Senate Republican leaders on Thursday said they have concerns with Gov. Andrew Cuomo’s proposal for a property-tax freeze, warning it could negatively impact local governments and schools.
Senate Republican Leader Dean Skelos, R-Nassau County, and Deputy GOP Leader Thomas Libous, R-Binghamton, said in separate interviews with Gannett’s Albany Bureau that they will consider changes to Cuomo’s signature proposal during budget negotiations over the next month.
Cuomo’s plan calls for the state to put a two-year freeze on property taxes if local governments stay within the property-tax cap and, in year two, commit to consolidating services. It would cost about $1 billion a year.
Skelos said schools and municipalities have already been limited in their revenue because of the tax cap, implemented in 2011. The cap limits the growth in taxes to about 2 percent a year. Senate Republicans have long been a proponent of property-tax relief.
“I think we’re trying to figure out if the second year actually works in terms of the consolidation of services,” Skelos said. “A lot of communities, whether it’s villages or school districts, because of the 2 percent property-tax cap have been doing this.”
Skelos said local governments and schools in a lot of places have no room to grow the tax base. Libous said he’s received concerns from local governments and schools.
“The locals hate year two. We have to be respectful of the locals,” Libous said. “And at the end of the day, I would like to see us go back to a simpler property-tax rebate program that isn’t going to restrict the local governments to do some of the things that the governor’s proposed.”
Senate Republicans have long supported a property-tax rebate check each year that was eliminated in 2009 because of the state’s budget woes. Last year, the Legislature and Cuomo agreed to give a $350 rebate check this fall to families with children.
Cuomo has made the property-tax freeze a top priority for the fiscal year that starts April 1. He said the tax cap has limited the growth in taxes, but the freeze would push local governments and schools to consolidate to cut long-term costs.
New York has among the highest property taxes in the nation, and New York has 10,500 taxing entities. Cuomo started a campaign Wednesday, called “No Excuses,” to get the public to lobby their lawmakers to support his initiative.
“The single greatest obstacle to this state’s long-term financial health is the property tax,” Cuomo said Tuesday on “The Capitol Pressroom,” a public-radio show. “And it’s not just the property tax – it’s the structure that is driving the property tax, which is the predominance of local governments. It’s the 10,500 local governments.”
Cuomo spokeswoman Melissa DeRosa said the whole point is to achieve long-term savings through consolidating services.
“There’s no reason to freeze taxes if you are not reducing costs because otherwise it doesn’t accomplish anything,” she said in a statement. “Our freeze allows local governments time to achieve cost savings. If they won’t cut the costs, they don’t get the freeze.”
Republicans control the Senate with the five-member Independent Democratic Conference. Democrats control the Assembly, and some of them have also questioned the viability of Cuomo’s proposal.
The IDC’s leader, Sen. Jeff Klein, D-Bronx, said the conference has its own tax-relief plan it proposed last November. He offered to use excess state revenue to provide aid to struggling schools and require wealthier ones to use the money for property-tax relief.
“Senator Klein is fighting for the IDC’s HELP plan, which he believes is the best way to cut property taxes across New York state,” said Klein spokesman Jason Elan.
In a report Wednesday, the state Association of Counties said the state should pay for more unfunded mandates to local governments. That would allow municipalities and schools to cut taxes, they said.
“A simpler, fairer, and far more transparent property tax relief proposal for taxpayers is a broad realignment of the fiscal relationship between the state and counties,” the group’s report said.
Some lawmakers have been receptive of Cuomo’s proposal.
“In these tough economic times, we must find ways to lower the crushing property tax rates that are stifling economic opportunity throughout New York,” Sen. Ted O’Brien, D-Irondequoit, Monroe County, said in a statement.
Sen. Mark Grisanti, R-Buffalo, said he supports the tax freeze, but it needs to be coupled with mandate relief.
Under the tax freeze, the rebate would come as a check in the fall to homeowners in communities that stay within the tax cap. The amount would be the difference between keeping property taxes flat and the increase under the cap.
In year two for residents to get the rebates, local governments and schools would need to abide by the cap and have a plan to consolidate and streamline services to cut the tax levy by 1 percent by 2017.
The average rebate would be $200 upstate and $580 in the New York City suburbs. In Westchester County, the rebate check would average at least $800, Cuomo’s office said. Overall, 2.8 million households would get a check. It would be limited to households with incomes less than $500,000.