Reducing The Property Tax Burden

David J. Valesky

July 10, 2006

There is no doubt New Yorkers are overburdened with property taxes and that reform of this local tax is a top priority. In the coming months property owners who qualify for the STAR program and the Enhanced STAR program will receive rebate checks to help address their property tax burden. In Cayuga County, the average basic rebate will be $174, while the average Enhanced rebate will be $291.

The rebate plan, which will return more than $700 million to homeowners in 2006 and 2007 and $960 million each year thereafter, is the result of an agreement we reached late in the 2006 session, after our first attempt at a tax rebate was vetoed by the Governor.

While some have criticized this plan as an election year ploy, the more salient criticism is that this rebate is just a band aid solution for a much larger problem. While I support tax rebates and supported this legislation, I believe a better option than returning property tax dollars through rebates is to avoid increasing the tax in the first place.

What we really need to reduce property taxes once and for all is a comprehensive approach that discourages local property tax increases by eliminating unfunded mandates, improving the formula for state education aid and reforming Medicaid.

I have introduced legislation to ban unfunded mandates, which often force the hand of local government. I have also advocated for real reform of our school funding formula to reduce the tax burden in all districts and to improve education funding in urban and rural school districts alike.

Another important step to reduce property taxes involves the continued reform of the Medicaid system. Last year, the Legislature passed a cap on the local contribution to Medicaid -- a cap that I strongly supported. Because of this cap, several counties in Central New York were able to hold the line on property taxes. This was a welcome change after years of steady property tax increases.

We followed that reform this year by passing a measure to reign in the fraud, waste and abuse of Medicaid dollars. This will certainly help reduce unnecessary costs in the Medicaid system and that should translate into less pressure on property taxes.

There is no doubt that New York State property tax payers need all the help they can get. And while I supported this tax rebate, in the future we must find ways to reduce the property tax burden not just through rebates but through reductions.