If
New York is considering a cap on the amount property taxes can increase, it might make sense to look at the experience other states who’ve tried the idea:
Massachusetts proves that a property tax cap - while popular - is an ineffective way either to provide tax help or to protect equitable education funding. Massachusetts' three-decades-long experiment has exacerbated inequities in public school funding, reduced valuable local services ... And while the cap reined in property taxes when it was first implemented, taxes have since gone up at a rate similar to New York's.
Those words of caution come from Greg Jobin-Leeds, c
hairman of the Schott Foundation for Public Education in an op-ed in today’s Newsday. Why was the cap so ineffective (and even destructive)? Because, as common sense would lead one to believe, a cap doesn’t do anything to control costs or increase state aid, instead:
“a cap merely forces spending cuts. It doesn't lower energy, transportation or health care costs. It doesn't improve management skills, hire better personnel or innovate. Districts have been forced to make cuts to basic teaching staff in addition to art, music, athletic programs and other services provided by schools.
What’s worse, there’s good reason to believe a cap would be even more disastrous for New York:
Massachusetts' cap was first implemented during an economic boom - so greater state aid could compensate for the loss of property taxes - and when the student population was waning. Instituting this cap in New York now - as the state faces an economic downturn, budgetary concerns and expanding student enrollment - would have a punishing impact on public school children.
And what about equity?
Since the cap began, Massachusetts has seen dramatic growth in school inequity. This should be a red flag to New York, which already has one of the widest gaps between rich and poor in the nation. Wealthy communities in Massachusetts pass annual tax-cap overrides and continue to fully fund their schools. But the rest of the state cannot afford to do so and rely only on state aid.
Yikes! After a 15 year fight for CFE funding, fans of the ‘tax cap’ could undermine that historic victory in 15 days this August.
Contrast Jobin-Leed’s wise words with those of Senate Majority Leader Skelos in today’s New York Sun. Discussing a millionaire’s tax, he pipes:
"You are going to chase the people out of the state if you do that…Those taxes are going come down to you and me. It's not going to be millionaires, they are going to come right down. They are going to hit everybody."
Chase people out? That’s not what happened the last time New York asked the wealthy to chip in a little more in order to keep the state running, between 2003-2005. There were more high income tax filers when New York phased out the tax than when it began.
We’re not sure where Dean thinks New York’s millionaire’s would move to, anyway. Certainly not New Jersey, where taxes on the rich are 30% higher than New York’s. (A fact which hasn’t pushed New Jersey’s rich out of the garden state either).
Dean’s fears about a millionaire’s tax “trickling down” to “everybody,” seem more than a little misplaced, since no one anywhere is proposing that. Dean must be getting worried that once New Yorkers realize the consequences of his slash and burn plan for cutting our way out of the budget gap, they’ll be even more keen on asking the most wealthy to pay their fair share (an idea they already support 4 -1 ).
The last word today goes to Senator Libous:
“Hard working tax payers here in the Southern Tier and around the state are paying too much for school taxes. That's a fact, it comes through loud and clear in every poll. At the same time, we have to be fair and equitable to the school districts, you can't just cap something and not allow them to be able to pay the bills, because fuel energy costs go up, transportation costs go up.”
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