Nixon opposes Cuomo’s 2% state spending, property tax caps

ALBANY — Working Families Party candidate for governor Cynthia Nixon opposes the state’s 2 percent cap on annual spending and the 2 percent cap on local property tax growth — two of Gov. Andrew M. Cuomo’s most popular accomplishments.

Her position is cheered by her liberal base — which plays an important role in a Democratic primary — because it has long sought more state and local funding for public schools and for progressive state programs.

However, the Cuomo administration projects that taxpayers have avoided paying billions of dollars in added taxes because of the cap, and polls have shown that the cap has received broad support in the past.

Some experts say Nixon is simply ahead of the curve by revealing a major funding problem that is eroding school performance and government services. Further, her call for a state takeover of far more of the cost of public schools may yet resonate with New Yorkers as they begin to feel the impact of cuts in staff and services to schools and local governments, experts said.

“I think that that 2 percent cap on state spending is disastrous and what it means is we shrink the budget year after year,” Nixon said at a recent news conference in Albany.

She also opposed the 2 percent cap on growth in some of the nation’s highest property taxes, while also saying taxpayers need relief.

“If a locality wants to raise taxes on its own to pay for education, I think you shouldn’t make that so onerous,” she said.

That wasn’t a popular view the last time opinions about the property tax cap — approved in 2012 — were polled.

Seventy-three percent of voters strongly or somewhat agreed with 2 percent cap on property taxes, according to a 2015 Siena College Research Institute poll. That law allows school district voters and government boards to exceed the cap, but only after making public votes to override.

Among the supporters of the property tax cap in the 2015 poll were 72 percent of Democrats and 65 percent of self-identified liberals. The sentiment was shared in all parts of the state, led by 77 percent of support on Long Island and in the northern suburbs of New York City.

“Nixon’s opposition to the property tax cap has functionally capped her ability to grow in the suburbs in the primary,” said Bruce Gyory, a political strategist who studies voter trends as an adjunct professor at the University at Albany. “If she were to get the nomination, Republicans would pulverize her . . . it will turn out to be a critical political blunder.”

Cuomo campaign spokeswoman Abbey Fashouer said the cap enacted in 2012 has saved the typical taxpayer, as of 2017, more than $2,100 in property taxes.

Fashouer said the average of annual school property tax growth from 2000 to 2010 was nearly 6 percent, more than inflation, before Cuomo with the Senate’s Republican majority pushed for the cap. She said in the first three years of the cap, the average annual school property tax increase has dropped from nearly 6 percent to 2.5 percent, or by more than 58 percent.

To help compensate for a cap on local property taxes, she said, Cuomo has increased the state’s share of school aid by nearly 4.5 percent a year. Cuomo and the State Legislature have also continued to subsidize local school tax levies with the state’s STAR program that reimburses taxpayers for part of their school tax bill, she said.

“The governor has made school funding fundamentally more progressive by shifting this burden away from local taxpayers and toward the more equitable state income tax,” Fashouer said. “These measures have saved New York taxpayers billions — all while increasing school funding by 35 percent to a record $27 billion this year.”

Economist Peter Morici of the University of Maryland said Nixon’s opposition “is a bad idea . . . very dangerous for New York State.”

“New York spending was so bloated,” said Morici, an Elmont native who studied at the University at Albany. “A decade of 2 percent growth per year is really just bringing it back down to the national norms.”

The nonpartisan Tax Foundation lists New York 49th among states for its high taxes, at the 49th spot for state income tax and the 47th spot for property taxes.

“There’s no doubt that the property tax cap has reduced the burden on the typical Long Island homeowner,” said Lawrence Levy, executive dean of Hofstra University’s National Center for Suburban Studies. “And since property taxes is consistently the most important issue to voters, the governor should benefit from this at the polls.”

Yet Levy said a study he released last week for the Long Island Regional Planning Council shows the caps may not be sustainable.

“The concern is whether schools and municipalities can continue to deliver services at the levels of spending necessary to stay under the cap and whether the poor school districts will have the hardest time,” Levy said. “But what may happen in the future is less compelling politically than what is happening now and in the majority of communities.”

Frank Mauro, former executive director of the labor-based Fiscal Policy Institute, said the layoffs and painful cuts seen at some school districts and local governments that Nixon cites were predictable under the caps.

“Last week there was a headline that a school district was cutting 13 positions, so in a time when the economy is supposed to be doing pretty well, that’s a pretty counterintuitive situation,” Mauro said. “I think the 2 percent property tax cap has very uneven impacts because . . . school districts that had a well-funded program could maybe live within the cap, but for a school that had to catch up, the 2 percent cap has become very problematic.”

Nixon hasn’t yet provided details of how she would replace Cuomo’s 2 percent caps on state spending and local property taxes. But she offered a broad goal.

“I think what I mean is we have a problem in this state in terms of how schools are funded and how much onus there is on property taxpayers from districts,” she said in that Albany news conference that called for state school aid in the state budget. “We need to not have it be based on property values, we need to show property owners some relief and we need to have the state fund it more equally and take over a bigger share of that and not be so crushingly dependent on the localities.”

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.