Transcript of the
Seventh Commission Meeting
April 10, 2008
Syracuse City Hall
Thomas Suozzi, Chair
Shirley Strum Kenny
John Reid, Executive Director
Thank you Chairman. Welcome to Syracuse, and good afternoon everyone. I'm Bea
Gonzalez. I'm President of the Syracuse Common Council and, Commission members,
let me formally welcome you to the legislative chamber of the Syracuse Common
Council. The work of the Commission on Property Tax Relief is critical to the well-being
of our community and the State of New York. If your work meets the expectations that
have been outlined to examine the root causes of high property taxes, to identify ways to
make the state's property tax system fairer and develop a fair and effective school
property tax path to hold the line on property tax growth. I believe we will then increase
our high school graduation rates, prepare a workforce any employer would be proud of,
attract employers choice, decrease poverty, increase homeownership and grow our
middle class. You have taken on no small feat, but it is critical to us all. Thank you, and
welcome to Syracuse.
Thank you very, very much. Its president, is that correct?
Of the City Council?
Thank you so much for having us. I just want to thank you and the mayor and all the
people of Syracuse for hosting us here in this beautiful building. This is really a fantastic
building and such a beautiful city and we're very, very grateful for the opportunity to be
here with you today.
My name's Tom Suozzi. I'm the Nassau County Executive and Chairman of the New
York State Commission on Property Tax Relief. I'm joined here today by the other
commission members, one of whom you know very well. The former County Executive
of Onondaga county, a close friend of mine, Nick Pirro, who retired back in December
31st of 2007 and took a big two week vacation before he came back to work on this some
And Shirley Strum Kenny from Stony Brook University. Merryl Tisch, from the New
York Board of Regents. Michael Solomon from public finance of Merrill Lynch and
Paul Tokasz former Majority Leader of the New York State Assembly. We're also
joined today by the members of our staff who've been assigned to this topic. John Reid
who is the Executive Director and our special advisors who have been asked to give us
different perspectives on the different things we're looking at from a professional
Bob Ward for the Molecular Institute formally representing the Business Council of New
York, Lisa Donner from the Working Families Party. She's a policy director. Elizabeth
Lynam from Citizen's Budget Commission and Karen Scharff from Citizen's Action.
This is actually the sixth hearing that we've held in the state thus far. The sixth meeting
we've held so far. We've also held informal roundtable discussions with different
community representatives and different groups throughout the state to try and get as
many different viewpoints as possible regarding the issue of property taxes. A problem
which we all agree upon, but the solution to it, which is going to be a little bit tougher to
figure out. This commission was created by Executive Order by then Governor Spitzer
and the Executive Order was resigned by Governor Paterson immediately after his
swearing in. Governor Paterson, as his predecessor, has made this a major priority of his
administration. On the third day after he was sworn into office, he came to a commission
hearing such as this to open up the meeting and, obviously, with a lot of different things
going on in his administration at the time took, the time out to travel with us to Rochester
to kick off the meeting and to pledge his commitment to address the problem of property
taxes in New York State. That, in and off itself, is a major accomplishment for people
that are concerned about property taxes because we've been battling each other in our
local communities for years, whether it be the school board level or at the city level or the
county level or the town level or the village level. Trying to hold our local officials
accountable for the property tax problem, when in reality there is systemic, state-wide
problem in New York State that gives us the highest local taxes in America. Local taxes
in New York State are 79% above the national average of the highest local taxes in
America. As I said, we all agree on what the problem is, coming up with a solution is
going to be tougher.
This Commission has been charged with the task of looking at several different things
including, certainly, the issue of a property tax cap, looking at other states throughout the
nation and some bad experiences that have been had in places like California where they
got property tax relief, but their school education system went down in the process, or
states like Massachusetts, which has had a more successful effort with property tax caps
where their taxes have gone down as compared to the rest of the nation – where they rank
with the rest of the nation, but it has not impacted negatively their school education
So we have to look at a property tax cap. We also have to look at the root causes. Why
are property taxes going up? One of the things that I'm sure you've heard the county
executive Pirro speak about many times in the - as well as local officials, is mandates
from the state where the state mandates that certain things must be done, but they don't
give you the state aid to pay for those different mandates.
Another major objective of this Commission is that while addressing property taxes
we've got to preserve, if not work to enhance, the quality of education in our state. We
cannot be sustainable for the long term. We cannot compete economically for the long
term. In the current global economy, what you earn is based upon what you learn, and
we have to have a quality education system. We cannot hurt our education system in our
efforts to try and address the property tax problem. We're looking at these and many
other areas, as I've said in other public forums we're looking at property tax caps, we're
looking at mandate relief and other root causes and we're looking at a thing known as
Circuit Breakers. The idea that you shouldn't have to pay above a certain percentage of
your income in property taxes. For us to be successful, it's going to require us to get the
input and, ultimately, consensus from disparate groups. From Democrats to Republicans,
from upstate to downstate, urban, suburban and rural as well as people who historically
have been concerned about property taxes, senior citizens on a fixed income, business
groups, anti-tax groups to people very, very concerned about education. Our school
boards, our school superintendents, the teachers unions. We need to get all those parties
together in some sort of consensus if we're going to be successful in addressing this
problem. Again, it is a problem. Down where I live on Long Island, and the rest of
downstate, we have three of the 10 highest property tax amounts – or our people have the
highest average property tax burden in dollars. Three out of the 10 highest in the United
States of America. Here in central New York and other parts of upstate New York, 17 of
the 20 highest effective tax rates in the nation are in New York State. Onondaga County,
for example, is number seven in the nation as far as the highest effective property tax
rate, which is how much you pay in property taxes as a percentage of the value of your
home. This is a very real problem, and for us to be successful, again, we need the people
of downstate to recognize that even though the dollar amount of taxes is lower per person
upstate, that it's still crushing the people that live here and they have a very high effective
tax rate. We need the people of upstate to recognize that although the value of the homes
are worth more downstate, that the dollar amount of their property taxes are crushing the
people, especially those on fixed incomes, downstate. So this is going to be a real
challenge for all of us. Before we go any further, I'm going to ask if any of the
Commission members want to just make any brief remarks before we go forward with the
meeting. Nick, would you like to –
Let me, first of all, welcome the Commission to Syracuse, and let me assure that
everyone in the room and that's listening is that this group has put a lot of time in, we've
heard testimony from about every direction that you can receive it and there's been a lot
of discussion about our report that's due on May 2, but everyone's input is valuable and
we appreciate your being here today.
Okay Nick. Shirley, would you like to add anything?
Shirley Strum Kenny
Nope, that's fine.
Merryl? Paul? Michael? Okay, today we're going to have – our goal is to – we are
really scheduled to end by 4:00. I'm going to try and shoot for 3:30, but we'll be happy to
stay 'til 4:00 if it's necessary to give people an opportunity to speak, but we must leave at
4:00 because we have a very tight schedule for some people. One of our members has to
leave earlier because she has a plane to catch.
What we're going to do now is we're going to have a presentation from our Executive
Director, John Reid. I'll ask him to briefly introduce some of his staff members that are
here. Then we've invited in our different regions of the state, different expert testimony,
and today we're going to joined by Frank Mauro the Director of the Fiscal Policy
Institute. In the interests of equal time, we have had in other forums had E.J. McMahon
from the Manhattan Institute testify because they really represent different ends of the
spectrum regarding fiscal policy here in the state of New York both which have very
valid points to make. We're also going to be joined today by William Duncombe, the
Professor of Public Administration at Syracuse University, and then were going to open it
up to our different scheduled speaker list and then people have signed up to speak beyond
the scheduled speaker list. So with that, I'm going to introduce John Reid the Executive
Director of this Property Tax Relief Commission. John has previously served on another
statewide Commission regarding higher education and he's only been in state government
for about a year. He comes out of the private sector having worked for Coca-Cola and
Company, and we're very fortunate that he and the rest of this staff he's assembled have
been very, very professional in helping us to gather data and look at what's going on in
the rest of the country and the history of New York State to try and address these
Thank you Mr. Chairmen. I want to direct the Commission members to your book and
just take you quickly through it. I think you'll see the threads from the last meeting
coming together quite nicely in the book. Before I do that, let me just tell you that the
cooperation that we've received from all of the state agencies that have been mandated by
the Governor to cooperate has been excellent. We are now deeply into work with the
State Education Department, the State Comptroller, the Department of Tax and Finance,
the Governor's Office of Regulatory Reform, the Office of Real Property Services and the
Division of Budget just to name a few.
Mr. Chairman, you directed us to comb through the testimony of the first meetings
including all of the roundtables and all of the Commission meetings that we had and
come up with a list of the top 20 mandates. If you look at Section 3 of your book, you
will see a very simple two-page document that attempts to lay that out in a way that's, I
think, quite digestible and, again, you can certainly debate the choices that we made as to
what to put on the list. There are literally hundreds that have been measured and
mentioned in testimony, but staff tried to do our best to cull them down to 20 and they are
there in Section 3.
In Section 4 we have our first draft of a working paper that tackles the issue mentioned in
the Executive Order, and that is the issue of the relationship between property taxes and
state aid. This is a very complex relationship, as everybody in the audience and all of the
Commission members know and all of the Special Advisors, more than anybody, knows
if property taxes are looked at in isolation of state aid, you're just not looking at the full
puzzle. On the other hand, if state aid is looked at in isolation of property taxes that's not
complete either. This working paper is attempting to begin to lay out that complexity in a
way that the Commission members can understand the policy interactions of those
subjects. That is in Section 4. In Section 5 we are now providing you with Draft 2. At
the last meeting we said we would do this at this meeting; we've done that. This is Draft
2 of the root causes working paper. In the executive order, the Governor asks us to
investigate the root causes of property tax growth. We're trying to get at that with a paper
that's becoming increasingly comprehensive. I would urge all of the Commission
members to take a look at this. Again, may I just say that we'll leave a comments section
until close of business on Wednesday of next week for all special advisors and all
Commission members. At that point, we'll take a crack at Draft 3. If you look at Section
6, you will see that this is a State Education Department document that at this juncture in
the Commission's work becomes rather critical. That is a document that talks about how
the state aid formula is constructed so that school districts around the state can be
equitably addressed. We thought that that would provide good guidance to the
Commission and to the Special Advisors as we dig into the interactions between state aid
and property taxes.
In Section 7, we thought you would appreciate having a document from the School
Boards Association. It's a new document. The subject is Quality Educators in Every
School, and we think that you'll see that that's a contribution to the Commissions work.
In Section 8 you are seeing a summary of the roundtables that were held in Binghamton
and Syracuse, and we think, again, that these roundtables have been incredibly insightful
and important in generating a lot more discussion than is always possible in Commission
meetings. We thought you'd appreciate having a summary of those roundtables as well.
With that, back to you. Mr. Chairman.
Okay, thank you very much. Now John, we've received another document from the
school boards in the past so that's separate document?
This is added, yes.
So we're going to need, at some point, an index of all the documents that we are going to
have to have – I don't know that I have all my documents. So I –
We are keeping a running record and an archival set of electronic files and hardcopy files
of all whitepapers that have been submitted by outside groups to the commission, all
working papers that are developed by Commission staff and we are keeping a record of
all testimony provided in formal Commission meetings and all participants in regional
roundtables. We think that's available to you at your request.
Okay, very good.
Can I ask a question John? In the mandates – you've listed 20 mandates. Just for a point
of clarification, I think it would be really important to segregate out the legislative
mandates from those that are state agency mandates because I think –
Great point. There's –
So far easier to tackle [inaudible].
[inaudible] the State Education Department versus the legislature.
The Vice-Chancellor's making an extremely good point, and may I say that not only
should that be a next step but I would also say that this list attempted to focus on state
mandates and not federal mandates. If we have failed, it's failed by omission not
commission. We have tried to just filter out those that we have absolutely no control
over, which is the federal mandates and those that are state mandates. But now, you're
right that we should now take the next step of dividing them into those that are regulatory
and those that are statutory and we will do that.
Okay, anything else from the Commission members? Okay, at this time I'd like to bring
forward our first expert testimony, Frank Mauro, who's the director of the Fiscal Policy
Institute. Frank, thank you so much for joining us today. We appreciate it very much.
How much time are you going to go for Frank?
How much time do you have Frank?
But I don't know if I'll take that.
Okay, good. Thank you. Anybody who's testimony is less than the allotted time will
receive more favorable consideration from the Commission members.
I would like to talk about two issues today. One deals with the pressure that state fiscal
policies place on the local real property tax base, and the second is the distribution of the
property tax burden whether it is high or low. In other words, New York State divides
responsibility for the financing of essential public services between itself and its local
governments in a unique way each of the 50 states do. The federal government doesn't
determine that division of labor. New York chooses to place a large amount of
responsibility on local governments. We think that the primary reason for the pressure on
the property tax is the following. One is in Medicaid that the state divides responsibility
between itself and local governments on a basis that has nothing to with the local
governments ability to pay. So local governments with large concentrations of poor
people relative to their tax base, have to use a lot of their property taxing base to meet
that, and it creates great variety within the state in terms of the shares that different
property taxes make. The Governor, in creating the Commission, said that local property
taxes make up 61% of the property taxes in the state, but that's only true if you count
STAR as property taxes.
You meant to say school taxes make up 61%?
Well only if you count STAR as school taxes, but the school taxes that people pay make
up 56% statewide but it varies tremendously when you get to poor rural counties. It's
37% in Allegheny County, 37% in Fulton, 41% in Montgomery and I don't think you can
make policy based on statewide averages. I think that it's important to look at the
property tax burdens that the state shifts down to three categories of governments:
counties, general purpose local governments and school districts. With counties, I think
the primary issue is Medicaid, and I think the state needs to take over a greater share of
Medicaid costs, but it needs to do that in a way that recognizes the differences in ability
to pay of the different counties. For general purpose local governments, cities, towns and
villages, the primary pressure that the state has placed on local governments is a negative.
It's because of not sticking to the revenue sharing commitment. The underlying law,
which gets not withstood every year, is that the state is supposed to share 8% of revenue
with local governments. In the 1980s, when Governor Carey was Governor, we had our
first freeze on that in order to allow a what's now, in retrospect, a relatively small, but
then we thought it was big, personal income tax schedule during the recession of the early
1980s and Governor Carey choose to implement the income tax increase and to freeze
revenue sharing, which means put more pressure on the property tax. In the budget
problems of the early 1990s, no state program was cut more than revenue sharing – no
major state program was cut more than revenue sharing. At the time, it was over a billion
dollars in 1989. By the end of the budget crisis of the first few years of 1990s it was
down to less than $500 million. So I think here, the state has to make a multiyear
commitment, even if it takes 10 to 15 years, to gradually ramp back up revenue sharing.
Third, are school districts. As you mentioned in your introductory remarks, Chairman
Suozzi, that we have a somewhat crazy-quilt system for financing schools and we have a
tremendous reform that has been enacted, and hopefully will be honored over the next
several years. Last year, the Governor proposed and the legislature adopted with very
few modifications a foundation formula, which is a two-step process. One, having a
rational way of determining every school districts needs, and second, dividing
responsibility for that between state and local on a rational basis that's applied
systemically. The foundation formula has basically been honored for two years now.
Although, in both years and the dollar amounts are not huge, the legislature has added
some things to account for political realities, but the basic formula has stuck so I think
what we need to do in school aid to reduce pressure on the property tax, is to honor the
CFE settlement commitment, phase it in over four years. It's going to be harder to phase
it in over the next two years because one thing that Governor Spitzer proposed this year
was making the second step a little less generous than it was supposed to be, and saying,
"We'll make it up in the third and fourth years." Now we know the third and fourth years
might be very challenging so we've got to see how that gets committed, but we have to
honor that commitment. Then once that's done, I think what the state should do is
gradually increase the share of the foundation amount, again, on a fair distribution
formula but for all districts. Maybe for a wealthy district it goes from 5 to 10, and an
average district it goes from 40 to 50 and for a poor district it goes from 80 to 90, but we
have to take over a greater share of the foundation amount. I think, ultimately, if we
could do this, it would be great if the state could pay for the full foundation amount, and
if a school district would wants to spend above the foundation amount, it could do that
out of its own resources. Those are the three long term things that we think are necessary
to reduce pressure on the property tax. The other thing it's important to realize about the
property tax is even in a single assessing jurisdiction, like Syracuse, and I don't have – I'll
give this to your staff to give out afterwards, but I had enough in my basic paper but not
of this. What you'll see – Syracuse is one assessing jurisdiction, and from the data that
you mentioned in your introductory remarks from the American Community Survey
where three New York have the highest median property taxes, I should explain what that
is. That is a survey, and the data is published for all jurisdictions in the United States
with over 65,000 population. That ends up including about 39 of the counties in New
York State. What is done, is there are three questions which have been used to say what
is the relative tax burden to take the median number that people in the sample their home
value is, the median number of what they say their income is and the median number of
what they say their home values are and to calculate the effective tax rate you were
talking about comparing median to median, but what you'll see when you look at the
underlying data and the Census Bureau makes available the microdata so you know
what's in – you can see what's in the sample, what we find is both in relation to home
values and in relation to income there's tremendous variation within a single assessing
jurisdiction, and there's only a few single assessing jurisdictions we can do this for
because there are very few school districts in New York State that are co-terminus with
political entities that are 65,000 population or more. Basically, you can't do this for
suburban districts 'cause they're all combined into big sampling areas. The differences
can be – could truth to be because of the difference in the tax rate among school districts,
but the data that – the microdata on which those averages you're talking about. If those
averages are right and the if the microdata is right, then there's something wrong with our
property tax system 'cause people with the same home values in the city of Syracuse, and
I'm sure this is true in other jurisdictions, are paying wildly different amounts of property
taxes. That shouldn't be, but the next thing will be because there isn't a one-to-one
relationship between income and property taxes. There is tremendous variation in terms
of the percentage of a families income that is necessary to cover their property tax bill.
Even if we reduce the overall pressure on the property tax, which I think is a major
objective, I think we also have to deal with the extremes and that's where property tax
relief comes in. What the STAR program has done, is it hasn't really helped people who,
in the words of Governor Pataki and Governor Spitzer, are being literally taxed out of
their homes 'cause it's giving them a few hundred dollars, but it's also giving the same
few hundred dollars to the people who don't need any relief so it's not very targeted.
What we think has to be done is a Circuit Breaker concept that we target relief, and this is
going to be politically difficult and I'm surprised that members of the legislature, both
Republican and Democratic, have introduced bills to do this and have stood up to the
press and said, "Yes, that's what we're doing." It would cut the number of beneficiaries
of the STAR – if you replace the STAR Rebate Program with a Circuit Breaker such as
some the good Circuit Breakers that have been introduced in the legislature, it would
reduce the number of beneficiaries from something like 2.5 million to one million, but it
would be giving aid to those who are truly overburdened and giving more aid to so it
could be effective. If we say that the goal of the STAR program is to stop people from
being taxed out of their homes, then it's a fraud 'cause that's not what we're delivering on,
but a Circuit Breaker program can deliver on that. I think that what has to be done -
'cause you can also create a Circuit Breaker program where everybody got $400.00. The
way you could do that is by making the threshold very low. To say, "We're going to look
at the amount of your property taxes over 2% of your income, but we're going to put a
ceiling on it and the most you're going to get is $400.00" That results in virtually every –
you could replicate STAR that way and give virtually every homeowner $400.00.
You're not recommending that?
You're not recommending that?
No, what I'm recommending is a Circuit Breaker with a relatively high threshold of
income where it's a way of targeting the relief to the people who are truly overburdened
But give us an idea of what that threshold is.
In the paper that distributed, I talk about one proposal, which is a proposal introduced by
two majority members in the Senate and Assembly with a lot of co-sponsors. Senator
Little in the Senate and Assembly woman Galef in the Assembly and on the last two
pages from the end of my paper I have tables that show the – Table 2 shows our
estimated impact of the Galef-Little bill as introduced, which has a five-year residency
requirement. Then Table 3 are our estimates of what the cost and distributional effect
would if you didn't have a residency requirement. The argument for a residency
requirement is you don't want people to get into situations where they're going to have
property tax overload as soon as they buy their homes. It would be sort of the same type
of enticement that led to the sub-prime mortgage crisis. The other thing this bill does,
which in effect, both keeps costs down but creates a sort of cost-sharing where it's not
totally a free ride over the threshold. Is it says that the state will give you a refundable
credit of 70% of the amount by which your property taxes exceed the threshold for your
You haven't made an attempt to calculate how much that bill would cost have you?
We think the bill as it is written now we think the costs would be about $1.6 billion, and
if you eliminated the residency requirement, which it's a very difficult decision, but I
think there is some sense to a residency requirement. I don't know if five years is too
long. Their original bill was 10 years, and in their recent, beginning of January revision,
they changed it to five years. But if you eliminated the residency requirement and kept
everything else the same, it's $2.5 billion. We think their bill, as it is, with the five-year
residency requirement and with the 70% cost sharing that the credit is 70% of the
overage, not 100%, what they were shooting for is to have something that costs about the
same as the Middle Class STAR Rebate Program.
Frank, do you know what the overall numbers are for STAR?
It's $5.5 billion.
Yeah, it's close to $5 billion now when you include both STAR and the STAR rebates. I
would say the basic STAR, which includes the Enhanced for seniors, but the part done as
an exemption is about $4 billion. The Middle Class STAR Rebate Check Program when
fully phased in will be about $1.6 billion. That's the one that Spitzer campaigned on and
which the legislature adopted last year and which the legislature just fully funded the
second year of even though Spitzer had suggested slowing down the phase-in.
No, I'm –
Shirley Strum Kenny
Sorry, let me just interject here, Frank, if I can for a minute. They did slow down the
phase-in and the appropriation in what was passed yesterday was $4.97 billion so I think
the 350 that they were planning to slow down, they did slow down.
They slowed down all of it or – 'cause the Governor proposed four ways of closing it
Shirley Strum Kenny
Right, he did about half of what was planned to be rolled out in the expansion, but it's
about $5 billion in total for STAR this year. All right Frank I apologize, but I need you
to try and wrap it up a little bit.
Any other major points you want to make?
No, I'll summarize. There's lots of other things we could say, but I'll give you more
submissions later on. I think the two big issues are, one, reduce the pressure on the
property tax and attack the big picture items. Make sure – yesterday I saw in the
newspaper that they had a reform of the Wicks law, and that you could have further
reforms of the Wicks law. That's not going to turn this around. The big reason for the
pressure on the property tax is the way we divide responsibility for important basic
services. Second, that property taxes have a lot to recommend them, but one thing they
don't have is a relationship to your ability to pay. I think that the reason STAR has not
muted the criticism is because it doesn't help the people who are really overburdened and
have to make their case the most loudly. I think a property tax cap would also fail. You
could have a property tax cap and you would be back here in four years or three years
facing the same problem 'cause you're not going to deal with the second problem, which
is the high property tax burdens on some people for a whole variety of reasons.
Do you think the Circuit Breaker should be related to all property taxes people pay or just
Oh, they're definitely – I should have said that, definitely all property taxes. The existing
Circuit Breaker is in New York related to all property taxes, and the Galef-Little bill is
related to all property taxes and the reason I think it has to be is 'cause if you only relate it
to school taxes, that is a suburban-area preference; it's a high income preference because
where are school taxes, the bulk of the property tax, in places that have the ability to
spend a lot of money to have very good schools 'cause they want them. There's no reason
why poor places shouldn't be covered also.
Shirley Strum Kenny
Frank, can I just ask a question about renters? Would you also support extending some
of the benefits to renters and have you done costs and estimates of that?
In the basic STAR, the one that's done as an exemption, that has a real problem for places
like Syracuse, Buffalo and Rochester 'cause that pays, in effect, money to school districts
to write down property taxes, but only on owner-occupied dwellings. In the City of
Syracuse, in looking at some of this data for this, there is only between 21,000 and
22,000 owner-occupied dwellings in a city of this size. Buffalo, Rochester, Syracuse,
even Albany now, have tremendous percentages of renters. The underlying STAR
exemption deal has so many problems with it, and I won't go into them now, but just one
thing I'll mention. We just did an analysis –
I think Professor Duncombe may be doing that. Is he? Is the Professor here? Are you
going to be talking about STAR and how much you don't like it?
A lot of people don't like STAR for different reasons. Anyway, thank you very much.
All right Frank, thanks so much – Frank, we're going to be in Albany on the 23rd. Maybe
we'll invite you and McMahon to come back again with some summary thoughts. Should
we do that or not?
Your call Mr. Chairman.
He doesn't want you [inaudible].
[inaudible] people into the schedule so, of course he's not going to say yes.
All right, Professor Duncombe we're already behind schedule.
Good afternoon, I appreciate the opportunity this afternoon talk a little bit about some of
my research and my colleague, John Yinger, which may be relevant to some your
deliberations. I'm going to focus on the really the revenue side and principally property
taxes. I don't need to tell you, obviously, that a school finance system involves a lot of
components. The revenue side of property taxes, property taxes of administration, relief,
what's being considered by your Commission limitations, state aid. I would argue
education accountability standards are a key part of a school finance system. Then I
think the subject of the number of people we're going to talk about and those are the cost
drivers, which I'm not going to focus on today.
I think the key point, and it's one that I think is fairly straight forward, and that is change
in one part of the system can ripple through and affect other parts of the system and you
really need in making any change to the property tax to consider the broader implications
of that change. Again, as been brought up before, you have a number of different choices
in providing property tax relief. STAR, which I'll talk more about. Circuit Breakers,
which I'll talk briefly about, but Frank talked about in more depth. Then we would argue
that state aid itself – evidence from our own research that is substantial portion of state
aid is used in property tax relief, and so then increasing state aid actually is form of
property tax relief. How these things are designed have real important implications for
the school finance system. I want to start with STAR I guess this kind of says my views
on STAR. It's a good example of a poorly designed property tax relief measure. I think
it's actually been one of the principle reasons, as I'll emphasize why property taxes have
gone up so rapidly over the last five to ten years. First, it undermines the Equalizing Aid
programs so it literally undermines what we passed last year. Two, it's unfair across
taxpayers even though STAR was really built as a way of helping taxpayers. Three, it
has serious unintended consequences. So let me start by just talking a little about – and
again, I don't have time to go into this in depth, and I'm sure you know this. I say
distributes over $3 billion – I should say over $5 billion to school districts but in a way
that really undermines the reform. This is really due to the sales price differential factor,
which provides a much higher exemption downstate. The result of that is that, in fact, if
you look at the blue bars there, that's STAR revenue per pupil, the red bars are per pupil
operating aid, this is 2005. This doesn't include the latest foundation formulas. You can
see these things are going in pretty much the opposite direction. STAR is undermining
what you're trying to do with your foundation formula. The question is that – is there a
strong justification for that type of an exemption? Second, it's unfair across taxpayers
because, one, it ignores renters. In cities like Syracuse where I reside, and as Frank has
indicated, they represent a high share of the homeowners. Two, the sales price
differential factor really leads to a much higher tax savings for counties with high-income
households - a higher share of high-income households, which is not normally how we
would think of setting up a property tax relief measure. Now it's true, within any school
district there's substantial benefits to lower-income homeowners than higher-income
homeowners, but across the districts it creates inequities across taxpayers. Three, and I
think this is very important for the task of the Commission, it's got unintended
consequences. STAR, very simply, is a substantial cut in the price of property taxes to
local voters. Take a city like – or county – Onondaga County, roughly, let's say, a
$100,000.00, medium home, $30,000.00 exemption we're looking at a 30% cut. For low-
income seniors, it's substantial more than that. Not surprising, we've seen very rapid
property tax increases during the same period of time. Now there's a lot of cost drivers
that lie behind this as well. Our research has – we've found that property taxes related to
increases related to STAR has been an increase of over 25%, which is actually removed
about 40% of the STAR tax savings. And that –
It's removed what percentage of the STAR savings?
Forty percent in our – again, this is for a period of time that we were looking at, which is
prior to the reforms of last year. We haven't estimated those. I think equally important
for economic development concerns upstate and in many parts of the state this has
significantly increased the tax burden on business, which clearly can have economic
development implications. Here's an example – the vertical bar is the percent change and
the full-value property tax rate from 2005, the horizontal bar is the STAR revenue as a
percent of property values. There's a clear, positive relationship. It's not perfect, but
those places that have a bigger subsidy have bigger tax increases. Then again, I – this is
going to be hard to see and you'll get the details, but this is sort of a breakdown of both
the percent increase in property tax that we attribute to STAR and prior to the reforms of
the STAR middle class tax relief of last year and the share of STAR relief that has been
offset. I think the key point here is that there's big variations across regions of the state.
This is clearly having big impacts across the state. A couple of simple points we want to
make. One, there are ways to turn off the incentives of STAR. One way to do it is to just
to put a maximum cap on state reimbursement. Maybe you take the state average,
median whatever it may be. I just picked 2% as an example. Districts get reimbursed
from the state up to a 2% tax rate. Above that they have to absorb the cost of STAR
themselves. So literally, you remove it for those districts any incentive created by STAR
to increase, I won't say any incentive, but you remove a lot of the incentive that STAR
creates to raise taxes. There are other versions of this proposal, but the point here is that
there are ways to keep STAR and turn off the price incentives that STAR creates for
raising tax rates. Second, and, obviously, this is politically difficult, but sales price
differential factor creates a lot of the inequities that are built into STAR. We know of no
other state that provides higher tax exemptions to voters in high-wealth areas. This is a
very unusual provision and we think it creates a lot of negative consequences. Let me
just briefly talk about a couple of other things and then I will leave. One is Circuit
Breakers, we concur with Frank Mauro that Circuit Breakers have an important role to
play in property tax relief. We feel they should be targeted to low-income taxpayers, and
that they clearly need to be targeted to renters. This is the way you're going to help
renters. In Syracuse, they represent the bulk of your homeowners. However, we would
argue that you want to be cautious about extending Circuit Breakers to middle-income
taxpayers because you can actually create incentives like STAR to raise property taxes so
you need to be cautious here. It's a trade off. Clearly, there's equity benefits to extending
it farther up the distribution, but there may be effects on property tax rate growth for
extending it up the distribution. Let me just talk a little bit about state aid, and again, it's
dependent a bit on which state aid programs we've looked at, but we found substantial
amounts of state aid, particularly in the city of Syracuse, but in other places that has
actually been used for property tax relief. In some cases, we found, actually, you got
more property tax relief from state aid than you did from STAR. It is not something that
should be discounted as a part of the package when you're considering property tax relief
measures, and that's expanding the foundation formula. Then finally, and I obviously
can't do justice to this topic in a short period of time, let me just talk a little bit about tax
limitations. I think it is fair to say that sometimes, and probably a significant portion of
the time, tax limitations have reduced property taxes. As you've documented in your own
work, Massachusetts is a good example of that. However, I would caution by saying that
you're imposing a restriction – an artificial restriction on what local voters can do, and
this has significant implications. One, they get creative about revenue sources.
California is the master of creative revenue. One, they've got is called the Partial tax,
which is not technically a property tax where you tax a flat amount per parcel of land.
An incredibly regressive tax, about as bad as you get, but it's a way of avoiding the
property tax limitation. Two, you freeze in place any inequities across local
governments, particularly in education. For example a 2.5% property tax-rate cap for full
value in New York would primarily constrain school districts is low student performance
category. You got to be careful if your goal is to also increase the proportion of students
reaching proficiency, a cap can undermine that unless it's accompanied with significant
increases in state aid. Then three, one of the implications of Massachusetts' Prop. 2-1/2,
which certainly was not anticipated, is that voters in constrained municipalities have
consistently demanded, in some sense, more taxes. There have been a lot of overrides.
Two, there's evidence that, in fact, in those municipalities there's been relative out-
migration of population and decreases in property values because voters couldn't get,
particularly the school spending that they wanted. Again, it's not necessarily a case that
voters don't know what they're getting once you give them the right price signals. You
turn off the price signals from STAR I think that the justification for property tax
limitations is much weaker. This is just an illustration of property tax – full property tax
rate on the vertical axis versus student performance. Again, to just illustrate the point
that you're going to be hurting some of the lowest performing districts. So let me just
wrap up just with a couple of our recommendations. One, eliminate the sales price
differential factor. I just do not see the justification for this and it creates a lot of
inequities. Two, impose a cap or some other constraint on the maximum tax rate for state
reimbursement for STAR. This way you turn off the price incentives. Three, we strongly
argue that we should expand the Circuit Breaker, but focusing it on low-income
homeowners and renters. Three, we would argue, and agree with Frank, that there was a
significant improvement in the aid formula last year. This should continue to be phased
in and the state does need to step up and take a larger share of the financing of education
in New York as less than average financing of its education through the state. Then five,
we would argue that there's other things you should try before property tax limitations
that we think will deal with the problems, but if not you should allow significant
overrides. Give districts a chance to raise taxes if they really want to raise them. Thank
Professor thank you very much. Let me just ask you two questions. I'm not making any
judgments by asking this question. Property taxes are obviously unaffordable for many
people here in our state, which is the reason our Commission came into existence. It's
why you and others have been advocating for a Circuit Breaker. Do you think that rents
in Onondaga are unaffordable?
Well again, everything is relative to the income of the Onondaga County itself. And so,
rents here are obviously substantially less than on Long Island, but then incomes have
substantially less as well.
So the benefits for the renters would be based upon their incomes as well?
Well Circuit Breakers certainly have been based on incomes, I mean, that's been the focus
So how would you do that for a renter?
Well it's been done different ways in different places. Typically there's some estimate of
what share of a person's income is spent rent. It's varied across states that have done this,
but typically it's been based on some percent of income that is used as an estimate of that
they're paying in rent. The difficulty, of course, is that rents are paid and the property
taxes associated with rental property is paid by the landlords. Trying to determine what
share of rent is paid by renters is a pretty touch thing to figure out and it's going to
depend a lot on the local housing market and how tight the market is. Most states don't
try to do that. They instead say something like 20%, 30%. I don't – I can't tell you off
the top of my head but a flat share of an income is assumed to be rent.
Thank you. Can we find out what is being proposed regarding renters? How that would
And, Frank, I'm going to ask you if you can, and staff could do it and maybe you could
talk to each other. You'd spoke earlier about the 2.5 million versus the 1 million people
under the two different programs. I'd like to know who the type of people those 1.5
million that will be excluded are.
Right, [inaudible] owners. What we've done is for renters as well.
We'd like to get that.
Yeah, in New York – when New York does these Circuit Breakers for renters, it is a
percentage of your rent that is assumed to be property taxes. We had [inaudible] goes up,
the percentage of your rent considered to be property taxes goes down.
All right, thank you very much. Professor thank – Bob, did you want to say something?
[inaudible] question Bill and Frank. Based on what we know of other tax credits, is it
reasonable to assume that if all of a sudden today we enacted a Circuit Breaker there
would be some significant percentage of the people we're targeting who would never get
it? Twenty-five percent, 30%, possibly more because they would never apply for it?
Well, certainly there is evidence of non-filers, Michigan, which an earlier stage had a
sizeable Circuit Breaker. I'm trying to remember what the numbers are of the top of my
head, but it was a substantial number. So I clearly one of the things about a Circuit
Breaker you've got to do is you've got to make a significant outreach effort to get folks to
file their taxes. There is a concern about that, yes.
Shirley Strum Kenny
Well and if I could just ask a question about that. I know with the STAR program when
they were initially implementing it when people had to apply, there was a low take up,
but, certainly, we have programs now running through STAR that people do have to
apply for, correct? And they've managed to get those percentages up, I think, in terms of
the people applying.
Yes, I mean, of course, the STAR is focused on homeowners. The issue with renters is if
you have a substantial number of renters that are low income, but wouldn't normally file
their taxes. That's the group that we're worried about. This is a problem with the –
Earned income tax. Earned Income tax credit at the federal level. This is something that
would need to be worked on. I don't think it's an insurmountable problem, but there is
going to be a portion of the, particularly, lowest income who may not file.
All right, thank you very much professor. Okay, County Executive Joanne Mahoney
supposed to be next in our speaking line, but she's not here yet. I think she's coming at
3:00, I was told. As soon as she comes in we're going to give her the podium. Whoever's
speaking at that time, please be conscious of that. Next was going to be Mayor Driscoll
but, of course, he's on vacation and we wanted John Gamage from the City of Syracuse is
here on behalf of Mayor Driscoll to come forward at this time. Commissioner of
Yes, thank you very much Mr. Chairman, yes, as you said, the mayor's away on vacation.
He wanted to make –
The assessor is always a very popular position.
We're the frontlines of the infantry. Welcome, we're obviously very pleased that you
came here and Syracuse and gave people in this area of the state this opportunity. We
were really happy to see Mr. Pirro appointed to your panel. He's a city taxpayer and
spent his career carefully spending taxpayer dollars as well as anyone, and more
importantly I don't think he's ever complained about his assessment.
Well now that he's retired, he can't.
I know you've been to Rochester and to Buffalo both, and the Mayor just wanted me to
point out as an upstate city, we're in kind of a similar situation. We have flat, basically
stagnant, tax base, assessment base for a variety of reasons I can talk a little bit about.
We have a structural budget gap. We have constitutional tax margin of $20 million, and I
know someone was just talking about tax caps and so on, I mean, the city, and we have
fiscally dependent school district, but the two of us have a $20 million tax market and
that's what we have right now. We have a tax cap in effect, and it has been in effect for a
Are you at your limitation already?
No, no we're $20 million from it.
Oh, $20 million from it.
Yes, we're within $20 million.
And how much is it in total so far?
Right now our tax levy for the fiscal year we're in was $89 million
So $109 million is what you have available?
Shirley Strum Kenny
And that's for the school district as well? That's combined?
Yes it is. The assessment base we faced the similar problems to the upstate cities. We
have a large number of exempt institutions here for a variety of reasons. We are the
center for government, and all those thing are great and they're wonderful and provide all
the services everyone needs, but they don't pay property taxes and that spreads the -
obviously spreads the tax levy to the people that do. We're the center for our neediest
citizens, obviously, and that creates a heavy need for services from all sorts of city
agencies, from the schools, obviously, to police, fire, everyone else and we have to spend
a lot of tax dollars providing for those people. Increasing the tax base is difficult in terms
of commercial development you're always dealing with ground field issues. We're an
old, urban area. Every time you want to develop something, you have to deal with the
expense of evaluation and often removal of hazardous substances in the buildings or the
land or whatever. Typically have to demolish buildings. All those things add to the cost
of development and hinder our ability to attract investment in commercial property. I
was going to say some things about STAR, but they've, Professor Duncombe, obviously,
is an expert on that and has covered pretty much anything that that I had in mind there.
However, I would like to just give you an anecdotal thing about STAR because when I
hear some of he suggestions that are floated around as an assessor, as the infantry so to
speak on this whole property tax thing, it makes my – it gives me chills. Nobody would
rather see lower property taxes than assessors. It would take a lot of pressure off of us
and our staffs to see those lowered, and we just spread out as best we can. The STAR
program is a good example of how the administration of it from our end is a good
example of how these things can go bad or good ideas can get turned into bad ideas or
difficult to implement. When the STAR program started, the first year we were given -
municipalities were given aid to administer it aside from the STAR reimbursement we
were given funds based on our number parcels and exemptions and so on to handle
STAR, and the first year we received $128,000. Every year since 1998, it has gone down
to the point where now this year our aid was $25,000. Well in the interim, the STAR
program got extremely difficult and convoluted to administer. For example, the rebate
program went into effect. We already had Assessment clerks reviewing tax returns, a lot
of tax returns for people. Going through income tax returns daily basis and so on and so
forth. Then we went with the Rebate program. That put a whole other cycle – we're on a
different assessment cycle than the towns around here – put us into a whole other several
more months a year of handling STAR inquiries, endless phone calls, helping people out
on a well-intentioned program, but we weren't meant to have people all day long
reviewing income tax returns and things of that nature. And than, for example, on the
Rebate program the first year you didn't have to apply and senior citizens did have to
apply. The second year you reversed it. Not you. The statutes and so on reversed it. If
you talk about confusion, you're dealing with elderly people on these exemptions so, I
guess, my – the bottom line for me on that is try to keep it simple whatever you do.
When I hear the Circuit Breaker stuff and residency for five years and all that stuff, I
smell a lot of assessor involvement in the trenches on these things, verifying information
and trying to handle it for you. One quick example, I know one of your directives was to
look at unfunded mandates, and this is one I've had to deal with a lot at my level recently
and I thought I would just bring it up. A couple of years ago –
I'm going to have to ask you to wrap it up soon John.
Okay, that's all right. I was just going to talk about a statute that specifies how we have
to assess as assessors housing – low-income housing projects if they have 20% of their
units rented to people with income restrictions and so on and I can submit something on
that. It's been having a big impact on the urban areas where we have a lot of that type of
housing, but that can wait till later.
I just want to make the point several things you refer to were state mandates. Have you
conveyed to our state delegation what they're doing down there in Albany that is causing
problems? We've heard across this state of intentions of state legislation that, for the
most part, aren't well thought out and end up costing everybody a lot of time and money.
I think you ought to be making that point very strongly to the people that are doing the
Thank you, Nick.
I'm going to ask everyone to please give the assessor a round of applause because
assessors never get applauded. Okay now listen, we're very behind schedule here. I'm
going to ask people to – my Executive Director wants to limit it to three minutes, but for
the elected officials and appointed officials we're going to let you go for four minutes, but
we need you to try and move it a little bit faster. I apologize for that, but we're not going
to get a chance to get to everybody unless we try and go a little bit faster, okay? So Bill
Meyer, the Chairmen of Onondaga County Legislature.
Thank you, Mr. Chairman. It's an honor to follow Mr. Gamage. I served with him in an
Army reserve unit so I'm used to following him. My name is Bill Meyer. I'm the
chairmen of the Onondaga County Legislature, and welcome to Onondaga County. I had
the pleasure of working with one of your Commission members, Nick Pirro, for many
years, and I'm sure he has done much to bring an appreciation to the upstate perspective.
The Commission's work comes at a very critical time and point. Perhaps now more than
any time in my career, the public's view of property taxes has gone beyond the normal
aggravation to real anxiety. Anxiety about whether there's enough money to pay this
year's property tax, about property taxes that go up when prices of homes are going up,
but don't seem to go down when they're falling. Well maybe having to sell the family
farm and the family home to get out from underneath property tax bills that keep going
up every year with no end in sight. With that anxiety, often comes anger. Anger with
local government, local school districts that don't appear to muster the discipline, the
tenacity to tighten their belts like everybody else has to because government and
educational finance has become so complex; there is a tendency to respond to the
situation with a simple solution like a cap on property taxes. I understand that, and
perhaps maybe more than once, I've come to the same conclusion. But here's the
problem, in every local government and school district the property tax is the revenue of
last resort. Expenses minus all our revenues equals the property tax. For better or worse,
New York controls both parts of that simple equation. It mandates many services and
controls the flow of many of our revenues. Therefore, it also extorts major control over
the property tax levy. In any given year, a local government or school district can
demonstrate outstanding fiscal discipline, but find itself with a double-digit tax increase.
Let's use this year as an example. After declaring property tax relief as a major priority,
the former Governor released a budget that shifted $6 million of costs from the state to
our county budget. With that withdraw of state aid an additional cost is gained just plain,
ordinary growth of mandated services like Medicaid. The proposed state budget would
have added $10 million to the county budget and you know where the money comes
from. That $10 million simply gets shifted from the state to the county – the property
tax. Without any increase in the level or quality of service we provide to our residents
and businesses, a $10 million hit to our budget would have raised taxes nearly 6%. When
nine of the ten highest property tax communities are in a single state, you have to accept
the fact that maybe the state is part of the problem. I have a few suggestions. First
instead of investing more dollars in Circuit Breaker programs such as STAR, as you've
heard many times today, that may or may not be working, put those dollars into Medicaid
take over. As the County Executive will tell you later today, if the state simply paid its
share of Medicaid, we would cut our property tax rate by over 50% saving the average
homeowner over $450. Unlike a program such as STAR, this $92 million savings would
be passed on to local businesses who are also buckling under the pressure of property
taxes, and in too many cases moving out of New York with their jobs. Clearly the
takeover of Medicaid would be the best way to guarantee that state investment of
property tax relief will result in real savings to every tax payer. Second, enact legislation
prohibiting unfunded mandates. Never again would we face a situation as we did earlier
this year when the Governor proposed that counties pay more of the states welfare costs
than the state itself. The days of when the state could balance its budget on the backs
counties and other local governments and schools and then point the finger at higher
taxes must end. Finally, the state maintains data that could be very useful to decision
makers and, frankly, the voters, but it has to be done in a very clear and concise manner.
I think the state could play a very major role in transforming a budget vote from an
emotional decision, to informed decision. My suggestion is to post benchmark
information that would shed light on some basic facts about local government and local
school districts. Things like average teacher salaries, student/teacher ratios,
administrator/teacher ratios, police officers per capita, employee health costs, tax rates,
budget growth and so forth. Comparing the subject government or school district to
another comparable organization in similar areas. I truly believe that this knowledge is
very valuable and very powerful. If we provide taxpayers and decision makers with easy
access to quality, understandable information, we empower them to make better, more
informed decisions, decisions about their budgets. The benchmarks will provide a
needed sense of perspective and, perhaps, drive initiatives and new technology to focus
on governments and schools that seem to be getting the best value for their dollar. I
suggest this could be an important first step in reigning in the costs of government.
Again, thank you very much for your time and, again, welcome to Onondaga County.
Bill, thank you very much for you testimony and your service to the National Guard also.
I want to – you talk about the mandates that counties face. Do you agree that school
boards also face very serious mandates as well, that they've got to deal with on a regular
Thank you very much, Bill.
Mr. Chairman. Okay, Larry Hart from the Central New York Property Tax Alliance.
How did you get in here Larry? Larry, go ahead.
I have 15 copies of this if you want them.
Okay, you can give them to us after your statement if you want.
I am here as a representative of the Central New York Property Tax Reform Alliance.
We're an organized group of homeowners who have determined to challenge the current
use of the property tax to fund schools and local governments. Upstate New Yorkers pay
some of the highest property taxes on assessed value in the nation, three times the
national median. There's been an astonishing increase in the last five years, probably
higher than the statewide average of 42%. This is a major factor in our economy and
population loss in the area. We are interested in a total revision of this archaic, severely
flawed system of taxation, but our primary concern at the present time is to provide relief
to the growing number of low and middle-income homeowners who are paying a
disproportionate percentage of their income in property taxes. As taxes continue to
increase, many of us have had and will have to sell our homes. A large number will
choose to move to a state that has reasonable taxes. As personal example, our property
taxes have increased by 53% in the last five years.
How much are your property taxes?
In '06, we paid 14.3% of our adjusted gross income in property taxes. This is on a
property we purchased in 1976 for $80,000 that is currently assessed at $335,000. In '06
we paid considerably more in property tax than we did in federal income tax. This brings
up my most important point. The assessed value of your home has no correlation to your
ability to pay taxes. The only fair basis for taxes is your income. While our property
taxes have increased by 53%, our income has increased by 5.3%. I've seen newspaper
article and I heard a state senator refer to your Commission as the Tax Cap Commission.
I agree that in many cases school spending needs to be controlled, but a 4% cap on
budgets would not be a solution for homeowners paying 10 to 20% of their income in
property taxes. For example, if you're currently paying $10,000 dollars a year in school
taxes with a 4% cap, in five years, you'll be paying over $12,000. That is if your
assessment does not increase or your equalization rate does not decrease. You could be
paying much more than a 20% increase in five years. A cap is on the budget, but it's not
or your taxes. There has to be a way to reduce the burden on low and middle-income
homeowners and to protect them against constantly increasing property taxes. The
Central New York Property Tax Reform Alliance has determined that a Circuit Breaker is
the best option available at this time. We are supporting the Galef-Little Circuit Breaker
bill as the replacement for the flawed STAR rebate program. This bill would target the
homeowners who are in trouble and limit their property taxes to a reasonable percentage
of their income. The bill would include all of your [inaudible] taxes. Those are any taxes
that are based on the assessed value of your properties - school, town, highway, fire, et
cetera. Your tax liability up to $90,000 in income would be limited to 6% of your
income plus 30% of the difference between that figure and your total [inaudible] taxes.
So if $90,000 to $150,000 it'd be 7% plus 30% of the difference, and from $150,000 to
$250,000 it would be 8% plus 30% of difference. Since the homeowners would pay 30%
of the difference between a set percentage of their income and the rest of the total tax bill,
they would remain concerned about fiscal responsibility and budget increases. I've seen
information that indicates the Galef-Little circuit breaker bill would be comparable in
cost to the STAR Rebate program that it should replace. Eliminating the STAR Rebates
may not be politically popular, but since they are not based on the amount of your school
taxes they are ineffective in providing any real relief to overtaxed homeowners.
Taxpayers in a town in the same income bracket and school district all get the same
rebate. So if your taxes are $1,000.00 and your rebate is $500.00, you get 50% back. If
your taxes are $10,000 with the same rebate, you get 5% back. The STAR Rebates
would make sense only if they were based on your income and a percentage of your
taxes. A Circuit Breaker would benefit a large number of taxpayers, many of which are
older and purchased their homes long ago. Over their years their homes have increased
several in assessed value and their taxes have constantly increased by large amounts
while their incomes have remained relatively stable. We are confronted with a flawed
system of taxation that is based on constantly increasing budgets, increasing assessments
and an equalization rate that is difficult to understand and unfair in its application. If you
give me another half an hour, I'll try to explain it. We are told that if you can't afford it,
you should sell your home and make a profit, but most of us want to remain in our homes
among our neighbors and in our communities. There has to be a solution to this dilemma.
We thank you very much for undertaking this enormous, but very important task. We
hope that the outcomes will be beneficial for all of the citizens of New York State.
Larry, I want to thank you very much for testimony. It was very helpful. Now are you
affiliated with – are you guys together? Do you guys work together with Whiteley?
I know Whiteley, yes.
Okay. You know what would be helpful is if you can get me about 10 or 15 stories of
different people of different personal situations that people encounter. It would be very
helpful as we try an illustrate the problems that we encounter.
To other people, okay? So why don't you work together on that would helpful to us.
Okay, Mike Masse, I think it is or Masse. Masse, Mike Masse whose a member of the
Fayetteville-Manlius school board and also the Treasurer of the New York State School
Malius? Oh, Manlius. What did I say?
I sit here, quite honestly, thank you for hearing me Mr. Chairman and Commission, and
how do I boil 15 years of volunteer service to my local school into four or five minutes. I
will do my best, but I've given a lot of thought to this topic. I trust, like school board
members, you know how to read so I won't go through the whole document.
And just so you know, Mike, we make a point of getting a lot of school board members
and school board officials and members of the School Boards Association to testify to
each of our hearings.
I understand that, thank you very much and I appreciate that. I'm a graduate of the public
schools of New York State. By show of hands, how many people here went to public
schools in New York State? Thank god I'm among friends. We have a tremendous
school system in this state. As I read the Executive Order without rereading the
whereases, it sounds as though local school board members are being asked to apologize
for the ails of a state. I have spent 15 years trying to improve the quality of my local
school, and a lot of what comes our way is the result of actions outside our system. With
all due respect, I'm an individual who could live anywhere in the country. I run a
nationally focused business, and I choose to live in central New York. My wife and I
moved back here specifically for the schools. Recently Sir Michael Barber, who was the
head of education under Tony Blair's system in Britain, came to the United States and
along with Commissioner Richard Mills was asked, "Where do you see world-class
education in the United States?" The immediate answer was Fayetteville-Manlius, but
Fayetteville-Manlius is not alone. New York State is home to some of the finest school
districts in the country. Our collective challenge is how do we make it work for all
3,000,000 students within the state. Sadly, we all know it doesn't. We have a system that
serves wealthy communities well, and too often under serves poor districts. If we truly
believe in a Horatio Alger, pull-yourself-up-by-the-bootstraps meritocracy, public
schools are the engine that gets everybody to the same starting gate and I believe we are
failing. Like many school districts, our resources are strained. Our district relies on our
taxpayers for 75% of our revenues, and they are reaching a breaking point. Let me be
perfectly clear, a lot of the debate is around the spending side. Ladies and gentlemen,
public schools have a funding challenge. Virtually all elected officials in this state talk of
their strong support of public education. Recently however, one of the legislators so
anxious to have their picture taken with our students we were visited by then-Governor
Spitzer last September, and yet every local politician comes for the photo-op to applaud
us relative to our achievement in sciences. We get a mailer from one of these individuals
already in support of the tax debt. When asked why, the answer was, "It's popular." Of
course it's popular. Two interesting quotes to an article on this Commission when you
visited Binghamton from the Binghamton Press Bulletin, "A statewide poll from the
Sienna College found 72% of voters favored mandatory limits on tax increases. In
January, voters in Florida, at a margin of 64 to 36%, approved a constitutional
amendment that doubles the existing property tax exemption for homeowners." A bit
more information in those numbers, the above percentages virtually mirrored the
demographics of a typically school district where over two-thirds of our residents do not
have children in the school. This is Long Island, this is upstate, this is Ohio, this is
Massachusetts. So when you talk about a system that will allow an over-ride, we're
working against an over-ride all the time. Fayetteville-Manlius recently had a
referendum defeated where we had 4,500 no votes. Now some will say that the project
was controversial, and this is a community that overwhelmingly supports education, but
typically we have a total vote of 2,000 voters. A footnote back to Florida. Florida is now
assessing – Fire districts in Florida are now assessing residential fees to local home
owners to makeup for local property tax. The Executive Order asks the experience of
other states in implementing caps. I'm a graduate of the Maxwell School where I studied
under Professor Bill Duncombe and John Yinger, and Professor, I think you missed a
slight point on the Massachusetts challenge. In Massachusetts, what they did with the
2.5% is they capped the effective rate, not the [inaudible]. So what happened in
Massachusetts during the technology boom, property values soared so in essence the
schools continued to have the same levels of revenue as they did. If you take a look at
school spending in Massachusetts and compare it to New York, it's virtually identical.
Almost identical at the student level, teacher/student ratio, aid to local schools. Almost
identical between the two states so I wonder if people think that if you do a
Massachusetts solution you'll in fact see a tremendous rise in property values. As to state
aid in that state, I don't cite this in here. State aid to local school districts in
Massachusetts was dramatically increased to bridge those [inaudible]. As for those who
argue that local communities can exceed the cap with a supermajority, I cite back the
numbers on the percentage of parents versus general voters a moment ago, but as I think
all would agree, and I think as Dr. Duncombe and Frank Mauro described, you end up
with a system that actually favors wealthy districts. I'm from what's considered a wealthy
district in central New York. We rarely average wealth across New York State. My
friends in the audience will tell you that I argue for all students. We have to have a
system that supports the students of the City of Syracuse, and the assessor was correct, in
essence, this city operates its school system under a tax cap. It operates now under a tax
cap. Just to touch on the budget that was delivered this morning, it's generally good news
for public schools. It's generally good news for public schools, but at the same time the
City of Syracuse continues to struggle and is looking at reducing staff. Some how we've
found a way to deliver $100 million more in extra aid to wealthy school districts in Long
Island. I just don't get it; I'm missing something. The other thing the Executive Order
and I just touch on this point last and then let you read the rest of the material. You seek
to understand the extent of public involvement in the approval of school budget and local
government budgets or the transparency. Let's have a conversation about transparency.
This week work continued behind closed doors in Albany on New York State's budget.
Meanwhile, local school districts, year in and year out, prepare our budgets in open
meetings that, I will tell you, are well attended and put their budgets for approval to local
communities. No other layer of government has a more intimate or transparent
relationship with its local voters.
Michael, I'm going to have to ask you to try and summarize, if you can.
I'm summarizing right now, and chairman, I will tell you that when I asked my
community for additional property revenue, I'm asking my neighbors I see every day.
The last thing I'd like to cite is although you don't talk about federal mandates if you take
a look at federal spending, IDEA and Title I are under funded in New York State to the
tune of $3 billion over the last two cycles. That could take $20 million off the property
tax base in the City of Syracuse alone if you distributed that equal – I heard someone say
one time that local spending, it's almost as though Pharaoh said to Moses, "When you
make the bricks, bring your own straw." When I hear of a cap, I have this sense that
they're not even going to let us bring own straw, but we're going to have to prepare and
make the same bricks. I think, per what Frank said, a Circuit Breaker might be a better
approach. You can't cap a system that's already in turmoil. I have employees that work
for me on Long Island. Their property wealth is a lot higher than mine. They pay half
the taxes I do so this notion of a cap really creates – leaves in an existing inequity. In the
document you'll see that I chaired a statewide school board committee on this issue. Bob
Ward was one of our speakers, and we really struggled with it. I will tell you, local
school board members from around the state who all had a different stake in the problem
did something amazing. They shook off their regional differences and they came to some
very solid conclusions, and it's included in that document. This problem is solvable. A
property tax cap is not the solution. Thank you for your time, and I wish you well in your
Thank you, Mike. Okay, at this time I'd like to ask the executive director of the
Statewide School Finance Consortium and the Executive Director of the Central New
York School Boards Association. I think they want to come together. Is that right?
I [inaudible], and this is my colleague Rick Timbs. I'm Executive Director of the Central
New York School Boards Association, and I'd like to thank you very much, Chairman
You're Larry right?
I want to thank –
And is Rick going to testify also?
No, we needed some time.
You're going to join up together?
I do want to thank you very much for your service. This is a very complex and
contentious group of issues that you're dealing with and I think it's an important dialog
that has to go forward. Just in way of explanation, I'm the Executive Director of a
regional school boards association here in central New York.
We have about 50 school districts – school boards, but 15 years ago we created another
entity called the Mid-State School Finance Consortium. The name was changed a few
years ago to Statewide School Finance Consortium. We have about 300 school districts
that are part of that consortium. Actually if you go to the next. This is from a press kit
that we did back in 1995, two years after we were formed as the consortium. And if
you'd go to the next one please. Basically, we ask the state legislature – we agreed that
property taxes were killing us, and we ask the state legislature to really address a couple
of things. One, bring fairness to school taxes, and second, to equalize the burden for
taxpayers who are similar services, which I'll elaborate on here. The reality is there's
very little correlation between school spending and school taxes. School aid distribution
has been a problem for decades, that's irrefutable, but the real issue that we are
confronting today goes back to 20 years ago in 1988 when Ralph Marino succeeded
Warren Anderson as the Senate majority leader. That's when this infamous Shares
agreement on school aid was instituted, which one of my colleagues has referred to as the
balkanization of the school aid formula. Basically, what's happened with the Shares
agreement is that we have this school aid became driven by the these gross regional
appropriations where New York City would get 38.86%, Long Island would get 13% and
so forth. It's fundamentally different and less equitable than a distribution based on
property and income wealth and student needs because within these region, as has been
alluded to; there are wide disparities, distortions if you will, where very needy districts
get less aid than they require, while wealthy districts get aid that, we would argue, they
should not. So, let me just give you quick overview of where the money went last year
and, frankly, the budget that was just adopted yesterday will provide a very similar
distribution. We did a comparison between a proposal that we put forth some years ago,
and last years enacted budgets and in the districts – the 100 districts that that got the
largest per pupil aid increase in the enacted budget were significantly wealthier than the
average district in New York State. The CWR there refers to the combined wealth ratio.
That's a number that is assigned to each school district, each year. It's made up equally of
your income wealth and property wealth so an average wealth district would have a CWR
of 1.0. The districts that did the best under the enacted budget last were nearly four-times
wealthier than average school district in New York State. They're FRIPL number, which
is free and reduced lunch, an indication of poverty, was about 13%. The local tax effort
was about $12.00 per thousand. Just as a comparison, the districts that our plan would
have favored would have had half the wealth of an average district. Over 40% the kids
on free and reduced lunch and local tax effort on average of $18.00 per thousand. I just
want to illustrate for you the capacity issue here that really is at the root of this. Hannibal
is a poor school district in Oswego County, just north of here. They have one-third the
wealth of an average school district. They have about 1,600 pupils and the total value of
the property in the school district is just over $200 million so they have about $125,000
of taxable property per pupil and over 60% students are at risk. Another district in the
vicinity, here down in Tompkins County, Groten similar over 50% of their kids at risk,
$180,000. Here's Syosset on Long Island. They have $8 billion in taxable property,
which translates into over $1 million in full value per pupil, and they've got 1.7% of their
students at risk. Another similar example. Another wealthier district downstate that's got
over a million dollars in property wealth per pupil, slightly higher of at risk pupils. The
reality is that at-risk kids cost a lot more to educate. You can scroll through. They're just
more examples that I won't belabor similar. The fact is that if you have a high number of
kids at risk, you need more aid to educate them. I just want to give you an example of
Syracuse City, again, you can see they have over 80% of their students at risk and only
$159,000 in full value behind each of taxable value property per pupil. I just want to give
you a quick illustration of what this really means between a wealthy and poor district.
This an actual district in the area here. They're providing what is mandated by the state.
They have – their elementary schools provide mandated programs, middle schools as
well, they provide special ed services and they have some accelerated course that are
required in English and so forth. Then the high school does offer some electives,
including some Advanced Placement courses so forth. I just want to show you here now
what we happen. The next district is a wealthier school district. Actually, it's not
incredibly wealthy. They have twice the wealth of an average school district. You can
see children there begin the study of world languages in kindergarten. They get obvious
– they have Russian in kindergarten, Mandarin Chinese in first grade, so on and so forth.
You can move ahead here. They are - 98% of the students go on to college. Keep going
if you would. Just shows you those are all the AP courses available and so on and so
forth. Go ahead to the next line if you would. Yep, one more. Point is that in some
cases school districts – school taxes are higher because of choices communities make. In
this comparison, the wealthier district actually got a larger state aid increase last year than
the low wealth district. Would anybody care to venture a guess as to which district has
the higher tax rate? Yeah, well it would be the poorer one the taxes in the poorer school
district are 25% higher than they are in the wealthier school district. I guess maybe we
should tell those folks that they need to spend less money in that poorer school district.
This is not eye test, actually, I just wanted you to see the backup. Go to the next slide, if
you would. This was referred to earlier by Frank Mauro and perhaps others. I just
wanted to recognize the point that you've made, Chairman Suozzi, that if you see there in
the first column the median property taxes on a home in Nassau County are close
$8,000.00 a year, while here in Onondaga County they're less than three, which is a pretty
substantial difference. The median home value, however, in Nassau County is over
$500,000.00. Whereas, here it's $115,000.00. A difference of almost $400,000.00. If
you live in Nassau county and you're in that median, your taxes represent about 1.5% of
the home value. whereas it's 2.5% here in Onondaga County. The median income on
Nassau County is $95,000.00, while it's $61,000.00 here. In that example, you're paying
a higher percentage of your income in taxes on Nassau County than you are here, but I
guess I would suggest to you that they're probably a lot of people here that would be
willing to trade their $115,000.00 house for a $500,000.00 house, and a $61,000.00 salary
for a $95,000.00 in return for paying that $7,700.00 tax bill. Finally, I just want to show
you what the impact would be – that may be a little to read, but I just wanted to give you
an illustration of how a tax cap would affect districts, wealthy and poor, and really widen
the gap. This chart was actually produced about a decade ago when another similar
proposal had been made. On the left hand side, is a low-wealth school district and on the
right a wealthier one. I just for the purpose of illustration gave each a budget of $10
million. The lower wealth would get 80% of their budget from the state in the form of
state aid, and they'd raise $2 million from the local tax levy. The reverse is true in the
wealthier district. They would get only 20% of their operating funds from the state, and
they would raise $8 million from the local tax levy. Well if you had a 3% cap, the
wealthier district would be able to raise $240,000.00, while the poorer district could only
raise $60,000.00. Over time, you're going to really compress the poorer school districts,
which really have virtually nothing to cut. Go to the next one if you would. In summary,
the problem here – while we've had a significant reform in terms of the way state aid is
done; it is still being done within the Shares agreement. The budget that was passed
yesterday with a $1.8 billion – I mean an incredible large increase in school aid still had
13% of the money going to Long Island, 38% going to New York City. Final count on
here – low-wealth school districts would clearly be hurt more by a tax cap than wealthy
districts. We still need fundamental, equity in the distribution of state aid. I don't
believe, aside from the Medicaid piece, which has been mentioned, I don't think there's a
single thing that you could do that would help reduce the property tax burden as it now
exists and providing more equitable distribution of school aid. Any tax cap clearly has to
distinguish between those mandated requirements that the poorer school district is
required to offer versus the choices that a wealthy community can make in offering much
more enrichment. That's the key here. Wealthy districts spend money on enrichment,
while poorer districts have to spend money on remediation. Finally, the capacity to pay
taxes has to be given a more consideration. Thank you very much.
Thank you very much, Larry. That's very helpful testimony. You know, there's one thing
that Larry's testimony highlights, though, and it's something that we have to be very, very
careful of in this process. When I'm downstate New York speaking to the people on
Long Island, it's important for me to point out when they hear what the taxes our up
upstate they say, "Boy those taxes are so low compared to what we pay down here. The
dollar amounts seem so low." When I'm upstate, I hear from people say, "Well
downstate, boy, their house values are so high. They can afford to pay those property
taxes." We're really not giving the full picture in either region, especially when we try
and say, "This group's got it better than that group." It's a very dangerous formula
because the reality is, is that in both areas it comes down to much of some of the
testimony we heard here recently about people's ability to pay because I tell stories all the
time about people downstate, for example in Levittown, where the combined-wealth ratio
may seem high 'cause the property values are high, but senior citizens bought their homes
in the 1950s and 1960s and their houses were affordable housing for the returning
veterans after World War II, and their house cost them $9,000.00 or $12,000.00 but now
their house is worth $350,000.00 or $400,000.00, but they're on a fixed income, receiving
only Social Security with income of $18,000.00 or $25,000.00 a year. They can't
possibly afford the $ 7,000.00 or $8,000.00 a year in taxes. I had two veterans in my
office the other day. Guy's income annually was $48,000.00 a year after his STAR rebate
his taxes were $6,000.00 a year so he was still paying – what's that percentage? Sixteen
or 17% of his income in taxes. I met a woman today upstate here in Syracuse who is 81
years old, who's taxes by downstate standards are relatively low, but she bought her
house for a few thousand dollars. I can't remember the numbers she said what she bought
for 50 years ago. Now her house is worth over $100,000.00, she was saying how she was
so fortunate that her house was worth so much money, but she's 81 years old, she can't
afford to pay her property taxes and she had to work on a regular basis at the school that
we were meeting at this one for the Thursday morning roundtable to pay her property
taxes. It's very, very important – I know downstate many stories of people who live in
these combined wealth districts, it seems like they're high, that are suffering incredibly
and I know that many people upstate, like the stories that we heard before of people that
are in low-wealth districts that are also suffering incredibly. We have to be careful the
combined-wealth ratio is a very dangerous number because it includes both income and
property value. There's a lot of folks, upstate and downstate, who relative to their
neighbors may seem house rich, but if their income poor, they can't possibly pay their
property taxes. We have to be very conscious of that, and we should be very careful in
both regions of pitting ourselves against each other as opposed to recognizing the
common problems we face. I think there's definitely a problem with school districts like
the – I don't want to pick on a particular school district, especially from my area, but
some of the wealthy school districts that you mentioned in this area that don't have a
property tax problem. They don't. They've got property values that are worth are worth a
lot of money, but their incomes are also very high that they can afford to pay those
property taxes in those places. We've got other places where their property values are
relatively high, especially when compared against upstate, but their incomes are
relatively low and they cannot afford to pay their property taxes. We've got to be very
careful 'cause one size does not fit all in a lot of these circumstances regarding the
statistics, but that testimony is very helpful and we appreciate. Do you want to add
something to that Rick?
Yes, Chairman, please. Let's not forget the point about the equity. Skaneateles, New
York, a school district about 30 minutes from here, to hire one teacher they'll have to
raise taxes 2.5% to meet the new learning standards by the regents. So what happens is
they don't have 26 Advanced Placement course in which they can cut from. What I'm
saying is, the largess of the state, this huge tax increase – excuse me state aid increase is
being spread around inequitably. Therefore, what happens, places that are wealthy are
able to use this for property tax relief. Places upstate are basically using it to keep basic
and remedial programs going. There's no place else to go. This elderly lady you talk
about who was a very poor 81-year-old lady. She's paying all she's got for a basic,
remedial program. They have no place to go so the burden is tremendous on average and
below-average wealth districts. I think that is the other key. What you're paying for.
The state aid going to wealthy districts is paying for 26 Advanced Placement courses.
Not fair education for everyone.
May I ask a question?
Let me just say one thing, Merryl, if I may. Again, I want to point out I don't want it to
be region pitted against region. In Nassau County we've got two of the worst run school
districts in New York State, one of which has been taken over by the state and one of
them which is close to being taken over by the state. We have other school districts that
are considered to be wealthy districts 'cause their combined-wealth ratio, but don't have
these programs –
That is correct.
That you've pointed out before. They're in the same situation just paying for mandates or
new special ed students coming through the school district and they're in a lot of trouble
the same as Skaneateles is.
We have advocated for money for them as well.
I was just curious, sir. Is there in any written material about how this locality feels about
the new state aid formula known as the foundation formula?
Well we've got 300 members that are unhappy with it.
I would say that – okay.
That's why we're advocating a change in the formula. It's still inequitable. What's
happening is there's a growing [inaudible] provision because what we have is a
manipulation of the formula. If you look at the portion called the Local Tax Separate
you'll see it's greatly manipulated with a number shearing ratios, the use of income
measures and so on. It's not that we don't think that some type of equity can't be devised
that way, but as it exists now, for instance, the two that Larry showed on the slides. In
the wealthy school district the tax rate was $12.05 per thousand. The Local Tax Separate
requirement is $16.00 per thousand. Then I would ask the Commission why did these
people still get more state aid? It doesn't work. It certainly could be changed and altered
to make it more effective, but it doesn't work as it's written. Also, the high tax aid – a lot
of this high tax aid is going to places where by we're paying for the extra Advanced
Placement course rather than the basic program. They have high taxes because they've
chosen, in some cases, to higher taxes to pay for these things. They're simply
unaffordable in other parts of the state and sometimes we have even in downstate we
have rich districts right next to very, very poor districts, and they suffer the same
problem. If you've looked at press releases from downstate, you will see that Long Island
districts, for instance, that are poor are suffering the same angst as upstate districts that
are poor. But truly, AIS and the new standards cost a fortune, and what happens is
upstate and poorer districts are struggling to meet those standards. They want to meet
them, but look at the test scores. I would suggest to the Education department to study
and actually find out where the test scores are the best; in high wealth or low wealth
districts or medium wealth districts, and you have the capacity to do that.
Thank you very much. Okay, at this time I'd like Jessica – give him a round of applause.
They did a great job. Jessica Cohen, the Superintendent of Onondaga-Courtland-
Madison BOCES. Thank you, Superintendent.
Thank you very much for allowing me to spend a few minutes to talk now about the
revenue side, which Larry and Rick did an excellent job talking about but about the
expenditure side and a strategy that is used in a number of places across the state to deal
with the rising cost, particularly those cost drivers that impact education. I'm going to
talk BOCES. It's the organization that I've been affiliated with for the past 16 years. It's
the organization that I am the District Superintendent of in the Onondaga-Cortland-
Madison region, and have been that for the past six years. BOCES has been around for
60 years. It was created by the legislature to provide shared services primarily at that
point to regional - rural school districts, but has expanded to provide services in more
cost effective way to any school district. In 2008, we have 37 BOCES that are doing that,
and I know that in audience there are at least two of my former colleagues who are retired
District Superintendents. Our BOCES here in Syracuse has 21 facilities across the three
counties. We serve 62,000 students. That's not including the 21 or 22,000 in the city of
Syracuse. We have 23 component districts including Skaneateles, which is that 500 or
600 student district in Portland County and including North Syracuse, which is 10,000
students. We serve districts over three counties and serve districts ranging in size from
real small ones to North Syracuse with about 10,000 students. I know that this
Commission has heard from my colleagues across the state so I'm not going to go through
all of what you've heard from Don Ogilvie and what you will hear from others. I do want
to highlight a couple things. I think that we do some things that are primarily the same
but some things that are different here in Onondaga County. Clearly, we think that
BOCES provides as you start to think the expenditure side a way to provide more
accountable services not only for school districts, but for municipalities, and we do that.
This BOCES has been involved in doing that for probably the past 20 years in variety of
services. We think we do that in a way that promotes efficiency and certainly promotes
equity among small and large districts. Rick and Larry talked about equalizing wealth.
We think that BOCES, in some senses, does that at some levels. What we'd like you to
do as some of your solutions is to think about expanding that, encouraging that and
certainly expanding that to municipalities either through BOCES as a structure or through
a similar type of structure with the kinds of incentives that have been provided to school
districts for the past –
Now you don't do that now, right, with municipalities, do you?
We're going to want to follow up on that so I'll have somebody else call you about that.
I'm going to talk about that just real briefly.
We know that when we think about the costs drivers in schools and in municipalities,
utilities, health care, certainly the new mandates at the federal level, at the legislature
level and at the Board of Regents level, pensions and salaries. We're talking about what
we have been calling functional consolidation. I do searches for superintendents. I just
last night completed my third in the past three months. Every search I begin, particularly
in small districts, the first question I ask is, "Your superintendent is leaving. Do you
want to think about consolidating your school district. Do you want to think about
merging?" And we go through what is primarily a useless endeavor on my part because
small, rural school districts want to maintain that –
The identity. The basketball team. The center of their community. Not that I'm going to
give up on trying to work with school districts where it makes sense to consolidate, but
we're talking about consolidating services. There is no need to have 23 business offices,
23 folks that do personnel. We talk about it as a mechanism for controlling expenditures.
We also talk about it as a mechanism for more effective and efficient services because
people are trained. They're supervised in a very different way than if there's one or two
people doing payroll or doing accounts payable. We also – it is a movement from local
control to local involvement, and one of the highlights way we operate as a BOCES is,
certainly, to get that local involvement. Our experiences have been to provide
consolidated services in energy, and that's one that we do with municipalities. In workers
comp, health insurance, cooperative purchasing, health and safety, and we do that with
some municipalities in this county, printing and technology. If you flip to the next one,
this is the example of one of the services that has been around since 1987, which is called
the Municipal Energy Cooperative because, in fact, we serve municipalities as well as
school districts. We purchase natural gas and electricity for 142 school districts, 24
municipalities. We do bidding. We do payment of bills. We do bill auditing and we
provide other value ads like support for energy conservation. This has been going on –
we have in our facility off of Carrier Circle, 10 people who take care of buying and
billing and paying for the natural gas and electricity for school districts and
municipalities from the Albany area almost to Batavia, I believe. If you flip over, these
savings are just for our component districts, our 23 components. We do have the
information on our savings over time for every participant individually and collectively,
and certainly could provide that, but in the area of electricity, $5.1 million.
And when you say we, you're talking about your BOCES or talking about the consortium
on the energy?
It's the New York State Municipal Energy Collaborative which is through the OCM
Do you run it outside of the lines of your district or just within your district?
Yes, we run it from Albany to Batavia.
Oh, you do?
It's any –
Well we served by National Grid on Long Island now who took over [inaudible].
I know and we were actually asked by the BOCES on Long Island if we would be willing
to expand and we had discussions with them about them doing it because of just the size
and our belief that at some point you get to big, but it's certainly a possibility. We've
shared with them.
Or we could do it independently. Listen, I'm going to ask you to follow up – we're
actually working on creating a central business district in my county that I'm actually
spearheading with the BOCES and the superintendents and the school boards. We're
trying to create a model for that to –
We also have essential business office as do a number of other BOCES.
We want to create a central county attorney's office, for example.
We don't do that.
We want to do that instead of having 56 different contracts, we want to have one,
centralized attorney's office, one centralized auditing function, one centralized IT
function, one centralized purchasing function, one centralized transportation function and
do everything we can that's not related to instruction and education through one office
that has the benefits that you're talking about: economies of scale, professionalism,
expertise and the like.
And if you look at what we've done last year, because we got together with 25 districts
for workers comp. Our savings compared to the state system is almost $1.9 million. We
buy health insurance. We run one of the largest health insurance –
Let's go through the rest of this quickly. We agree with what you're saying. The details
we have to work on with staff [inaudible] to see if we can replicate it.
Don Ogilvy actually walked us through almost exactly the same issues you're walking us
Don is a colleague. These are some of the other examples that we currently are doing. I
won't read them all, but we certainly do them. We have a technology center in Nassau
BOCES. We serve 50 school districts. We are the roadrunner for those 50 districts as
well as everything else. Here are our regulations and they are exactly what Dr. Ogilvy
suggested. We believe that if we focus on the efficiency in consolidation if you look at
that model that we have, if you provide those incentives, it is something that as I go
around the country folks are envious of the BOCES system because of the consolidation.
Build that capacity and make sure that our state agencies are not at odds as we try to do
I've got a question. Of all the school districts from Albany to Batavia you said that you
service, what percentage of school districts are in your consortium?
You know I don't know that.
About half of them or quarter of them?
All of our school districts, our 23 are all in it. I don't know. I'd have to –
I guess the point I'm trying to raise is why would the state say, "Sorry folks, you all have
to be in this and do it in order to get your state aid. "If it's saving that much money, why
isn't there a mandate for everybody to be part of this consortium? It would seem it would
You've been in politics far longer. You know the answer to that.
You know I'm sure there are lots of reasons for that.
What I'm saying is I think that – you know school districts carry a lot of weight with the
state legislators and I think it's time that, perhaps, in this discussion –
Not to be flip about it.
They say that the backroom functions, all the things you're doing there should be required
as part of the BOCES program. It would make life easier for everyone and I think would
help in this entire situation.
We've seen in the six years that I've been here because of the financial pressures, because
of those cost drivers we have seen a significant increase in participation in those
consolidated services. It was very easy for folks not to do it before, it's harder now.
Certainly your Commission can come out with recommendations that would support that.
Thank you, Jessica.
And we'd be more than happy to –
Thank you Superintendent, we appreciate it very much. I'm going to be get a lot stricter
with people moving forward. I want to recognize two people that have joined us. I don't
know if they're still here, but Assemblyman Bob Oaks from Wayne County, is he still
here? And Assemblyman Al Stirpe – Al, thank you very much for being here. We
appreciate it very much. Okay, I'm going to ask Randy Care who's coming up next and is
someone from the County Executives office here also? Are you going to want to testify
on behalf of the County Executive? Is it all right if Randy goes before you? Do you
Okay, Randy we're going to ask – I'm going to start cutting people down to three minutes,
but I'm really going to hold you accountable now going forward.
I want to respond to why schools will join functions like a CBO, a Combined Business
Office, and why it might be difficult to mandate that since I think it was an excellent
question. Schools will migrate to that over time, but that's a consideration both at the
local school level and the BOCES level. If you mandated that all schools starting next
year be part of a shared business office, BOCES would not typically have the capacity to
take on all the school at one time. They also have to build the capacity to bring in the
financial information and the business operations of a district. What districts locally are
doing is they are migrating to that type of service in BOCES. Like my own district is this
year to the shared business office as we can retire staff out of the district. That is a
perfect time to do that type of migration, but it's an excellent question.
And you have to also show that it's entrepreneurially competitive and it's not just
competitive based upon the fact that it's aidable. You have to show that the cost would
actually be less based – because the cost is less not just because the it's getting a huge aid
from the state. Okay Randy go ahead.
So a number of great comments made earlier and I will echo some of those and go very
quickly. My goal today is to give you a view of what a 1,300 student district that is a
rural district an hour and a half south of here looks like in reality with some of the state
numbers. I'm going to do that by talking about how we develop a school budget, what
drives our costs, how we try to contain those costs, our impact as a school district upon
tax rates and then some suggestions, which will echo much of what you've heard. Our
process for developing a school budget. I hope you realize that there is already a
spending cap imposed upon districts in New York State. If our budget is defeated, we
cannot spend more than 120% of the CPI. That is our budget to budget change limit. So
we already operate under that if the voters do not approve our budgets. What we do in
our district is we provide clear direction to our administration for how we want them to
put together a first pass of a budget. In our district both this year and the previous years
we've directed them to put together a 5% tax levy increase budget and then show us line
items that get that down to contingency and get it down to zero. They've done very well
at providing that each year. After we provide that information, they start putting the
budget together, they show us historical trends for our own district running 10 years.
They show us comparisons with the districts around us that cover program,
administrative, capital tax levy impacts and the per pupil percent of budget and percent of
change of those across our district and our similar districts. Next we look at our known
costs and the changes. So for our district a 1% change in our budget year to year, a 1%
increase requires $215,000.00. That, if funded entirely by the tax levy, is a 3.2% increase
in our tax levy. The CPI that we're limited to is 3.36 this year. If we were to go to the
CPI limit funded entirely by the tax levy, that's 11% just on our local taxpayers.
Fortunately, in this case, two-thirds of all of our budget comes from the state. Eighty
percent of our budget is for staff and salaries. We are the largest employer in our area
and similar to the presentation you saw earlier we are that district that offers very few
Advanced Placement courses and other options for our students. State aid is two-thirds
of our district. The rest comes from local taxes. Seventy-five percent of our tax base is
residential property. Once we see the prioritized list of our budget, we decide where to
draw the line and that determines what our budget to budget increase will be and what the
potential impact on the tax rate will be. How do we control our costs or what drives our
costs, and you've heard much of this. Contractual commitments drive our costs. Health
insurance, retirement contributions, energy, program needs, the ability to move programs
to BOCES also drives our costs, class size which we can control, but enrollment which
we cannot, and of course mandates. How do we try to contain those costs? Our total
change proposed this year is just under $1 million. A 4.4% budget to budget increase. If
paid entirely out of our tax levy, we would be putting a 14% tax levy increase in front of
our voters. You're all welcome to boo if you'd like. Fortunately, as provided earlier,
state aid is a form of tax relief. What we are putting before our voters this year is less
than 1% and with the budget passed yesterday? Today? That will probably be zero. So
there is direct tax relief through state aid.
Randy, I'm going to have to ask you to wrap it up.
Okay, the suggestions, and you've heard some of these – please, realize the vast
differences between districts in the state. Our ability to have a budget to budget increase
of 4%, which turns into 14% on the tax levy, is very different than a district that has the
majority of its budget coming from tax levy already. We are dependent on what happens
in state aid. Next, cap costs. Before you cap tax rates, cap health care. Employer
contributions to TRS and ERS, energy and for state mandates, please, show the full cost
of implementation. If they're worth putting into regulation or law, they should be worth
funding fully. Automatically sunset mandates so that they are forced to reauthorized. If
they're good enough, they will be reauthorized. If things are good enough to be put into
law, they should be fully funded. Don't tie the hands of local districts with regulations.
Give us the ability to control our costs. As you've heard, there is no lack of support or
confidence in local boards, nor their spending decisions as shown by the popular vote.
The issue is that too many costs are driven down to us in local districts where great
disparity exist to be able to absorb and fund those costs.
Thank you very much, Randy. Joe Mariani.
Thank you, County Executive. Welcome back Nick. It's good to see you again. I'm here
representing County Executive Mahoney who like most of America's traveling
population is spending the afternoon in Atlanta today.
Backed up because of the situation there. I'll try to be brief. I know you've already taken
a lot of time and a lot of places to talk about the property tax situation. We won't recite
more statistics or too many more statistics to prove what you already know, which is that
property taxes in New York State are far too high and going higher. High property taxes
make it hard for young people to buy their first home, for seniors on fixed incomes to
stay in their homes where they've raised their family and for the rest of us to simply make
ends meet. High property taxes depress real estate values and they force business to flee.
We have a mess on our hands and it's not hard to understand why. The property tax is a
clumsy, inaccurate, antiquated way to measure a taxpayer's ability to pay. It's a tax on
potential, future wealth. Wealth that won't be realized or available to pay those taxes
until the property is sold, and its rigidity is downright cold blooded. When a person
suffers the loss of a job, for example, income and even sales taxes will go down but not
property taxes. Property taxes just keep on rising. In spite of that, under state law the
property tax is the primary source of local funding for every county, city, town, village,
school district and special purpose district in the state. In Onondaga County, those
governments and school districts levied a total of $818 million in property taxes last year.
That's nearly $1,800.00 for every man, woman and child in Onondaga County. Today a
homeowner or business owner in Onondaga County should expect an annual property tax
bill that's about 3-1/3% of the value of that person's property. That means that a
$200,000.00 home pays a $6,700.00 property tax bill each year. According to a report
put out every year and reported in the newspaper every year by the tax foundation, that
makes our property tax burden among the highest in the nation. In fact, nine of the top 10
counties on that list are located in New York State. As you well know Mr. County
Executive, that's not a coincidence. Property taxes in New York State are higher than
other states in large part because New York State shifts more of its own costs to local
government than any other state. That makes state costs and taxes look lower and our
costs and taxes look higher. If the goal of this Commission is to develop ways to reduce
the heavy burden of local property taxes, then I submit your first recommendation should
be for New York State to follow the lead of virtually every other state in the nation and
pick up the full cost of its Medicaid program. That single action would reduce the
counties property tax levy by 51% or $92 million. Obviously, the county is only a
portion of the homeowners entire tax bill. However, that takeover of Medicaid costs
would reduce the overall tax burden of property owners in the county by approximately
11%. That would save the average home owner $450.00. Some say this wouldn't solve a
problem, it only shifts it. We disagree. We think that charging the most progressive
social program, perhaps in the nation, to the most regressive source of taxation, the
property tax, is simply bad policy. Second, the County Executive would like to suggest
the implementation of a cap on property tax assessments of senior homeowners. As you
know, most senior citizens exist on often modest fixed incomes. However, as their
homes appreciate in value, their assessments rise often producing tax bills that are beyond
that seniors ability to pay. The only choice at that point is to sell the families home.
That, in our view, is heartless public policy and contrary to our shared goal of assisting
the elderly remain independent and out costly long-term facilities. We propose the
capping the assessment of a senior homeowner's primary residence sheltering that owner
from inflation-based increases in their tax assessment. The cap would extend to all
seniors and would apply only to the assessments with tax increases tied to rate growth
would still be passed on. When the property is sold, the property would be reassessed.
Finally, and with a deep and sincere respect for the incredible work that goes in our
schools, we also think there must be a careful and thorough review of school revenues
and expenditures in New York State. I know that in Onondaga County school taxes rose
by 55%, school property taxes rose by 55% between 2000 and 2007. That rate of growth
is almost exactly two times higher than the rate of growth in local government taxes
within the county. The tax increase is the equivalent of $173 million in school taxes
since 2000, and for an average homeowner that means an extra $860.00 a year in school
taxes. In our upstate economy in our community that's simply too high of a burden to
bear. Therefore, we recommend that you look at the way the state funds schools and the
way can intelligently constrain the growth in school spending while still achieving
educational excellence. Again, we thank the Commission or undertaking this important
task and for your courage in reporting our recommendations that address the problems of
an overburdened property tax system.
Joe, thank you very much. I know you have seriously edited your comments along the
way. We appreciate it very much.
I did it in my head.
If you want to submit it to us in writing, we'd be happy to take it.
And tell the County Executive Mahoney that I said hello please.
I certainly will do that.
Thank you very much. Okay, Tom Daly from the Cooperative Organization of Public
Education. Tom, I'm going to be tough on you so you – we've got to keep it moving. I'm
way behind schedule.
C. Thomas Daly
I'm going to severely limit the comments I make. I'm giving you a packet of materials.
One little brochure explains who we are. I've given you a set of – written – two pages of
comments and testimony that I was going to give. I'm just going very quickly talk about
some of the things. People have already said the things that I was going to say. There is
not relationship always between school spending and school taxes. If you would just
quickly look at attachment 1 in the packet that I gave you, I've given you a 23-year
history of a small district – 1,300 people district in the southern tier below Ithaca, which I
happen to serve as superintendent of schools for 13 years. If you look at the chart, you'll
see the red line is the percentage increase in property taxes and the blue line is the
increase in the budget. And as you can see, they're all over the place. It's a variety of
things and there's two spikes in there. I was there from 1992 to 2005 when I retired and
there were two big spikes due to some things that we had happen in the district. A cap
would not of – would have made it even more difficult for us because these were things
we needed to solve particular problems. Districts might not have those kinds of things
but you'll see unevenness, and they're not parallel lines and you know that. And you can
see in many years I had no property tax increase and one of the problems with a cap that
has kind of been said, but I want to reinforce, a property tax cap on the increases will do
nothing to relieve the currently high property taxes. People dislike property taxes, and
you've said this and it's been said several times today, whether you're paying what you're
paying on Long Island, which can be in the tens of thousands of dollars, I was shocked by
the gentleman who said they were paying $13,000.00 in an upstate community or
whether you live in my little rural community in Tioga County where I pay $3,000.00 a
year in property taxes, but there are people in my community that hate property taxes just
as much because property taxes, when you pay them, should be a function of income and
everybody else has said that. There's no relation between what your ability to pay. I
want to urge you to look at the concept of a Circuit Breaker rather than a cap on how
much taxes can go up. A Circuit Breaker would bring fairness to a system that is now
unfair. The second attachment in there, and I'm not going to spend any time discussing it,
I did a little study of what would happen in various types of districts. Most of you know
the State Ed Department has various types of school districts by need, high need, urban,
suburban, [inaudible] average need district which is the bulk of the districts and low need,
which are wealthier districts. Under the current state aid system that's place, low-need
districts would have the disadvantage in terms of meeting some kind of cap. When there
was lower increases in state aid, the districts most hurt by a property tax cap would be
rural, high-need districts. That study is there, John, if you want to talk with me about
that, I would be glad to share with you what I did. The third attachment in here is a little
more extensive. There's a lot of data in there and it looks at the residential property tax
levy and income. There's quite a bit of data there. A year ago the division of the budget
did a presentation to the New York State School Boards Association in which they used
2003 data, and they looked at what percentage of income, and what they did was they
created a tax rate per $1,000.00 of income. Now that happens to be ten times over the
percentage of the ratio. You know, if you pay 4% or 5% or 6%, that translates to 4%
would translate to a $40.00 per $1,000.00 of income. I will tell you that the data there
showed it's uneven across the state. The data you will see in front of there is that
wealthier districts tend to pay a higher percentage of their income into property taxes.
There is this concept and I have a slight disagreement with my colleagues who I know
very well and I've worked with on the property tax – the wealthy districts can afford to
pay more because I happen to believe that the people on Long Island relative to their
income are paying high taxes. And most of the district –
Well, I think, their data said that. Their data said that they're paying a higher percentage
of their income on Long Island.
C. Thomas Daly
And the data that I have here will show the very same thing, and it will also show that –
I've looked at some data over three years. What I did was take what the Division of the
Budget did, appended it two more years, shows that income overall in the state grew
faster than property taxes, but not in all kinds of districts and there's a chart in there that
Tom, I have to ask you to wrap it up please.
C. Thomas Daly
Please look at the concept rather than capping property tax increases look at the concept
of a Circuit Breaker. A Circuit Breaker for all the reasons that have been well-
established here today is a better way to go.
Thank you very much. Now, I want to make it clear for the people who are going to be
testifying going further. This our sixth or seventh hearing. We are convinced property
taxes are a problem. We are looking at property cap. We are looking at Circuit Breakers
and we are looking at root causes and mandate relief and we're also looking at some state
aid issues so I want you to be convinced that we're looking at each of those things. We're
looking for specific recommendations as to what you think can be done to solve the
problem and you don't need to convince us that the problem exists or that each of these
things needs to be looked at. Linda Yancey, Assessor to the Town of Forestport.
Thank you for this opportunity to speak. Let me introduce myself. I have 30+ years in
the assessment field. I have been a County Director. I have been a Deputy
Commissioner of Real Property in New York City and was one of the forerunners that
pushing for the recent legislation that the assessors in New York City would be educated.
I'm going to skip over the first part of my paper because it's been pretty much covered
and just the things you were talking about. I want to point out –
Thank you for that.
One thing about the STAR. The checks that you sent out or that the legislature sent out
last year for the STAR rebate weren't accepted by the public as tax relief. They thought it
was an entitlement. Our recommendation from assessors would be if you choose to do
that sort of thing again put it as a line item on the tax bill that it's reduced the tax bill. Do
not send out checks. People that were deceased even received checks. Totally agree with
the comments about the Medicaid. Once the Medicaid became very high, then we began
to have all the public complaint about taxes. After 30 years in the field, I can see where
that change has happened. One of the biggest things I'd like to talk about is related to
assessment, revaluations, full market value. That is the measure back in the '70s was the
Islip decision to go to full market value and in 1980 that was changed to go to a uniform
level of assessment. The ORPS office has tried all types of methods with carrots to get
that to happen. Now you have talked about the Massachusetts model. They have a Cycle
bill, and have had it for many, many years. It works. We need one. One of the other
problems we're having now is a lot of jurisdictions are trying to stand with the full market
value measure of assessment. What they are at the mercy of companies that come in that
are unscrupulous, overcharge and do not follow good technical, statistical measures as
taught by the IAAO. A recommendation would be that now that the state schools get a
program for a degree in assessment or in revaluations or some kind of related field that
could bring them into this career path. Presently, the town that I just involved with is a
nice, small town at the edge of the Adirondacks in Oneida County. It's not very rich. A
company that was there tried to overcharge this 3,500 parcel town a total of $9,000.00.
The neighboring town just tried to go to full market value. The company came in and
didn't follow statistical measures and over-assessed them by close to 30% to 40%, and
now they've had to throw that out and all the costs are all incorporated with have to
revamp and start over again. Part of the problem is we still have part time, elected
assessors that aren't using assessment as a career path. It is time to move in that direction
as a regulated path so we need a cycle bill. We need standards now for these companies
that are out there doing the revaluations. Some states already have inbuilt within their
state systems overseers of the companies that do the revaluation. Everything else has
been pretty much said, but the truth is the assessors out there that are trying to do their
job are usually the ones that told by legislators or asked by legislators, "Why are you
following the law?" That happens so much. Those that are doing their job are being
crucified. Those that play the good old boys system are the ones that are being rewarded.
I want to make sure we've got Linda's testimony referred specifically to Lee so he can
look at the Cycle bill and the other points that she's making.
That's a really important.
You make some very important points that very few people pay attention to, and we take
it very seriously.
The assessors that are doing a good job are not rewarded.
Thank you Linda. Lee, I want you to make sure that you talk with Linda. Do you know
each other already? Do you know Lee back there? Yes? Her testimony could be very
helpful. Larry Kiley, Executive Director of the Rural Schools Association of New York
State. Is yours a superintendents association, a school boards association or just the
whole schools association?
Combo, okay. Larry, please keep it brief if you can.
I got your message early on.
Thank you, Larry.
And I will encourage you to turn to page 4.
Thank you, sir.
And, basically, we represent the small and rural school districts in New York State. We –
our member organization – 273 members across the state. One hundred and forty four of
those members are high need, rural school districts. By high need we mean they are low
income and they are low on property wealth. On page 4, I've identified two districts to
give you an example of what we're talking about. One is the Friendship school district
located on the southern tier along I-86. There are only 400 kids in that district in grads
K-12. It's rurally isolated. They've tried to dance with somebody else in terms of merger.
It hasn't worked for them. But if you take a look at their capacity, it's extremely limited.
They're a high aid district. Their aid ratio is better than 0.8. Their wealth is down about
0.30, and a percent increase on a tax levy raises $14,000.00.
That's in Allegheny County?
That's in Allegheny County. The second district that I mentioned here is in rural St.
Lawrence County. It's a merged district, Edwards-Knox. They have around 700 kids.
The profile is very similar. They're able to raise a percent increase raises $13,000.00.
Oh my gosh.
So when you take a look at these districts and there are 144 of them across the state, if
you're talking about the raising – putting a cap of 4%, the couldn't higher a new teacher in
terms of what they're able to raise on a tax levy. I appreciate your comments with regard
to the need to take a look at our state as a whole state and I agree with you. We should
look at New York as a whole state. The reality is there are two New Yorks. You have an
affluent, metro and a growing affluence up the Hudson Valley corridor and you have the
rest of the state. The people that I represent live in the rest of the state. And very
candidly, a property tax cap would be very injurious to, particularly, the 144 high-need
rural districts that I tried to profile here.
The problem is that by even raising taxes, though, they don't generate much revenue to
solve their problems and they can't afford to raise their taxes even more.
The other interesting part of this, and I didn't include it in here but I'll share it with you. I
dug a little deeper in terms of these two districts. I mentioned one is merged and the
other is not. The tax on true in the unmerged district is $33.00 a $1,000.00. The tax on
true in the merged district is about $13.00. So the incentives for merger are – we should
continue them. We need to look at other ways of encouraging districts to cooperate. I'd
add to the list the notion of a regional high school. In many instances in the districts I'm
representing, a school in the community is very, very important. Quite frankly, their
viability as a community really rests on the school. If you go to Friendship, New York,
you'll know the school because it's the only good building in town. It's important that we
think about the importance of the school in terms of the economic vitality of these
communities then thinking of regionalizing maybe their 7-12 or their 9-12 programs. Just
a small anecdote, I've been working with poor districts out in Chautauqua County. They
received the Department of State grant to look at the establishment of a central business
office. Out of that grew a look at functional consolidation. The outcome of the study
itself is in eight districts in that county are seriously considering a central business office
and there are two mergers studies that will be taking place in that county. So districts are
looking at this issue very seriously. They are trying to find answers and anything that we
can do in terms of supporting those efforts would appreciated. We have a problem with
the property tax cap. It would be devastating for the districts that we represent.
Thank you very much. We appreciate your consciousness of our time restraints and also
your very important testimony, Larry. It's an important perspective that we don't get
enough attention on the rural school districts. David Duerr, the Executive Vice President
of the Greater Syracuse Chamber of Commerce. Now we're really going to have to break
out some of our thinking regarding rural school districts the five big dependent school
districts and the suburban school districts.
Good afternoon, Mr. Chairman and members of the Commission. Nick, hello. I'll skip
over part of my presentation as well.
Thank you, David.
Keep an eye on task. Good afternoon, my name is David Duerr. I'm the Executive Vice
President of the Greater Syracuse Chamber of Commerce. We're the largest and oldest
business organization in central New York over 2,200 members representing about
160,000 employees. We're thrilled to be here today. We do have a chart that's being
passed out with our remarks. I won't go through it so that we're not redundant, but as Joe
mentioned, we are, in fact, 11 of the 12 debt counties in the country.
I use this in my PowerPoint presentation that I give to other groups.
So we'll –
Onondaga County is number seven in the country.
As far as property taxes. I will spend time on solutions and improvements to our plight.
It will take great courage and effective marketing to sell the solutions to the problems
behind our high property taxes, no doubt about it. For starters, take advantage of the
opportunity before us of the coming retirement of significant portion of the public
workforce. In Onondaga County alone in the next five years, we have 30% of our
workforce that's eligible for retirement.
Do you mean the public workforce or everybody?
The public workforce for the county employees, about 4,400 currently. Use this natural
attrition to its best advantage by implementing flexibility in our state and municipal
workforces. Not taking such action will probably doom us to ever increasing costs; make
it easier for the state, localities and school districts to deal effectively with this wave of
retirements that should result in net savings and efficiencies. Then lead and clear the way
for government modernization for localities and school districts. Remove mandate and
legislative barriers to progressive, more modern and efficient operations from software,
interoperability, inter-municipal agreements and, yes, even consolidation. Technology
can make a huge difference. It would be an appropriate role for the state to setup certain
platforms, fund implementation, et cetera to bring local municipalities and schools into
state-of-the-art operations that accommodate increased collaboration. School districts
and local government consistently complain about mandates, especially unfunded
mandates. They can help you prioritize which ones are the most operationally onerous
and costly. Please bear in mind that mandates that cost time and paperwork really do cost
taxpayers money. Changing some public policies such as Wicks and section 240, 241
will save money on every publicly funded project. Even though Wicks is apparently in
this year's budget, we would advocate for a higher threshold for upstate. One to two
million would be better range. We hope for a miracle to revisit this issue. We urge you
to market your recommendations and the need to make changes. Reward and market
success stories. The impediment to change in many cases is political turf, no secret there.
Governor Paterson and his Commission can do much to create an environment more open
to change at the local level. Regarding STAR and cap on the growth, property and school
taxes. The cap is one of the missing ingredients, we feel, in the STAR formula. Without
a cap on the growth of school budgets and taxes STAR, in some ways, made it easier for
taxes to increase. Further, since businesses, especially small businesses, have been
completely excluded they end up bearing more of the brunt of the tax burden than they
otherwise would. We support expanding STAR to small business if we continue with a
STAR program. We feel it's a band-aid approach, but it it's the band-aid that we're going
to use, let's extend it to small businesses. A workable cap on the growth of school and
property taxes is absolutely critical to end the out of control growth that has driven our
tax burden into the stratosphere. Employers in upstate struggle with a tax burden as a
cost of doing business, but now it's become a workforce issue. Upstate has lost and is
losing population. Even the businesses in central New York who have new jobs to fill,
struggle to recruit the employees because of sticker shock potential recruits find when
they look at buying homes in our communities. They take jobs in other parts of the
country rather than have their property taxes triple or quadruple by moving here.
Whatever recommendations you make to resolve this situation, there will be opposition.
We will support you to our members, our representatives, and to the public. Be
courageous. The business community will stand behind you. Thank you for your work
on this Commission. It's a job well-worth doing that can directly impact the economic
future of our state.
Thank you, David. We're very grateful for your testimony. Okay, at this time I want to
bring forward – is Tom Seals here? City Council member?
Good afternoon to the New York State Commission on Property Tax Relief and to your
staff and to Nick Pirro, good to see you. Thank you for giving me the opportunity to
speak to you this afternoon. As an elected official, I care especially about the education
of every child in my district and have always done everything in my power to ensure that
students have the tools they need to succeed. However, despite the dedication of our city,
teachers and administrators our city schools continue to struggle. My many interactions
with the City of Syracuse school district has reinforced my belief that our present level of
realized property taxes to fund schools is inherently unfair. Right now, our education
budget is 50% of our overall budget. Currently, the city council is operating in a city
where over 50% of properties are not taxable for various reasons and we are closely
approaching our constitutional limits in terms of our ability to further tax city residents.
We want what's best for our children, but we cannot ignore our obligation including the
numerous services we must provide for our residents. We simply don't have the
resources to make up for deficits in state funding and address state mandates without
creating serious cuts to services. In order to create an environment where our city and
our students can reach our full potential, we must examine ways in which we shift some
of the burdens away from localities. This dependent relationship greatly contributes to
the gross inequity among school districts in our county and across the state, and puts
Syracuse students at great a disadvantage when compared to students from more affluent
school districts. In addition, the way the structure is and currently exists it creates tension
between the city and the school district and forces extremely difficult situations –
decisions on how to spend limited resources. I know you are considering the option of a
tax levy cap, but I'm concerned that such a cap would not address some core issues
mentioned above and only lock in inequities as opposed to attempting to level the playing
field so our students can compete with students across the state and across the country.
We need more state aid for our schools and our city. Something like a Circuit Breaker
which takes income into account, provides target relief without putting our school district
at a disadvantage. Such a system allows families to stay in their homes while providing
new homeowners with the security that their property taxes will remain at a reasonable
rate. Increasing home homeownership in our city would greatly stabilize our struggling
local economy and help build a stronger community. A Circuit Breaker would relieve the
pressure on the households facing the most serious problems paying their property taxes.
In addition to assisting low income families, a Circuit Breaker can also provide tax relief
for renters by taking into account that a portion of their rent payments go to property
taxes. As an elected official however, I know what's most important is a bottom line and
a Circuit Breaker program costs money. I strongly support restructuring our income tax
system in a way that makes the upper tax bracket pay their fair share to generate
additional revenue. This revenue can be used to further alleviate the tax burdens on
localities. Thank you so much for your time this afternoon.
Thank you, Councilman. Margaret Diehl, Parents for Public Schools. I want to thank
everybody for their patience. I know many of you have been here for a long time. We're
very appreciate that you're so serious about this issue that you'd spend the time to sit
through all the testimony today. Margaret, go ahead.
Hello, my name is Margaret Diehl and I'm a founding member of Parents for Public
Schools of Syracuse. A grassroots organization of parents and other community
members who advocate for public education in our city. Thank you for letting me testify
today. I'd like to begin by saying that our schools should not be relying on property taxes
for adequate funding, but until we totally rethink and change the way we fund our
schools, Parents for Public Schools supports a tax proposal that makes property taxes
fairer by requiring that all property owners pay an equitable percent of their income. A
Circuit Breaker would do just that. It guarantees that you will not pay more than a certain
percentage of you income in property taxes. It directs help to people whose salary and
wages are not increasing at the rate their property taxes are increasing. People on fixed
incomes and limited incomes and people facing temporary hard times. The big question
is, of course, how do we pay for this. Parents for Public Schools supports collecting
more revenue by increasing income taxes on the richest 3 to 4% of our population. Right
now, low, moderate and middle income New Yorkers pay almost twice as large a portion
of their incomes in state taxes at the very highest income residents of our state. New
York has repeatedly cut income taxes on the very richest households reducing the top rate
from more than 15% to 6.85%. If New York simply returned to the mid-1970s income
tax rates adjusted for inflation, state revenue would be $7.7 billion higher but 95% of
New Yorkers would pay lower taxes than they do today. In Syracuse, where 40% of the
population owns homes, people are often paying up to 20% of their incomes in property
taxes. I grew up on Long Island in Nassau County in fact, and I have friends and family
there who are straining to pay their taxes, but while taxes are ridiculously high on Long
Island, the fact is, in central New York, where salaries and property values are lower
people are actually paying a larger percentage of their income in property taxes. We need
to shift the burden from the localities, but still ensure that our schools are getting the
funding they need. There is overwhelming evidence that increased school spending will
improve educational outcomes for New York States two million school children. Yet,
localities cannot continue to raise property taxes to meet these needs. Parents for Public
Schools urges you to seriously consider this proposal. It is blatantly unfair and un-
American that a quality public education depends on where you live and the wealth of the
family you happen to be born into. Thank you very much.
Thank you, Margaret. Okay, I can't get the first name here, but it's Spadafore, I think.
Mark Spadafore? Mark, are you here? I was going to congratulate you if you weren't
here. I was going to –
First, I appreciate the opportunity to speak with the New York State Commission for
Property Tax Relief. My name is Mark Spadafore, Executive Director of the Syracuse
Alliance for New Economy, also known by the acronym SANE. Our organization is
committed to creating a more participatory economy in our community through civic
engagement. I'm speaking today on the various proposals that that have been put forth so
far, and I applaud the efforts of the Commission to find the most effective approach to
imposing a limit on school property tax growth in New York State without adversely
impacting the ability of school districts to provide a quality education for all students and
to find the root causes of high property taxes as well as developing proposals to make
property tax relief system more fair for middle class property owners. I believe that as
the Commission researches and does these testimonies across the state of the issue of
local property taxes what I believe you'll find is that the situation that local governments
and school districts find themselves in is directly due to the fact that New York City
shifted the tax burden from the wealthiest New Yorkers, to those in the middle and lower
income classes of citizens. Our state government has created a system of taxation, that is
the most unequal of any state in this nation. Rather than creating a fair and equal tax
system based on an individuals ability to pay, we made our tax system more regressive
for the past 30 years. Because of the states shifting of this tax burden, local governments
and school systems have had to rely more and more on the only vehicles that are
available to them: property and sales taxes. In order to meet the needs of the public that
they serve. Therefore, we find ourselves in a situation today where high property taxes
are one of the sources of a regressive state tax system and it's squeezing the families of
moderate and lower incomes the most. As the Commission looks for ways to address the
problem of high property taxes, the Commission should look at alternative avenues of
revenues and also who should be collecting them. First of all, an increase in taxes on the
people in the highest income brackets would yield billions of dollars in additional
revenue. Estimates run from $4.7 billion to $7.1 billion depending on how much is taxed
at the higher rates. These projections would have closed the projected budget deficit that
the legislature and Governor face this year with some money to spare. That money could
have been reinvested in our schools and our sagging infrastructure. Second, having the
state tax higher incomes would make the system more fair and more equal to all New
Yorkers. If state tax rates had stayed the same as they were in the 1970s, as you heard
before, the state revenue would be billions of dollars higher. Clearly, by having local
governments collect property taxes and sales taxes in order to compensate from a lack of
revenues from state government, local governments end up funding and taking the burden
of essential services. Nationwide, state governments collect 58% of state and local taxes
while counties, cities, and governments collect 42%. In New York, these proportions are
almost reversed with the state collecting just 45% of total taxes and local governments
collecting 55%. This is the largest local tax share in the country. There's good reason
that elsewhere states collect the majority of state taxes. States have greater fiscal
resources than local governments and usually have a wider range of revenues to draw
upon. While local taxes almost always mean sales and property taxes, states also tax
income, corporations and inherited wealth. In addition, relying on states to fund a larger
share of local services spreads the tax burden more evenly among areas with high and
low income, and high and low needs. When a disproportionate share government
spending is funded locally, the areas with the greatest need are often those with the
resources. A mismatch that produces chronic budget crises as we've seen up here in
upstate New York. And finally, the proposal that taxes with income brackets as the very
richest New Yorkers to pay their fair share. We should institute a taxation system that
protects working New Yorkers from property taxes that are unaffordable. We should
have system that invests in our communities and especially in our schools, but a fairer tax
system where we all pay on our ability pay into the system people will see tax relief, I
think, that we are all seeking while causing our local community needed revenues. I'd
like to thank you very much.
Mark, thank you very much. Ralph Martone, taxpayer.
Hello, I'd like to speak, of course, on behalf of myself, which is trying to understand the
system that you're trying to correct. I have home in Syracuse that's 110 years old. I had
the board of assessment reassess me three times.
How much are the taxes?
In the neighborhood, I don't have the exact figure, $1,800.00, $1,900.00, but it's a just a
matter of that they were reassessed three time in a row upward, and I'm trying to
understand why, as a homeowner, I would be targeted just myself three times. My whole
street hasn't been reassessed so I'm trying to also find out why or how I can get the
information that is necessary for me to dispute my assessment because they're telling me
that I have to prove that my assessment is not what they said it is. That's a substantial
burden because you don't really have the information that they're using to assess me
Well, we can help you with that, Ralph. The gentleman over here is in charge of
overseeing all the assessment systems in the state. So while you have a local assessment
system, he's responsible for setting up the standards in the state so you can talk with him
directly and he'll try and help you figure it out. And if he doesn't, then you can call me
personally and tell me he's no good.
Ralph, I also – the Assessors office, if your in the city, is right on the first floor of this
Yeah, I came down here.
Have you talked to them already?
Yes, exactly my point. I did come down and you told me that you don't – I mean I
believe you should be assessing – reassessing people across the board and not just
targeting people here and there.
Did you make improvements to your house?
Ten years ago.
Was it related to the improvements that they did the reassessment did they say?
They didn't formally say that no. So my point is – I guess I want to say is why would you
try to increase one person opposed to, let's say, just increasing everybody a point instead
of trying to prove the value of my house, which is really just somebody's opinion. It's
really – it's not – you can't prove the value and so how do you go about disputing that?
Well why don't you discuss it with Lee, and we'll try and find out whether it was handled
properly or not. Okay? Instead of this gentleman here.
Okay, Bill Hecht. Bill, I don't have you as listed as any organization.
You're a regular guy too?
I'm just a regular guy.
All right, good. I like regular guys.
My family's lived in this area close to 200 years. I'm a retired farmer and geologist. My
father had a business that at one time employed in the neighborhood of a thousand
people. One of the sad stories that I feel is not being brought forward here is I've
watched over 40 years of a large proportion of some of the best minds that we pay
through our taxes to educate leave the state. That's ironic of why were standing here
Yeah, it's ridiculous. I can't – maybe some of the educators here can tell me, but I'd love
to see some facts and figures of how many kids do we educate in this state, particularly
upstate, and they leave.
I see a problem downstate on Long Island as well.
Now as far as something specifically that can be done. One of the things that could be
done is we have an incredibly antiquated taxation data collection storage system in New
York State. The RPS system. That needs tremendous revision. And one of the things
that can be done to empower citizens like myself is to redo the RPS system so that it is
fingered in with the New York State – statewide –
I've never heard of the RPS system. Do you know what the RPS system is?
The RPS system is the data collection database program that most assessors and counties
in New York State use. The Office of Real Property, at least a year or more ago,
absolutely refused to make some suggestions that I and my state senator – Senator
Nozzolio recommend to them. As a matter of fact, the Office of Real Property wouldn't
even talk to my senator and we should – Onondaga County has their tax system online,
but that's not enough. One gentleman here just said, "How do I fight my taxes?" Just
following the guidelines of the Office of Real Property, in my particular town and at least
two towns with the assessor that we have, isn't going to be enough. We need the – we as
citizens need all the data, not to just be able to look it up one property at a time we have
to be able to look at all the properties, do our own analysis and also get a visual
representation of the data that we're looking at geographically on a GIS system.
We actually have that down in Nassau County, and we should have something like that
statewide, but it's a significant change.
Others states – it can be done statewide, most of the data resides in Albany. My last point
is when they're collecting this data, if the data that the assessor is collecting is not in a
digital format, they cannot be pulling it out from here and there and all over to wave over
our heads and drag the process out. So we need a statewide database that we can look at
all the properties at once and combine that with a GIS system, that will go a long way
toward empowering all the citizens of the state that we can act as oversight to the system
because no matter what you implement we still need better access to the data. The
Attorney General's office for New York State, Bob Freeman, unfortunately, has ruled that
right now I cannot get the data to work with the RPS system because of two antiquated
state database programs. Unfortunately, Bob Freeman has ruled that the Freedom of
Information law does not cover that.
Why don't you talk with this gentleman over here at the end – also at the end of the
meeting if you're interested and you're willing to stick around.
I'm very interested.
He'll get his phone number at least and he'll try and share some information with you.
And in my particular case, I'm paying over $21,000.00 in taxes and well over 20% of
income. I live in the –
Is that for residential property or commercial property?
Residential. I live in a –
What's the property – what do they say the property's worth?
$786,000.00. I live in the Cayuga Indian Land Claim, and for as long as that's been going
on, I've worried about New York State an my local government taking my property than I
ever have been worried about the Cayuga Indians taking my property. That may very
well happen because I'm at a point now where I'm not only very angry with my local
government for not solving this, not just for me but for many other people, but I'm at the
point where I'm just going – I may just sell. If I put it on the open market, it more than
likely will be bought by the Cayuga Indians and as the things are now, taken off the tax
roles. I would love to see some kind of relief for a lot of people. Thank you.
Thank you, Bill. Anthony Rossi.
I'm here as a taxpayer. I live in the Manlius, New York, and my knowledge of the real
property tax laws is very limited, very basic, but of the four criteria used to determine
what tax rate you will pay in Onondaga County, I'm recommending right at the onset that
this Commission target as a top priority the function of the assessors office or the
assessor, especially in Onondaga County. Again, that's where my knowledge – it's
limited to Onondaga County. I believe in we all receive a uniform service in our state
and county taxes and I believe it should be – I recommend that it should be a uniform rate
for those services. I don't see the association between the full market value of any
property owners home and what they're capable or able to pay or what their discretionary
income is. There's no connection. I'm totally bewildered, confused by that. I also
believe that should be considered for school taxes with the only variable being the
district. I live in the Fayetteville-Manlius school district. I think we pay, like the last
gentleman, I pay very high taxes. I'm not here for myself. It's recommendation. I'm
doing fine. I'm very fortunate. I am retired, but we do well. I have three grandchildren
in the F-M school district. Again, I do believe a uniform rate for uniform service would
stimulate the real estate market which is soft now. It would stimulate the building trade.
People could make an addition to their home without this – all these unknowns. They
could increase the size of their home without moving and apply for a permit, have it
inspected without a taxable event. I think if the state were to collect any tax revenue
from the value of any real property, it should be at the closing, possible shared by the
seller and the buyer. It could be 1% of the selling price. I'm just throwing that out there
because I don't have statistics. I don't have numbers. I don't even know what the flat rate
would be, but that's it in a nutshell.
Thank you very much, Anthony. I appreciate it very much, and thank you for sticking
around so long. Okay, we have 16 minutes left and eight speakers. Phil Dann. Are you
Yes, my experience Started in 1993 with the system, and so watching what happened I
tried to find my way through the system both as a litigant in the court system challenging
selective reassessment, which I think Mr. Cordone mentioned, learning about the process.
My making a living background was in manufacturing along the I-90 corridor so I
brought my coin, my little icon, silver coin minted around 1898, so our real wealth now
has deteriorated to sliver of this along the I-90 corridor; the real wealth generator for this
state. I submit that we should reduce the ambiguity of upstate and downstate. I would
prefer us to say, "Northern tier, the I-90 corridor and the southern tier, and begin saying
that downstate really happens south of Albany, for example. Because of those rural
community experiences that I've had both in Monroe County, Cayuga County and
Steuben County plus travel in between, I've seen what happens of this coin here. This is
our golden dollar coin. I've seen the social capital and I've seen the real capital, the real
money disappear. It's taken wings. It's gone. So two things happen, we're not generating
the coin, the silver, through my experience, which is manufacturing, from Albany south –
I just get the impression it's more of a transaction driven, taking a percentage of whatever
so the real generating wealth has disappeared. over the past 50 or 100 years. That's my
opening statement. Now I'm just going to go ahead.
So your opening statement was two minutes. You said you were going to be two
Was that it?
Okay, shifting taxes state – state doesn't have a mint. They're not going to be able to
print this. We need the manufacturing back. Selective reassessment, I mentioned that,
what other funding models are possible, how can we motivate taxpayers to become
involved, how many people are using the New York State retirement and title system -
entitlement system starting tier 1, tier 2, actuarial, where could I find out about that? I'm
a 100% behind the Circuit Breaker. What defines middle class, 'cause we throw this
around all the time. What laws need to be – what laws, amendments need to be repealed
since, let's Start with the Taylor law, maybe 1978. Lastly, what action items, including
today and to date result from this Commission? Now I know some of these are
rhetorical, but those are my questions.
We'll have a report that comes out on May 22 making recommendations regarding all
these different issues of cap, Circuit Breakers, mandate relief and other things like that.
Thank you, Phil Dann, from [inaudible], looking for how was this Commission and
results and action items going to be any different than past Commissions and hearings?
The big difference is that the Governor's actually behind this. That's a big that Governor
Paterson is paying attention to the property tax problem. That really matters.
Thank you, sir.
Thank you. Okay, Dick Berry, homeowner.
Thank you for giving me the opportunity. I live in the town of Van Buren and I got my
little notice the other day went from $100,000.00 to $120,500.00.
How much do you think it's really worth?
How much do you really think its worth?
In the neighborhood of $115,000.00, down. When I get through with this program I can
do it all at one time. I checked through the sale of two houses and they were the
Nehemiah program. We're in a 100% assessment. This is a gift program, and it's a joke.
Eighty percent – or 35% of the people that use this program go under because their
insured by HUD. I've talked to 15 people in HUD. In fact, one thought I was a tribe
member of someplace out in Nehemiah – this company that's created this problem. So at
100% assessment, she just went the street and that was it $95,000.00, $100,000.00,
$120,000.00 just because of these two sales. I left her the appraisal [inaudible] seller.
There's the appraisal. It shows the gift, the guy gives a gift and in 90% of the cases often
the seller just raises the price to cover the contribution. This artificially raises the
purchase price. The problem is that the contract price is now higher than the recent close
sales and it's important [inaudible] listing. The appraisal value could then be less than the
contract price. I'm experienced in real estate. I work for the state for 22 years,
transportation, in the real estate department.
Dick, I have to ask you a favor. I understand you've got an individual problem with your
I can't give you much more time to talk about this.
That's all right.
I want you instead – it's good that you stayed and you came though, you could talk to this
guy, and he could help direct you to the right people.
I appreciate you being here. I'm sorry I can't give you more time.
Assessment keeps going up, and we're going out.
I totally understand the problem. John Carroll, affiliation: none. I wish –
I'm one of those guys that you like.
The regular guys.
And I appreciate the levity that you put forth after sitting here two and a half hours. You
really need some of that levity.
Thank you, John.
I can't take the time that I really need to devote to this. I come here with no title, other
than a homeowner and a taxpayer. The things that I have to say are not going to say are
not going to be music to your ears. I just want to tell you a couple points about myself
and then move quickly into the three points that you put on Syracuse.com that you asked
us to address or some editor put it on there, and I thought, "Well, okay." Myself – I spent
my formative years here in Cortland County, just below you, one of the poorest counties
in this state so I know where we're being really hurt on taxes. Now, I spent four years in
the Navy, then went on to a career, back to school to a career. Came back here after all
of that time for compassionate reasons and then found out what a tax burden I had to pay.
I'm not going to spend time with all the percentages, but I can tell you that with
relationship to the county/town taxes compared to the school there's a great, great divide.
Forty five percent – in eight years we had a 45% increase in town, county and city taxes;
that type of thing, but school taxes went up 86%. That's over 10% per year. You asked
us to tell you what I thought was the things that we could – what you need to look at.
First of all, I see duplication of services, which are terrible. We need to get that done an
accomplished. There's far, far too much. When I was a student here, we had one
Supervisor - one Superintendent for the whole county. We now have seven; all of them
being paid over a $100,000.00 a year. That's a dreadful situation. We need to get
consolidation. I think the thing that I would say is that we need to have a freeze on
assessments. Now, the homeowner has to earn that freeze and people said earlier had to
be there five years. Let's do that. Must be five years in their property. Future
homeowners will be taxed on whatever it sold for. I came from the State of Michigan
when I returned. In the State of Michigan they had a plan where they froze all
assessments, the Governor, John Engler at that time, went and put on a new tax on sales,
but we only went from 4 to 6%. Tough to go in New York State. In any event, it went
from four to six, and it made a dramatic difference in our taxes and it didn't hurt the
schools whatsoever. My kids were educated there. Finally, I think it's stacked against
the taxpayers. It's hard for us to get a fair shack in the school systems or in Albany, and
I'll tell you why. I think that it has a lot to do with the lobbyists. I'm going to make a
quote from the Bible here. It is impossible for homeowners to get a fair shake when
those in Albany are heavily influenced by lobbyists or themselves lobbyists. In the Bible,
Jesus Christ admonished the money changers and merchants within the temple area
saying, "My House shall be a House of prayer, but your making it a den of thieves." If
you truly wish to start and level the playing field by giving the taxpayer a fair shake; you
need to be ban the lobbyists from the halls of the Albany. Take them out. Then you can
go ahead and move with a taxing system, I think, and equitably do something about the
school system. But as long as you have the lobbyists there against us, it's going to be
tough to give us a fair shake. Once again, thank you for your time and the levity you've
put forth, sir.
John, there's actually a lot of accuracy to what you're saying. Never going to happen, but
it's actually pretty accurate. Okay, Bob Cargl, is it? Is it Bob Cargl? Bob C-A-R-G-L?
Well we're going to thank Bob for not being here because we're running out of time.
Fred Wheeler? Jim Cofal? Bill Bader? Oh, yes. Joan Johnson? How about Jane Palla?
Come on, both of you come up here. Come on up. Sit right next to her.
Okay, I'm also a neighbor of Mr. Hecht here. I own property in the same township and
most likely, if things continue –
You're in the same township as who?
And I have to agree with him that if things continue to be as they are going right now,
that the Cayuga Indians will have my property in a few years instead of my children and
my grandchildren. My issues is a little different. I hope that the members of the panel
will take into consideration when you issue your report that seasonal and second home
property owners should also have some help with their taxes. Owners of seasonal
property or second homes do not qualify for any kind of property tax relief now,
including STAR, veteran or senior exemptions. Most seasonal property assessments are
much higher than other residential assessments because of their location on New York's
lakes, rivers and ocean shores and the Adirondacks, the Catskills and the many other
scenic areas New York offers to its residents and tourists. Many seasonal properties have
been in families for generations. Now many of us have been forced to sell because we
cannot afford the taxes. Seasonal residents have no say in local and school board
elections. They do not add children to the local school district. They do not impact local
social service agencies. My "inherited seasonal home" is on a private road, so no town
services are provided for repairs or snow removal. There is public water, sewers, fire
protection and a library that I pay additional special district taxes for, and for which I am
appreciative. Local communities in these areas have been also impacted by the ever
increasing assessments. Many of the sales indicate people from other areas with more
resources are buying out the locals who can no longer afford the taxes. This results in
significant changes in the demographics of any given community. When appealing this
assessment several years back, the assessor told me, "Well if you can't afford it, you must
sell it." Attached is a chart depicting my property taxes from January 1994 when I
inherited the property through January of 2008. It may be difficult to understand because
I have been forced to sell half of 600 foot waterfront in order to pay the taxes. The
enclosed picture will show the seasonal home is not extravagant, but a 60-year-old, 1,500
square foot house. Property taxes since 1994 through January 2008 have amounted to
$140,463.00, and in the meantime I have sold half the lakefront to pay these taxes.
Thank you very much.
Thank you, Joan. Jane Palla?
I'd like to point out it took you two hours to figure out that you had not heard anything
you didn't already know. My property tax is the primary source of revenue for the
county, town, villages, cities, school districts and libraries. Neither the federal
government, nor the state government should have anything to do with deciding the
criteria for exemptions. These decisions should be made at the local level. Number one:
State buildings should not be exempt from property taxes. They should pay just like
everybody else. Number two: Nearly every county in the state imposes a sales tax.
There's is no reason to have the state to also impose a sales tax and redistribute the money
to the localities. The state should repeal the sales tax and let each county set up their own
rules and collections of this tax. Three: states that have online, home-based schools save
billions of dollars on renovations and millions of dollars on transportation. The public
schools have had over a decade to develop such programs and have failed to do so. The
private sector has achieved this task, and these 21st century educational programs should
be made available to the students of New York State. Number four: Eliminate the
Universal Preschool program. Studies have shown that this early education programs
produce aggressive behavior. The states pays now, but we will pay later when these
juvenile delinquents end up in the justice system. Number five: Cut the minimum wage
for teenagers. No 16 year old needs to make $7.15 an hour. Our Parks and Recreation
Departments have hired temporary summer workers and an increase in the minimum
wage falls squarely on the backs of the property taxpayers. Number six: When the state
retirement system came up short, our school districts and towns had to raise our property
tax to cover the shortfall. Our county opted to raise our sales tax by one percentage
point. While manufacturing jobs are disappearing, government jobs are increasing. Soon
there will be not enough private sector jobs to support all these government employees.
Start reducing the number of civil service employees and you can begin with abolishing
the New York State Thruway Authority, and then the Canal Corps and NYSERDA and
just keep going down the line and I'll tell you when to stop. In the North Syracuse school
district, we used to vote on our public libraries at the same time we did our school
budget. The Salina Library still votes on separate machines at the time of our school
budget, but the Cicero and North Syracuse Libraries were combined to form the Northern
Onondaga Public Library and have a separate voting date. We could save the duplication
of costs of the separate vote by having a [inaudible] on the ballot the same night as the
school district. My Assemblyman, Michael Bragman, was the one who initiated this and
I'm assuming that he had to have state legislation in order to get that through. So
whatever it needs to undo that so we can vote on the same day would be nice. And
number eight: Medicaid is a federal program. Our county legislators did not initiate it,
nor should they have to wrestle with how to pay for it. The state should assume these
costs. Thank you.
Jane, thank you very much, and thank you for staying all this time. Okay, we're going to
wrap it up with Dan Lowengard who is the Superintendent of Schools, and then there's a
gentleman here who wants one minute after words, and I'll let the crowd decide after
Lowengard goes if he gets to go for one minute.
Thank you, I've never had the last word, ever, and I still won't. I'm Dan Lowengard,
Superintendent of the Syracuse schools, but I also was in Utica, and that was an
independent school district and a dependent one. I must say, that we've tried a number of
things to fix this. We've tried voting, and we thought that would control it. We've tried
contingency caps, and we thought that would control it. The STAR and we thought that
would be it. It's interesting that we're talking about a cap on revenues and not a cap on
We are talking about eliminating mandates.
Well I think the mandates are a stalking horse, sort of, because I think it becomes popular
to say mandates, but which mandates and most of them actually are things that people
would do any way, but that's another speech and I don't have that time.
What do you mean by that, Dan? Which mandate would you –
I think that when we say mandates – unfunded mandates, there are probably hundreds of
those and as you go through and look at those I think you first have to decide if it's
worthwhile, and then you have to decide whether it should be paid for and how much it's
Shirley Strum Kenny
What about Wicks law? Does it affect your school district?
Shirley Strum Kenny
Wicks law, does that affect your school district?
Oh my gosh, I don't know what that is.
The Wicks law.
Oh, the Wicks law, yeah. We, personally think that if the Wicks law wasn't there we'd
still do it. That we believe, again, trying to have as many people employed and operating
that our school district would probably end up doing it anyhow because we want in
smaller packages than that. From my point of view, I think some of this talk about
unfunded mandates is unfair and that we ought to talk about which ones and how much
they actually cost. That really –
Tell us some that you'd like to change. Let's us know.
I will give you list, but I think where we're missing the boat is we're not talking about our
big expenses are cap in salaries. Would we have the courage to cap salaries of
administrators or teachers? Would we cap benefits and say you can only spend
$12,000.00 for a family policy. Would you cap our pensions because some of my
colleagues in Tennessee, where it's cheaper, they say, "Yeah, you know why it's cheaper,
Dan, is because no one gets a pension over 50%. No one get a salary over $70,000.00."
So while we talk one end, New York does pay a high in pension, high in salary so have
the courage then to say, "That's where we going to go after, not the revenue, the
expenditures," and I don't think we're there. I would say it's all based on everyone paying
their fair share, and the reality is everyone isn't there. There are a lot of people that don't
have to pay taxes. Fair share is what you all debate. We've entered a time where no one
wants to pay anything, and I think that's what you're up against. One of the ways to get
past this is absolutely move off of property tax to income tax. Nobody pays property
they pay income. If you take a Long Island house that they bought for $500,000.00, and
sometime can get for $1.5 million, how can you compare – sell it for $1.5 million? How
can you compare that to a Syracuse home that this guy was saying, "I'm paying
$1,000.00." My guess is his home value will never grow to pay that tax money back.
Property inherently will not work. It will never work so we have to shift income. My
final comment is today's paper was very informative. On the front page it had listed all
the school districts, how much money they got and what the percent increase was. This
happens in every community, all across the state. No one once says, "Well how much
money per pupil, and what was the increase per pupil, and what's the wealth per pupil?"
Until you talk that way, it just gets people – they said, "Syracuse got $23 million." Well
how many students do we have? Another community got a 15% increase. What was
their cost that they started with, and how much is it per pupil? I would challenge the
Commission, no matter what happens is to make sure we release three figures every time
we do this. What's the aid per pupil, what's the increase per pupil and what's the wealth
behind each kid in that community? Because only when you have those three numbers,
can you adequately talk about what's fair share that people ought to pay. Thank you for
sticking me in.
Thank you, Mr. Superintendent. Okay, sir, tell us who you are. Should we give him a
minute or not? All in favor of giving him a minute raise your hand. All those opposed.
I promise I'll be the last one.
My name is Dick Gladu. I'm on the Town Council in [inaudible]. I'm also one of the co-
founders of the Tri-county Committee for Tax Relief with John Whiteley, and I've had
the pleasure of working with him over the last four years. I attended your meeting in
Colony. I also attended the one at Plattsburgh, and I'm very happy to be here and I thank
you for the work that you're doing. In order to boil it down to one minute I have
submitted a report and you'll be getting that. Look, you've heard the horror stories. The
horror stories are in. They're pretty clear. You've got tons of data. Maybe you need a
little bit more, but more data is not the solution. What really is required, okay, is a bunch
of targeted action plans and I know that's part of your activity. We got to stop [inaudible]
before the mandates. That's one place to start right now. Are we going to stop defunding
the ones that we've already put in place? We got to take the, what I call the Letterman list
of the Top 10 reasons why and start putting some meat behind them and identify each of
the 10 – okay, here's the percent, okay, that the state is contributing. Here's the percent
that's handling through property tax, and here's a plan that migrates gradually, over time
to a more acceptable solution. In my opinion, that would be full state funding.
Obviously the work on shared or sub-contract services is must and that's, again, done on
one-by-one basis. Give us the Circuit Breaker. We need it. You've heard from a lot of
people. What started three or four years ago, has now gained a lot of momentum. We
need it. It is self-policing. There's enough left over after the 70% payment, if you
happen to be over the 6% that you will pay attention to the school funding issues and you
can deal with those. One comment to the assessors that spoke. The Circuit Breaker is
handled within existing processes. You don't have to invent anything. It's there. Also,
just as a point of trivia. Fifty four percent of our town is owned by the state that pays
10% of the taxes. With $4.00 gas and $4.00 milk and wheat going up by 50% and
$300.00 for a cord of wood the middle class is now the lower class. We've got to get
serious. Our seniors are hurting. Everybody is hurting, and we're all at risk and thank
you plugging me in.
We appreciate you sticking it out. I want to make special reference to Mr. Whiteley
who's actually come to every meeting that we've had here. I don't even know Mrs.
Whiteley's first name. I don't know either of the Whiteley's first names. Is it John
And what's Mrs. Whiteley's name?
What is it?
Can we arrange for a plaque or something for the Whiteley's – coming to every meeting.
They've traveled to every place we've been. Thank you very much everybody. We're
very grateful for you taking the time to spend with us. Thank you.
[End of Audio]