Paterson's new plan seeks cap on property taxes

ALBANY - In budget talks Tuesday, Gov. David A. Paterson unveiled a new proposal to cap yearly increases in property taxes from local governments, but not from school districts, which account for about 65 percent of bills.

Paterson admitted the relief to hard-pressed homeowners would be limited because taxes from counties, towns, villages, cities and special districts represent only about 40 percent of bills. But he said he hoped his plan might be acceptable to the Assembly, which so far has opposed a universal cap.

"I'm just trying to find a way to get anything capped in terms of local governments and people who have to pay taxes," the governor said.

Under his proposal, annual increases in property taxes by municipalities and taxing districts, excluding public schools, would be held to 120 percent of the inflation rate or 3 percent, whichever is lower. Governments receiving significantly less state aid in a given year would be exempted from the cap, according to a top administration source.

Paterson had been pushing a 4-percent tax cap affecting all governments, but it has gained little traction in the legislature because of opposition from the teachers' union.

Asked about the new cap, a spokesman for Assembly Speaker Sheldon Silver (D-Manhattan) declined to comment.

The State Senate has approved property-tax caps under both Republican and Democratic leadership. Austin Shafran, an aide to Democratic chief John Sampson of Brooklyn, said he "wants a fair and responsible budget that provides immediate and meaningful property-tax relief."

Silver is seeking to restore $419 million of the more than $1 billion in education aid cuts sought by Paterson.

Senate Minority Leader Dean Skelos (R-Rockville Centre) is holding out for caps on increases in property taxes and state spending.

Asked about the reaction his new cap received from legislative chiefs, Paterson said, "I'm not particularly optimistic about the way it went over."

On Long Island, Nassau Executive Edward Mangano was supportive, adding he hoped Albany would ban unfunded mandates on local governments and reduce Medicaid costs. Suffolk Executive Steve Levy said, "It is the ultimate cowardice for a state official to exempt the schools from the cap when that is where the biggest increases are coming from. It is pure capitulation to the unions."