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McMahon: Cuomo's inflated statistic feeds phony tax cut

Gov. Andrew Cuomo is joined by local officials

Gov. Andrew Cuomo is joined by local officials to talk about a property tax freeze at the Capitol on Monday, March 17, 2014 in Albany. Credit: Albany Times Union / Lori Van Buren

Why are New York's property taxes so high? Gov. Andrew M. Cuomo claims it is "because we have 10,500 local governments."

"Every morning you wake up and you're turning on 10,500 light switches, you're starting 10,500 fleets of cars, you're paying 10,500 insurance policies," he says.

That would be pretty alarming -- if it were true. In fact, according to the Census Bureau, New York has 3,453 local governments, a little less than one-third the governor's number. Relative to population, that's not especially large by national standards.

Based on the Census data, there is no obvious correlation between the number of local governments and the level of local taxes. Some low-tax states, like Oklahoma and New Hampshire, have many more governments per 1,000 residents than we do. Some of our high-tax rivals, such as New Jersey, have many fewer local governments.

So where does Cuomo get his inflated statistic from? He's counting 6,900 town-only special districts that exist purely as lines on a map, set up to ensure that everyone in town doesn't get billed for a service or facility that benefits only a particular neighborhood or hamlet.

Itemized on a property tax bill, those district charges can be perplexing to property owners who may not be aware that they exist. But the vast majority of town special districts in New York -- for example, the 12 park districts in Oyster Bay -- don't have separate payrolls or taxing authority, much less light switches, fleets of cars or insurance policies.

All the same, the issue strikes a nerve -- especially on Long Island, with its 370 local government entities, from the county level on down. Nassau, in particular, has a large concentration of commissioner-governed special districts whose expenditures have been questioned in county and state audits.

Yet for all the complaining about high property taxes, Long Islanders rarely seem to care enough to do anything about it. So far, they haven't begun to exploit the power Cuomo gave them three years ago, under the 2 percent property tax cap law, to draw a hard line on rising school taxes, which are the biggest part of the bill.

Cuomo's relentless stress on those "10,500 local governments" conveniently distracts attention from what's really driving our high property taxes: state mandates, especially those dictating public-sector collective bargaining rules. For example, even at the depths of the recession, efforts by school districts to hold down their staff costs and minimize layoffs were thwarted by the state Triborough Amendment, which guarantees automatic annual "step" increases in pay even after a contract has expired.

Cuomo has made it clear he won't go near Triborough or other mandates. Instead, he's pushing a convoluted and temporary property tax "freeze" that would target state rebates to homeowners living in jurisdictions that stay under the tax cap and develop plans to merge or share services.

But the proposed rebates would be relatively small. Cuomo claims they would lead to a 3 percent reduction in local government spending -- a desirable goal that would, nonetheless, leave New York property taxes thousands of dollars higher than the levels paid by homeowners in most other states. Paradoxically, the governor's proposal to follow up on temporary property tax rebates with a permanent, income-based state tax credit for many homeowners will only tend to make them more tolerant of high taxes in the long run.

The governor can use any numbers he wants, but he can't change the facts. New York's property taxes are high because local governments are expensive -- and Albany is content to let them stay that way.

E.J. McMahon is president of the Empire Center for Public Policy.