N.Y.’s Silver Proposes Property-Tax Cap Similar to Cuomo’s

New York Assembly Speaker Sheldon Silver proposed a 2 percent property-tax cap, a plan similar to the one Governor Andrew Cuomo has pushed lawmakers to pass before their session ends next month. The state’s top Republican legislator said a three-way agreement on a cap has been reached.

The speaker’s proposal, like the one backed by fellow Democrat Cuomo, would prohibit any annual increase above the cap unless it is endorsed by 60 percent of voters in an election, he said today in a statement. The cap would be 2 percent or the rate of inflation, whichever is less.

Silver’s plan would include a so-called sunset provision of an unidentified length that would let lawmakers review the measure at a later date. The provision would be tied to rent stabilization in New York City, according to Silver, who represents Manhattan.

“Hard-working families are saddled with some of the highest property taxes in the nation and need real relief in order to be able to live and raise their children in New York state,” Silver said in the statement. “With this legislation, we are finally able to bring property taxes under control and still provide critical services.”

Three-Way Agreement

The speaker’s plan would exempt pension payments over 2 percent from the previous year and allow a carryover of as much as 1.5 percent when a prior year’s levy was below that year’s limit. Those proposals, along with the sunset provision, weren’t included in the version the Republican-controlled Senate passed in January, said Scott Reif, a spokesman for Senate Majority Leader Dean Skelos, of Rockville Centre in suburban Long Island.

“Other than the sunset provision and minor technical issues, we have reached a three-way agreement on a bill that achieves our goals,” Skelos said late today in a statement posted on his website. The deal “includes 95 percent of the bill we already passed and will finally put the brakes on skyrocketing property taxes,” he said.

Cuomo has been traveling the state since May 10 on his “People First” tour to pressure lawmakers to approve the property-tax cap, tighter rules on ethics and a bill to allow same-sex marriage before their session ends June 20.

Cuomo said today on Talk 1300 AM radio in Albany that he was confident Silver can get his proposal through the Assembly and that it would pass the Senate.

‘People Are Clamoring’

“It’s exactly what we’ve been talking about for years,” said Cuomo, whose cap is similar to one successfully championed last year by New Jersey Governor Chris Christie, a Republican. “It’s what people are clamoring for.”

Relief from state-required spending must accompany a property-tax cap to help avert the layoffs and funding cuts that curbing a school district’s ability to raise revenue would necessitate, said Timothy G. Kremer, executive director of the New York State School Boards Association. The group represents almost 680 school boards and more than 5,000 board members statewide. Cuomo has said he supports so-called mandate relief.

“Unfortunately, lawmakers have focused strictly on limiting a school district’s ability to raise revenue,” Kremer said in a statement. “School boards should be able to invest every dollar they can into academic programs and services for students rather than outdated mandates, inflexible rules and expensive procedures.”

Cuomo said the carve-out for pensions wouldn’t lead to property-tax increases because the “explosion” of retirement benefit costs was a short-term problem. Property taxes, including pension costs, will increase less than 3 percent this year, he said.

‘Too Restrictive’

“The cap plus the explosion in the pension costs would be too restrictive to local governments,” he said.

The cap is tighter than those in New Jersey or Massachusetts, he said. Taxpayers shouldn’t be concerned about the sunset provision because “any law can always be changed,” he said.

“I do welcome a period of time to re-evaluate these numbers in this law,” Cuomo said. “Who knows what’s going to be in four, five, eight years?”

Cuomo, 53, the son of three-term Governor Mario Cuomo, took office in January after he was elected with 61 percent of the vote. Holding to his campaign promise, he reduced total outlays 2 percent in his $132.5 billion budget to help close a $10 billion deficit.

Three of the five counties with the highest annual property taxes in the U.S. are in the state, according to the Tax Foundation in Washington. Topping the New York list is suburban Westchester County, where the median levy was $9,044 in 2009. The median for U.S. counties was $1,917.

To contact the reporters on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net; Martin Z. Braun in New York at mbraun6@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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