Make the cap permanent
As anyone who has ever made a New Year’s resolution knows, discipline is not an easy thing, whether it’s about keeping in shape, quitting smoking, perfecting a skill, or sticking to a budget. And so it is with New York’s property tax cap.
Gov. Andrew Cuomo wants to make the cap permanent as part of the state budget that’s due Sunday. As challenging as the tax cap has been, and will continue to be, it’s the right thing to do.
The cap is actually a ceiling on the annual increase in tax levies, the total bill that property taxpayers in a municipality, a county, or a school district collectively pay. The cap is set at 2 percent annually, or an inflationary amount determined by the Consumer Price Index, whichever is lower.
Importantly, the cap can be overridden by a supermajority of citizens in the case of school budgets or of local governing bodies in the case of municipal tax levies. Breaking fiscal discipline should require a high hurdle.
It’s worth noting that in most years, staying within the tax cap should not have been an onerous resolution to keep. Since New York created the cap in 2011, inf lation has averaged 1.78 percent. In fewer than half those years, inflation exceeded the cap — it reached 3.2 percent in 2011, and 2.1 percent in 2012 and 2017.
It is admittedly burdensome. Even when inf lation is low, increases in bigticket items like employee benefits, heating fuel, or snow removal can throw local budgets out of whack, as we’re seeing right now in the Mohonasen Central School District, which faces an $850,000 budget hole for this year and a $2 million shortfall the next. The district is talking about larger class sizes and substantial program and staff cuts. Whether exceeding the cap in order to cushion some of the blow is a better solution will take a conversation among school officials and the community — as it should.
The governor makes the argument that all this fiscal discipline saved the typical taxpayer $3,200 over the first six years of the cap — $25 billion in all. That’s nice, but just saving money is not the most compelling argument.
The essential rationale, rather, is this: Governments and taxpayers both have to live within their means. That may be a debatable term, but it’s fair to say that when taxes keep rising faster than people’s paychecks, as they often did before the cap, governments and schools are living beyond their means.
That hurts taxpayers, and it breeds resentment that ultimately harms governments and schools. It leads to school budget defeats and opens the door to unqualified politicians who get elected on simplistic promises to cut taxes and end up doing more harm than good once they’re in office, and in over their heads.
New York could, of course, continue its past practice of extending the tax cap every four years. Making it permanent doesn’t really set it in stone; most any law can be repealed. But making it permanent would be a statement — that fiscal discipline is not some tenuous quadrennial New Year’s resolution, but a serious, long-term deal with New Yorkers.