New York’s Property-Tax Cap: Pitting Homeowners against Children

A New York State commission established by Governor Eliot Spitzer recently recommended ways to lower property taxes, which are putting a world of hurt on homeowners. Fair enough. Some of the commission’s recommendations, like a proposed “circuit breaker” that would limit property-tax burdens for lower-income homeowners, are well-considered approaches.

Unfortunately, there are some recommendations that are not as progressive minded, particularly the proposal to cap property taxes for schools. This proposal, if made law, would weigh heavily on the backs of public schools.

According to The New York Times:

“Under the commission’s preliminary proposal, counties, towns and school districts would be allowed to raise property taxes by 120 percent of the consumer price index or 4 percent each year, whichever is lower. Breaking the cap would require approval by at least 55 percent of the voters in a given district. And those districts that increased spending by less than the cap would be allowed to use a portion of the difference in future years.”

This is a bad idea.

It handicaps school systems that are already struggling to introduce quality education and life opportunities into the average classroom. The cap could lead to dramatic and harmful suspensions of school services in the future and desperate attempts by communities and the state to make up budget gaps. As a New York Times editorial recently noted, “the proposal would not give any relief to property owners or even renters in urban areas of the state. Instead, if the state decides to pour more money into suddenly cash-starved nonurban school districts, the cap could well result in added burdens in the cities.”

The thinking and experience that spawned this tax cap is not hard to identify. There is a lot financial pain being felt by Americans these days, homeowners in particular. Moreover, there is a lot of pandering by politicians eager to appear as if they are looking out for the middle- class homeowner’s best interests.

Yet rather than addressing the root causes of this financial pain — stagnant wages, high fuel prices, predatory lending practices, and rising foreclosures — politicians are fond of raiding the tax system, a system that opponents view as an incursion into their personal space, rather than the price they pay for enjoying public amenities and infrastructure.

In the case of New York urban public schools — long seen as money-sucking pits overpopulated by mostly less worthy black, brown, and lower income children — there is perhaps no more popular whipping boy and symbol of bloated inefficiency. To put it in perspective, could you imagine the outcry if somehow an across-the-board fund-raising cap was suggested for all private schools?

In New York, high property taxes are real. The need to control school spending is real. But the tying together of the two issues is just real unfair.


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