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Party Times
Ron Deutsch
Executive Director
New Yorkers for Fiscal Fairness
December 14, 2010
Where we
are
today . . .
We must lower the heavy tax burden that
prevents businesses from investing in facilities
and payrolls and instead forces them to
consider relocating to tax‐friendly states like
South Dakota or Texas. Repealing job‐killing tax
increases will unleash our employers to hire
new workers. We must lower the tax burden for
all individuals and job creators.
‐‐Scott Walker
Incoming Governor, Wisconsin
At a time when America is facing
economic crisis, Congress should be
looking for ways to stimulate our
economy through sound,
responsible economic development
policies.
Allowing these tax rates to increase
will only hurt our ailing economy by
taking more money out of our families’
wallets.
-- Excerpted from “Extend tax cuts to
all Americans”
Rep. Phil Roe
Recent Polls tells us that Americans…
• … distrust government.
• … think it’s too big and doing too many
things.
• … don’t see how it benefits their lives (even
when it has)
• …believe state government could spend
less and still provide the same level of
services.
But,….. they (still) …..
..... are split on whether they
prefer more
services/higher taxes.
….believe programs are important.
And, they are worried about
consequences…
And, they are willing to pay more
taxes to maintain funding for public
schools and health and human
services.
(Source: Pew, Oct 2010)
Most recent Sienna Poll found:
The Government Reform Knot:
were all tied up!
Government/Economy/Taxes/Budget
NYS Revenues and Expenditures
Where Does the Money Come From
and Where Does It Go?
Taxes in NYS:
Inequities in our Tax Structure
From Fiscal Policy Institute Report:
Current Personal Income Tax Rate Structure - with
temporary top rates (joint filers): 2009-2011
–4% on income under $16K
–4.5% on income between $16K and $22K
–5.25% on income between $22K and $26K
–5.9% on income between $26K and $40K
–6.85% on income between $40K and $300K
–7.85% on income between $300K and $500K
–8.97% on income over $500K
For example, State aid is LESS THAN 43% of the total
$46 billion dollar education budget.
Federal
6.13%
S hare of R ev enues
State Aid
35.96%
S tate
Aid
S TAR
Local
L ocal
50.94%
STAR
6.96%
Source: Fiscal Profiles 2005-06, New York State Education Department
F ederal
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New York ranks 31st among the 50 states in terms of the state’s
share of funding for public elementary and secondary
education.
100.00%
90.00%
80.00%
70.00%
60.00%
47.0%
50.00%
43.9%
40.00%
30.00%
20.00%
10.00%
o
ew de I
H slan
am d
ps
M hire
ar
Co yla
n
n
N nec d
or
t
th icu
Pe Da t
nn ko
sy ta
lv
an
ia
Te
xa
So Ill s
ut ino
h
D is
a
N kota
eb
ra
sk
a
N
Rh
k
Y
or
es
N
ew
at
St
d
te
ni
U
H
aw
V aii
er
m
A ont
r
k
N
ew ans
M as
M exic
in o
ne
D sota
e
W law
as ar
hi e
n
M gto
W ich n
es
t V igan
irg
in
N ia
ev
ad
a
0.00%
Source: US Census Bureau, Public Education Finances, April 2007, Table 1; Ranking by Fiscal Policy Institute
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66
School tax levies are not alone in driving the property taxes
higher. Since 2000, tax levies have grown for all taxing
jurisdictions, not just school districts.
Percent Growth in Real Property Tax Levy
35%
33%
33%
30%
30%
25%
20%
15%
9%
10%
11%
4%
5%
0%
1995 to 2000
Counties
Other Jurisdictions including Special Districts
Source: OSC, Overlapping Real Property Tax Rates.
2000 to 2005
School tax levy minus STAR
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For many upstate counties, school taxes
represent less than half of total property taxes.
PUTNAM
SARATOGA
SUFFOLK
ORANGE
DUTCHESS
ALBANY
ULSTER
WARREN
ONTARIO
ROCKLAND
NASSAU
COLUMBIA
CLINTON
OTSEGO
GENESEE
STATEWIDE TOTAL
GREENE
WESTCHESTER
NEW YORK CITY
RENSSELAER
71%
71%
64%
63%
63%
63%
61%
61%
61%
60%
60%
57%
57%
57%
57%
56%
56%
55%
55%
54%
SULLIVAN
TOMPKINS
MONROE
ONONDAGA
BROOME
ONEIDA
WAYNE
LIVINGSTON
ORLEANS
MADISON
ESSEX
SENECA
DELAWARE
SCHENECTADY
SCHOHARIE
HAMILTON
NIAGARA
WASHINGTON
CHEMUNG
TIOGA
Source: OSC, Overlapping Real Property Tax Rates.
School tax levies (excluding STAR) as a percent of total levies: 2005
54%
54%
54%
53%
53%
52%
52%
51%
51%
51%
51%
50%
50%
50%
49%
48%
48%
48%
48%
48%
WYOMING
OSWEGO
HERKIMER
CAYUGA
ERIE
STEUBEN
YATES
CHAUTAUQUA
ST. LAWRENCE
FRANKLIN
SCHUYLER
CHENANGO
JEFFERSON
MONTGOMERY
LEWIS
CATTARAUGUS
CORTLAND
FULTON
ALLEGANY
48%
47%
47%
46%
46%
46%
45%
44%
44%
44%
42%
42%
41%
41%
40%
39%
39%
37%
37%
68
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New York is one of the few states that asks local governments to
pay a share of Medicaid costs. The property tax "burden" related
to Medicaid spending varies greatly across counties and the
Medicaid cap institutionalizes these disparities.
Tax Rate Per $1000 of Taxable Full Value Necessary to Cover Local Share of Medicaid Costs, excluding New York City at $9.78 per $1000.
$5
$4
$3
$2
$1
$0
Hamilton
Putnam
Suffolk
Nassau
Westchester
Dutchess
Essex
Warren
Saratoga
Rockland
Delaware
Tompkins
Columbia
Ontario
Greene
Orange
Wyoming
Yates
Ulster
Albany
Wayne
Otsego
Sullivan
Schoharie
Livingston
Madison
Herkimer
Tioga
Washington
Genesee
Seneca
Franklin
Lewis
Rensselaer
Schenectady
Cayuga
Niagara
Schuyler
Monroe
Jefferson
Onondaga
Broome
Steuben
Clinton
Erie
Orleans
Chautauqua
Cattaraugus
St. Lawrence
Oswego
Cortland
Chenango
Chemung
Allegany
Oneida
Fulton
Montgomery
Tax Rate per $1000 of Taxable Full Value
$6
Sources: 2003 Medicaid Expenditures from NYS Department of Health. 2003 Full value from Office of State Comptroller.
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Property tax issue in New York is complex and often
misunderstood.
• School taxes make up 60 percent of the levy “on average”
but in some counties other costs are driving increases.
• STAR Exemptions do not reduce school districts’ levies.
Rather they provide for the state to pay part of the levy.
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A NEW NY AGENDA?
Governor Cuomo’s Fiscal Policy Proposals:
The DRACUOMIAN Emergency Financial Plan
•Freeze Taxes. Andrew Cuomo says that he will not
raise and will veto any increase in personal or
corporate income taxes or sales tax.
•Impose a State Spending Cap. Enact a statutory and constitutional spending cap that
limits growth to the rate of inflation. Only in the event of extraordinary circumstances,
may the Governor, with the agreement of a two-thirds supermajority of both houses of
the Legislature, authorize spending in excess of the cap.
State Spending CAPS: A Bad Choice for NYS
Colorado is the birthplace of the State Spending Cap. In 1992, Colorado enacted a
Taxpayers Bill of Rights (TABOR), a constitutional amendment that limits the annual
growth in state revenues and expenditures. In recent years, anti-government groups
have pushed spending cap proposals like Colorado’s in numerous other states. These
proposals have gone under a variety of names, such as “Tax and Spending Control”
(Nevada) or “Stop Over Spending” (Michigan) and now the “State Spending Cap” in New
York. Unfortunately these types of caps can have very negative consequences.
•Colorado’s State Spending Cap contributed to a significant decline in public services in
Colorado. It resulted in:
•Colorado declined from 35th to 49th in the nation in K-12 spending;
•higher education funding dropped by 31 percent;
•Colorado fell to near the bottom of national rankings in providing children with full, ontime vaccinations; and
•the share of low-income children in the state who lacked health insurance doubled,
making Colorado the worst in the nation by this measure.
Impose a Property Tax Cap. The Governor is proposing a
cap on property taxes for all school districts and local
governments, set at the lower of the inflation rate or two
percent, whichever is lower, with a 60 percent majority vote
needed for an override.
Property tax caps have created havoc across the nation in
terms of funding local services. Instituting this type of cap
would be a particularly bad idea for NYS, especially at a
time when the state is looking to cut the state share of
spending going to school districts and municipalities.
The state is already paying less than the average national
share for school aid and continues to shortchange
municipalities by reducing local AIM (Aid and Incentive to
Municipalities) each year. To think we will be able to reduce
property tax burdens by simply imposing a cap is naïve and
reckless. It is a sound bite solution to a complex tax
problem that needs to be addressed based on need.
Tax caps WILL NOT lower anyone’s taxes
These are “caps” not cuts.
Tax caps WILL NOT ensure that residents’ taxes won’t go up more than a small amount each year
Tax caps will do nothing to prevent the property tax increases due to reassessments and tax cap overrides and
new fees for essential services which are common place in locales with tax caps.
Tax caps WILL NOT help anyone who can’t afford their current property taxes
People who are unable to pay their property taxes will have no tax burden relief for their current situation.
Tax caps WILL make the local revenue system more regressive
Tax caps can exacerbate disparities across the state leaving lower-income communities even worse off relative
to their higher-income counterparts.
Tax caps WILL NOT change the main drivers behind higher property taxes
Caps on property taxes do not change the rapidly rising costs facing localities Tax caps cannot slow the
increase in the cost of fuel, for example, which reflects forces outside of the control of local officials.
Tax caps WILL NOT change the demand or need for local services
While residents continue to need all the current local services they received prior to the initiation of tax caps in
many circumstances, these caps do not allow local governments to continue their current level of public
services, much less make any improvements demanded by residents. State aid to localities may be promised
to help localities but this promise is unlikely to be sustained over time, especially during economic downturns.
Tax caps WILL impair public safety
Tax caps greatly hinder localities’ ability to maintain the current level and quality of public safety by limiting the
local’s ability to pay for police and firefighters.
Tax caps WILL impair the quality of K-12 public education
Tax caps have shown to be the main agent in the deterioration of the public school systems in virtually every
state that has imposed these property caps.
Tax caps WILL lead to deteriorating streets and roads
Tax caps in locales across the country have resulted in poorly maintained and often times dangerous street and
road conditions.
TAX CAPS WILL NOT SOLVE THE PROBLEM OF HIGH PROPERTY TAXES
THEY WILL COMPROMISE THE QUALITY OF LIFE IN NYS
NYS Budget Timeline:
Important Dates and
Opportunities
Ron Deutsch, NYFF
www.abetterchoiceforny.org
January 2011
State of the State Address: On January 5, 2011, Governor Cuomo will give
the annual State of the State address. In this speech he will detail the policies
and programs that he would like to put in place to move the State forward.
Advocacy opportunity: For organizations working on the budget this is a
good time to weigh in on the Governor’s speech. It is a good time to put
together comments from your organization and get them to the LCA Press
reporters covering the Capital
(http://lcapressroom.blogspot.com/2007/01/press-room-directory.html).
Comments should relate to what the Governor was talking about in his speech
and should be directed to reporters covering the area of the state that you live
in.
It is also a month long opportunity to meet with the Governor’s Staff and
Division of Budget staff that will be crafting the budget. It is a time to make
your case as to why your policy issue/funding/proposals should be included in
the Executive Budget Proposal.
February 2011
Executive Budget Released: Since Andrew Cuomo is an
incoming Governor he has until February 1st to release his
Executive Budget (usually it is released in January on the second
Tuesday, following the first Wednesday, after the first Monday).
The Executive Budget will detail exactly how Cuomo plans to
close the $9+ billion budget gap the state will face for the coming
fiscal year. He will release both appropriations bills and language
bills with his executive budget proposal.
Advocacy Opportunity: This is another opportunity to weigh in
on the budget document itself. You can either contact LCA Press
members with Press Releases (more explanatory and detailed) or
Press Statements (statement from a notable figure with in your
organizations). If we have detailed information about something
objectionable in the budget it is a good time to hold a rally or
action to get some press attention to the topic or cause you care
about.
Legislative Budget Hearings: Very shortly after the release
of the Executive Budget, the Legislatures’ joint fiscal
committees (Assembly Ways and Means and Senate Finance)
will hold public hearings where the State Agency
Commissioners and the public will have an opportunity to
comment on the proposed cuts contained in the Executive
Budget Proposals.
Advocacy Opportunity: This is also a good time to get
members of your organization to testify at these hearings.
You need to register right away – as soon as they are
announced as speaking slots fill up quickly. If you are unable
to get a speaking time – this is also potentially a good time to
plan an action or rally outside of the hearings. There is
always a lot of press at the beginning of the hearings and then
it starts to wane toward the end.
March 2011
Revenue Forecast: Under State finance law, prior to March 1,
the Director of the Division of the Budget, the Secretary of the
Senate Finance Committee, and the Secretary of the Assembly
Ways and Means Committee must issue a joint report containing
a consensus forecast of the economy and estimates of receipts.
One House Budgets/Resolutions: Sometimes the Assembly
and Senate will either issue a complete one house budget (very
detailed) or a budget resolution (less detailed and more of an
outline). They do not always do this – but it is usually useful
because it identifies what the priorities of each house are.
Conference Committees: While Conference Committees are
supposed to occur as part of the budget process they do not
always happen. I believe that Governor Cuomo is going to ask
for conference committees and may in fact structure his
Executive Budget proposal to correspond to the Legislatures’
pre-established conference committee structure.
Advocacy Opportunity: March is a critical time
for advocacy. If the legislature is preparing one
house budgets/resolutions it is very important to try
and get your issue/policy/funding into their budget
proposals. If you are not in the Executive Budget
or the Legislature’s budget proposals it is very
difficult to become part of the final budget
(although nothing is impossible in Albany). March
is usually the busiest month at the Capital. It is the
time when our elected officials are cutting deals
and finalizing budget negotiations. It is the most
critical time to lobby/educate on your issues. You
need to build a critical mass of support to move
your policies issues forward.
April – Whenever?
April 1st: Start of New fiscal year – The final Budget is
supposed to be adopted by this date. If history is any
guide, it is usually not. During this time period budget
negotiations can be fast and furious. Often deals are
announced multiple times before a final deal is
reached.
Advocacy Opportunity: If the budget does not pass
on time then much of the advocacy described in the
March section is still in play. Nothing is done until
everything is done in Albany when it comes to budgets.
Important websites/numbers:
Division of Budget: www.budget.state.ny.us
Assembly: www.assembly.state.ny.us
Assembly switchboard: 518-455-4100
Senate: www.nysenate.gov
Senate Switchboard: 518-455-2800
Fiscal Policy Institute: www.fiscalpolicy.org
NYFF: www.abetterchoiceforny.org