Politicians from Albany have been complaining for years that the state’s capital city is fiscally strapped because 60 percent of the property within its boundaries, much of it state owned, is tax exempt. To address this perennial complaint, members of Albany’s legislative delegation have reintroduced a bill that would require the state (i.e., everyone else in New York) to make a payment in lieu of local property taxes on one of its largest parcels in the city, the Harriman Office Campus.
“As the seat of New York State government, Albany faces a unique challenge in that the majority of the property is removed from the city’s tax rolls because they are [sic] government owned facilities,” said Assemblywoman Pat Fahy.
However, the data don’t support the notion that Albany is more “challenged” than other upstate cities.Here’s a comparison of 2010 revenue and spending statistics for Albany and five comparable upstate cities, including nearby Schenectady and Troy, as generated by the Benchmarking New York web app at Empire Center’s SeeThroughNY website. Note that the per-capita full value of taxable property is considerably higher in Albany than in any of the other cities. Its property taxes per-capita are also much higher, although the effective property tax rate in Albany (unadjusted for homestead exemptions) is in line with those of the other cities in the group. Indeed, measured on a per-capita basis, Albany is among the most heavily taxed cities in the state.
Albany officials might cite the high tax burden as evidence that the capital city has its municipal services strained by the presence of all those state offices and workers. On the other side of the ledger, however, Albany’s per-capita spending is close to the norm for the comparison group, ranking 25th out of all 61 cities in the state. The other cities in the comparison group collect less in property taxes than Albany, but make up the difference with other revenue sources including fees, state aid, and sales tax allotments from their counties.
A thought experiment: what would Albany look like if it wasn’t the state capital?