Just two school districts — out of nearly 700 in New York — will be limited to the new zero-tax hike contingency budget provision of the state’s new property tax cap law next year.

After failing to have either of two budget proposals approved by the electorate, the 1,500-pupil Cheektowaga-Sloan and the 355-pupil Oppenheim-Ephratah school districts will implement budgets for the 2013-14 school year using the current year’s tax levy, which equals no tax hike.

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Property tax burdens in New York’s counties, based on U.S. Census data crunched by the Tax Foundation, are presented in an online map widget unveiled yesterday as part of Governor Andrew Cuomo’s new “CitizenConnects” program.

But the Tax Foundation’s countywide data, which reflect the tax on a median-priced home, aren’t actually very useful in comparing property tax burdens in different communities.  Taxes within counties can differ significantly from one town or city to the next, even within the same town.  That’s mainly because school taxes dominate the tax levy, and school districts cross town lines. One town may be divided into portions of two or three — or even a half dozen or more — school districts. In addition to county, town and school taxes, property owners also may pay taxes to one or more special districts that exist to fund libraries, fire protection and other special purposes. Each is subject to Cuomo’s new cap on property tax levies.

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Some state Assembly members from communities most heavily damaged by flooding after Hurricane Irene have introduced a bill (A.8655) that would exclude “emergency expenditures … necessary as a result of damage to, or destruction of, a school building or school equipment” from the new property tax cap.

Think about it for a minute: you represent a small rural community, already saddled with very high effective property tax rates, in which a big chunk of the taxable property (not just the local school building) has been damaged or destroyed in a flood.  It’s so bad that some property owners are packing up and leaving, while many of those remaining in the flood zones still aren’t sure if they can afford to rebuild, much less pay a school property tax bill that arrived in their mailboxes (or their banks’ mailboxes) a week after the flood hit.  Barring an influx of special aid from the state, and even with the new tax cap in place, this means the undamaged property will be paying a significant tax hike to meet the levy target set before the flood.  How in the world can you justify raising the levy even further under these circumstances?

The state Department of Taxation and Finance has issued “Guidelines for Implementation” of New York’s new tax cap.  In addition, on a web page of links related to the tax cap, the agency has posted its first-ever annual estimates of growth in assessed property value due to new construction for all New York counties and municipalities outside New York City.

Under the recently enacted tax cap law, beginning with 2012 fiscal years, the annual increase in county, city, town, village and special district tax levies is limited to 2 percent or the rate of inflation, whichever is less.  (School districts are affected starting in their 2012-13 budgets.)  Not included under the cap will be any additional taxes generated by new construction in the municipality — or, as the tax cap law puts it, “the percentage by which the full value of the taxable real property in the local government has changed due to physical or quantity change” between the last two final assessment rolls.” (more…)

Over the years, despite chronic complaints about their property taxes, Nassau County residents have shown a remarkable tolerance for high levels of local government spending — which helps explain why their county finances are in such poor shape. Yesterday, they showed that tolerance has its limits.

Voters solidly rejected a proposal to issue $400 million in county bonds to finance the renovation of the Nassau County Coliseum, home of the NHL’s New York Islanders, and to build a new minor league baseball stadium.

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As if it wasn’t bad enough that New York imposes some of the nation’s highest property taxes, the Empire State’s patchwork system of local property tax administration is rated the nation’s worst in a new scorecard compiled by a corporate-sponsored tax organization.

The Council on State Taxation (COST) assigned New York an overall grade of “F” based on an analysis of three criteria described as follows:

• A fair property tax system must have standardized filing, remittance and appeal procedures throughout the state;
• The appeal process for property tax disputes must be before an independent tribunal, in a de novo hearing, without a pay-to-play requirement for disputed property taxes; and
• The property tax burden must be balanced and uniform and not shifted onto business taxpayers.

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Governors often veto legislation on narrow technical grounds, effectively leaving the door ajar for sponsors of bad bills to try again with a somewhat different approach. But that’s not the case with Gov. Andrew Cuomo’s just-released Veto Message 23 of 2011, rejecting a union-backed measure that would have allowed school districts to cover a portion of their teacher pension costs with bonds.

Here’s the meat of the veto message:

When I took office earlier this year, I made a firm commitment to the people of this State that the days of irresponsible fiscal practices are over. I pledged to put an end to the unsustainable spending and rampant borrowing that has burdened New Yorkers with some of the highest property and school taxes in the nation. To that end, this year, with the help of the Legislature, we enacted historic and landmark legislation to cap local property and school taxes and reduce unfunded mandates on local governments.

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If you haven’t read much about the details of the “mandate relief” provisions approved by the Legislature as the session ended last week, there’s a good reason for it: virtually none of the relief priorities cited by the state’s major local government groups were included.  Compared to this, the Senate Republicans’ lengthier one-house mandate relief bill was downright trail-blazing, since that measure at least touched on a few potential big-ticket items such as binding arbitration guidelines for police and fire unions, and costly prevailing wage requirements for government contractors.

The principal innovation in the enacted bill is the creation of an 11-member Mandate Relief Council, controlled by seven gubernatorial appointees, to “identify and review mandates that can be eliminated or reformed, and make such other and further inquiries, reports and recommendations as the council may deem necessary and prudent to effecctuate its mission of mandate relief.”

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A 2016 expiration date was, indeed, added to the agreed-upon property tax cap provisions of the monster omnibus bill now being cooked up in the Legislature.  However, based on information provided in the past hour by the governor’s office and the Senate majority, the language still provides that the tax cap will remain in effect as long as there are state rent control laws for New York City.   Which is (or might be) good news.

Why add any date, you ask? Apparently, since rent control is now set to sunset in four years,  folks at the negotiating table thought taxpayers outside the city would find it more reassuring if the tax cap was given a later expiration date–even though, once again, the intent of the law is that the cap shall remain in full effect as long as the state has a rent control law.  Which will be for a very long time.  Which means the cap’s sunset date is essentially symbolic — a sort of painted scenery backdrop.

Perplexed?  You’re not alone. Final judgements on what the Legislature and governor have wrought will have to await release of the actual bill language.  Unfortunately, this being end of session, the Legislature may vote on the package before the ink has dried.

This Daily News blog post quotes Assembly Speaker Sheldon Silver as saying the agreed-upon property tax cap will expire in five years.  If that’s true, the cap is not worth the paper it’s written on–since, as explained here and here, one house of the Legislature will be able to kill the cap in five years merely by doing nothing.  In the meantime, the cap will partially exclude skyrocketing pension costs. So during the five years the two percent cap is in existence, it will reach 4 to 5 percent (or perhaps even more) in some places–mainly the poorest places with the highest effective tax rates.  And then, before it can have much of an effect, it will be as good as gone.  (more…)