Here’s what we know about property taxes, according to a recently released study by the Long Island Regional Planning Council:
- They are a “significant impediment to the economic well-being of Long Island.”
- Many families – particularly retirees on a fixed income – cannot afford them.
- They are a “barrier” for young families or single-earner households who can afford the monthly mortgage payments but not the tax bill.
- They are unfair to minority neighborhoods which have “borne a disproportionate share of the burden.”
The report, which was conducted by the Public Financial Group and the National Center for Suburban Studies at Hofstra University, also notes that Long Island’s property taxes are high compared with local governments both nationally and in the metropolitan area.
So no, you were not imagining that taxes in Nassau County are high.
Unsaid in the report is the impact of local school districts.
Nearly two-thirds of property taxes go to school districts and the districts’ reliance on property taxes has resulted in a wide disparity between per-pupil spending between districts.
This disparity consists of – surprise, surprise – wealthy districts spending well more than less wealthy districts.
The report does note that the state’s tax cap has slowed the growth in property taxes, but questions how long this will be sustainable, particularly after the recently imposed federal cap on the deduction for state and local taxes.
The report does not mention the barrier the tax cap places on less wealthy school districts trying to narrow the gap between them and wealthier school districts by requiring 60 percent of the vote to exceed the tax cap.
Imagine Andrew Cuomo’s reaction if the same 60 percent requirement were imposed on electing the state’s government.
The Long Island planning council report offered several alternatives, both big and small, that could significantly reduce Long Island’s reliance on property taxes.
One imaginative idea offers targeted relief in the form of a circuit-breaker, which would limit the percentage a person pays in property taxes based on income.
This addresses the fundamental flaw in property taxes: they do not take into account a person’s ability to pay.
A second idea is proposed legislation known as the Internet Fairness Conformity Act to extend sales tax collections on online sales.
This bill is a no-brainer. Online stores located outside New York currently are not required to collect sales taxes when selling to New Yorkers and can, therefore, charge less than brick-and-mortar stores.
It also costs Nassau County an estimated $50 million to $100 million a year in lost revenue.
The legislation has the support of Cuomo, the state Assembly, Nassau County Executive Laura Curran and Suffolk County Executive Steve Bellone and retailers statewide.
But the legislation has been blocked by Republicans in the state Senate.
Senate Majority Leader John Flanagan (R-Northport) says he opposes the bill because it raises taxes. If so, he should level the playing field by helping cut local sales taxes, and coming up with a plan to replace the lost taxes.
A more likely scenario is for Senate Republicans to lose their one-vote advantage in the fall. In the meantime, local businesses should press all candidates for state Senate on where they stand on the legislation.
Any candidate who says he or she supports local businesses and business districts but does not support this legislation is not telling the truth.
The fairest and easiest way to replace property taxes is a local income tax.
The regional planning council said a local income tax rate of 1 percent of gross earnings would generate $1.4 billion. This is what is used by the City of Yonkers.
We prefer the approach taken by New York City – a surcharge on what taxpayers would owe the state in personal income taxes. As the study points out, because the state personal income tax is progressive, the surcharge would be as well.
The study offers several other proposals.
Some such as excise taxes on e-cigarettes, plastic grocery bags and sugary drinks as well as a local sales tax on motor fuel are worth debating.
Other such as legalizing and taxing recreational marijuana should have been passed long ago.
In either case, leaders in Nassau and Suffolk counties need to begin a serious discussion on these proposals.
But keep in mind, the status quo is no longer sustainable.