Friday, 15 January 2010 00:00
We don’t apply a single income tax rate to all the residents of an entire ZIP code or school district, so why do we still do it that way with property taxes? One theoretical partial bandage for the broken property tax system would be to apply state school aid on a household-by-household basis, so that middle-income families are not penalized for living in “high wealth” districts.
Seventeen or 18 years ago, I was part of a team drafting legislation to overhaul the school tax system, and some of our proposed fixes would have caused programming difficulties for the state’s computer systems. Today, we could run the entire state tax program off a laptop computer. We’re limited by what we are willing to do.
About once a decade, when it looks like the state legislature is not going to find a way to paper over the mess that is our school and local government finance system, there’s serious talk of reform. When I signed a lease on an office suite in the Town of Oyster Bay in 1992, the landlord attached a page that described how rents would be recalculated in case there was a switch from property taxes to income taxes.
Last year, state legislators introduced at least eight different bills that would convert some portion of the property tax burden to taxes based on the ability to pay. Some proposals would allow local districts to opt-in. Many suburban leaders are publicly set against even discussion of meaningful reform, and everything sits.
No matter where it ends up going, I’m already tired of hearing the business-as-usual barking by some people that we are somehow cheated out of tax dollars and don’t receive a fair share of state school aid. With fiscal crises at every level growing, can’t we at least have one open and honest discussion about the situation we’re in and why the rest of New York, if anything, wants to take local assistance dollars away from us?
Consider two Glens. The City of Glen Cove here in Nassau County has 2,900 students enrolled in its school system and the City of Glens Falls in Warren County, just north of Saratoga and south of Lake George, has 2,300 students. Glens Falls has $1.06 billion in total property wealth behind its students and its local governments; Glen Cove has $4.7 billion. In Glens Falls, the median income per family is $42,000; in Glen Cove it is $122,000. Just over 21 percent of those below age 18 in Glens Falls live below the official poverty line, in a city that Look magazine once named “Hometown U.S.A.”
There’s a cost of living difference, but not for everything. This morning, gasoline in Glens Falls costs the same $2.88 as in Glen Cove.
Glens Falls receives a little more than twice the total school aid per student than Glen Cove, and last year the two districts received almost precisely the same $2.5 million in federal aid, thanks to temporary stimulus funds. Do the people of Nassau County, which in a 2006 study had 79,000 millionaire households, really want to say to the children of Glens Falls, and 500 other upstate districts, that we deserve a bigger piece of a shriveling pie?
On paper, Glen Cove sits precisely at the middle in property wealth among Nassau County districts, but has a higher total property valuation than 28 New York counties. What should we do?
Of course there are middle and lower-income people in Glen Cove. Of course some people in Glen Cove are shifting things around and struggling to pay property tax bills. But there are alternatives available to Glen Cove. There’s no mansion district in Glens Falls.
The entire state tax system is screwy. As of 2007, New Yorkers earning at Glen Cove’s per capita income level ($86,000) were paying a 21 percent greater share of their family incomes to combined state and local taxes than people earning eight times as much. Some people do very well under our current system. We have options that can start to make things right, if we want to use them.
Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. He lives in New Hyde Park.
Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. Email: email@example.com