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As governor, can he cut local taxes?

Suozzi details how he would do it, but experts note that state execs hold little sway on issue

BY MICHAEL ROTHFELD | Newsday Staff Writer

April 12, 2006

New York state Attorney General Eliot Spitzer is seen after a fundraiser at the Glen Oaks Country Club in Old Westbury. (Newsday / Karen Wiles Stabile / February 15, 2006)

At every campaign stop in his run for governor, Nassau County Executive Thomas Suozzi tells audiences how he would cut the state's high property taxes.

But fiscal monitors and advocates noted yesterday that state executives have limited power to carry out such cuts, since local governments - not the governor - control property taxes.

Suozzi's "$5 Billion Taxpayer Savings Plan," unveiled Saturday, would not directly cut taxes - though that's not how he presented it yesterday to a New York City developers' group.

"I'll take half the money from the $5 billion that I've identified and invest it in reducing local taxes throughout the State of New York," Suozzi told the New York Building Congress in Manhattan.

Suozzi's plan would use $2.5 billion - half the amount he says he can slice out of the state budget - to increase aid to school districts outside New York City. That would then give districts the option to cut taxes.

Suozzi also said he would use another $2.5 billion a year to settle the New York City school funding lawsuit launched by Campaign for Fiscal Equity. "I believe that we should invest billions of dollars in the New York City school system," he said.

But state appellate judges have ordered the state to pay twice that much. Geri Palast, CFE's executive director, said she appreciates Suozzi's interest, but said his numbers don't add up. "While I'm happy that he's taking a look at a CFE solution, $2.5 billion a year is not sufficient to meet the court order," Palast said.

Suozzi's campaign manager, Kimberly Devlin, responded that "part of being a leader and a governor is finding compromises on complex, contentious issues."

Suozzi has repeatedly said New York's local taxes are 72 percent above the national average - based on a report by the nonprofit Citizens Budget Commission that used data from 2000. An updated report says New York taxes were 60 percent higher than the national average in 2002.

As county executive, Suozzi did not cut property taxes. After a 19.4 percent county property tax hike in his first budget in 2003, he used annual surpluses to build up county reserves and avoid further tax increases.

Increasing school aid could reduce the local tax burden - but not necessarily, said Elizabeth Lynam, deputy research director for the Citizens Budget Commission. "It gets partially sucked up by increased school spending," she said.

Efforts by Gov. George Pataki to tie state aid to curbing local spending have not been very effective, Lynam said.

David Ernst, a spokesman for the New York State School Boards Association, said he thought some school districts would use increased aid to cut taxes - while others would sink it into programs.