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Guv proposes 4% yearly cap on school property taxes

BY JAMES T. MADORE | james.madore@newsday.com

1:19 PM EDT, June 3, 2008

ALBANY - Gov. David A. Paterson plans this week to send a bill to the legislature capping at 4 percent yearly increases in school property taxes but maintaining school budget votes, a key departure from recommendations made public Tuesday by a state commission studying tax relief.

Paterson called for quick action by lawmakers, saying soaring tax bills were driving homeowners and businesses from the state. He said he would consider calling a special session of the legislature if action wasn't taken by the end of the regular session on June 23.

Much of Paterson's proposed legislation mirror suggestions from the Commission on Property Tax Relief, led by Nassau County Executive Thomas Suozzi. In a 112-page report released Tuesday, the commission said a 4 percent cap was paramount and all other relief actions should come after its adoption.

"All of us understand that the cap is a blunt instrument, but it is needed to force hard choices and to address the fact that New York's local tax burden is the highest in the nation," Paterson said. "No matter what else happens, the choice of raising property taxes above a capped amount without voter approval is not an option Now is the time for the leadership of this state to act."

The commission suggested doing away with school budget votes for all districts except those wanting to exceed the tax limit. But Paterson said the votes should continue regardless of the change in tax levy.

His bill, along with the commission's report, would require districts wanting to exceed the cap to win approval from at least 55 percent of voters. And if a district received an increase in state aid of 5 percent or more and still wanted to override the 4 percent threshold, 60 percent of voters would have to agree.

Districts that don't exceed the cap and increase taxes by less than 4 percent per year would be able to "bank" the percentage between their levy and 4 percent for use in future years -- with limits.

Paterson's bill would not apply to schools in New York City, Buffalo, Rochester, Syracuse and Yonkers.

Suozzi said he was "thrilled" by Paterson's quick action and pledged to barnstorm the state to garner support. "He seems to get the issue and wants to do something about it," Suozzi said of the governor.