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Michael Miller

Viewpoint

By Michael Miller
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2012: The Year Time Ran Out

Already, we have local public officials talking the usual tough talk about getting Long Island’s “fair share” of state aid to school districts. Meanwhile, 360 upstate and rural school districts have formed an alliance (the School Finance Consortium) to shift significant aid money away from Long Island and toward their communities. In newspaper editorials and community forums, there is a new push against Long Island, which is seen as statistically wealthier and far more able to absorb aid cuts.

There are different ways of measuring “high property taxes.” Measured in the percentage of home value paid in taxes, as did a recent Tax Foundation study, the four highest-taxed U.S. counties are all in upstate New York, led by Orleans County, with a median tax burden of $2,408 on a typical $96,900 home. Nationally, property taxes are 1.5 percent of home value. In Orleans County, it’s 2.99.

In last year’s report, nine out of the top 10 counties in median property taxes as a percentage of median home value were in upstate New York, led by Monroe County (home of Rochester, at 2.89 percent).

When property taxes are compared to median household incomes, Nassau County is in fourth place out of 1,824 surveyed counties across the country (median household income of $104,559, with 8.11 percent going to taxes). Our sister suburbs of Rockland, Westchester, Putnam and Suffolk follow behind in that order.

Every time one of these reports is issued, legislators and newspapers in every region of New York use it to prove that they have the highest property tax burden.

If we are to salvage the best parts of what we have, we will have to realize that we’re in this together, and that we must reason out new ways of doing business. New. Not finessing flawed and unfair concepts of taxation left over from the days when the regulation and containment of witchcraft was considered a desirable government service.

Onteora is just west of Woodstock and just south of Hunter Mountain. The school superintendent is making the rounds at town and village board meetings. She tells them that on our current path, with costs of many kinds rising and the tax caps, about 300 New York school districts will be insolvent within several years. “Eventually…all districts go under.” Pretty bleak.

No one can honestly say it wasn’t foreseen. But lots of people will.

I know one bag of nonsense that will be very big in 2012. Over the past twenty years, local governments and districts became addicted to making historically-low payments to the various state pension systems. School districts, for example, are now paying 11.11 percent of base payroll to cover educator pensions, the first double-digit rate since 1988-1989. Last year, they were paying 8.67 percent. From 2001 to 2003, they were paying 0.36 percent. The rates, based on investment performance assumptions and results, are currently 16.3 percent of payroll for most government units.

Now we have phony hysterics. “Public Pensions Will Clobber LI,” said Newsday.

In fact, the payments are approaching where they’ve been for much of my life. School districts were regularly paying over 20 percent in the 1970s and 1980s, and the low percentage years are the real anomalies. The rates are announced a couple of years in advance. Everyone was warned about this even before Lehman went down.

You don’t want pensions for public employees anymore, we can talk about it. But must we pretend that nobody saw this coming, or that it’s unprecedented, or that the pension system is out of control?

The low contributions helped mask the very real cracks in our systems of local government finance, giving cover to politicians who would do anything to avoid crossing the forces that greatly benefit from our grossly regressive taxing systems. Now the train has two wheels skipping off the tracks, and what we’ve done over the last few years will force us to make hard, painful corrections.

We have health insurance costs, energy costs, food costs and other expenses that are out of local control. Things are breaking. Most officials show little inclination to actually rethink what remaining employees should be doing. Or how to even how to begin.

Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. Email: millercolumn@optimum.net