of the proposal and its approach as a basis for further discussion, and encourages Administrator Mareane and members of the Legislature to bring it forward to the New York State Association of Counties and other appropriate partners in the State.

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