A tax commission led by Democrat Carl McCall and George Pataki is taking a carrot and stick approach to the state's sky-high property tax burden. A report released by the tax panel on Tuesday would link homeowner's property tax rebates to local governments capping their taxes and sharing services. Nick Reisman filed the following report.
NEW YORK STATE -- "Why do we pay a lot of taxes? Because we have a lot of governments. We literally have a lot of governments," Governor Cuomo said.
Governor Andrew Cuomo created the commission led by McCall, a former comptroller and one-time Democratic primary opponent, and Pataki, a former Republican Governor who defeated his father for a fourth term in 1994. In addition to a series of tax code reductions aimed at businesses, the commission backs a two year freeze on homeowners' property taxes. The catch is that local governments must budget under the state's two percent cap on property taxes and then either share services or consolidate their operations.
"There's a concept called shared services, which is exactly right. Get these governments to work together to streamline their operations, not everyone has to do everything," Cuomo went on to say.
But advocates for local governments say the panel is missing an important component of tax reduction, a reduction of state mandated spending on municipalities. They also point out that Albany, meanwhile, has not increased state aid to local governments for the last five years.
"We have to stop hanging our hat on dissolving a few local governments is going to save our property tax problem. We need a partnership between our state and local governments. That's the only way we're going to tackle the local property tax beast," said Peter Baynes, NYCOM Executive Director.
Business groups, however, cheered the recommendations to lower and simplify corporate taxes as well as support for a faster phase out a utility tax surcharge.
"Importantly what you see in this report are fairly broad-based reforms. Not targeted tax cuts, but across the board rate reductions for corporate franchise taxpayers, some restructuring of the corporate franchise tax that would benefit everyone subject to it," said Ken Pokalsky, Business Council Vice President.
But the political left in Albany is not impressed, saying that much of the proposals go toward aiding the wealthy.
"I think the Assembly in particular is going to find it difficult to provide more corporate welfare, more giveaways to the wealthy when schools and public services don't have the funds they need." said Michael Kink, Strong Economy For All Executive Director.
The issue of taxes is expected to be a heated topic, come next year.
New York City Mayor Elect Bill de Blasio supports raising taxes on the rich to pay for universal pre-Kindergarten. Cuomo has indicated which direction he'll take on that plan.