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$500M in options for LI property taxes, report says

The Long Island Regional Planning Council cited $500 million in revenue options available to local governments to reduce property taxes.

Consultants for the report cited a 2017 study

Consultants for the report cited a 2017 study that showed Nassau was one of only nine U.S. counties where homeowners on average paid more than $10,000 in property taxes. Photo Credit: Kevin P. Coughlin

The Long Island Regional Planning Council on Tuesday detailed $500 million in revenue options local governments could use to reduce property taxes for Nassau and Suffolk homeowners, who pay among the highest taxes in the nation.

John Cameron, council chairman, said the report concentrates on revenue, but emphasized the options are aimed at reducing property taxes, not enabling extra spending.

“These are the alternatives,” said Cameron. “This is to provide a road map for policymakers going forward.”

The state’s 2012 property tax cap has slowed the growth of property taxes, according to the $120,000 study by PFM Consulting, which partnered with Hofstra University’s Center for Suburban Studies.

But the cap has not changed Long Island’s standing as a high-property tax region or reduced taxation’s negative impact on the economy, the report said.

The consultants cited a 2017 study that showed Nassau was one of only nine U.S. counties where homeowners on average paid more than $10,000 in property taxes. The average homeowner paid $11,232 in Nassau, and $9,333 in Suffolk.

The report also questioned whether the tax cap can continue to limit tax increases, given issues such as depletion of government and school reserve funds and changes in student enrollment and pension costs.

The consultants made no specific recommendations about options Nassau and Suffolk should pursue. They warned that many likely would require state decisions that may be politically difficult, creating opposition from some groups while pleasing others.

“There is no magic bullet,” said John Cape, PFM’s managing director.

The half-dozen alternative revenue streams include raising the 4.25 percent local sales tax to New York City’s 4.50 percent level. That could raise a total of $157 million, which could reduce reliance on local property taxes by 1.4 percent, the report said.

Raising the local sales tax to 5.25 percent would generate $629 million and could cut property taxes by 5.5 percent, the report said.

Imposing a sales tax on internet sales would bring in $92 million, the report said. The suggestion came as the U.S. Supreme Court Tuesday heard a challenge to a similar South Dakota law Tuesday.

Francesca Carlow, president of the Nassau Council of Chambers of Commerce, said “the brick and mortar retails are hit particularly hard. A fair system to internet sales taxes would level the playing field.”

But Paul Llobell, legislative chair of the Long Island Board of Realtors, expressed concern that the report could lead to new taxes without cuts in property taxes or expenditures.

“We need to control out expenses we have now, not look for additional revenues,” Llobell said.

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