EDITORIAL: New York finally getting serious about tax caps

We give up.

It would be nice to think that New York's elected officials solemnly deliberated to give us only the government we can afford. It would be lovely if our public-school spending, already the nation's highest, would rise only at the rate of inflation.

But by now it's clear that those things aren't going to happen by themselves. Taxing and spending in New York are out of control, the state lurches from one budget crisis to another, and local property levies have taxpayers up in arms. This is not just the angry outcry of penny-pinching fiscal conservatives; even many Democrats, often more favorably disposed to expansive government, agree that the time for a reckoning is at hand.

That's why New York needs to put a legal lid on the growth of state spending and local property taxes. Constraints on both should be considered together, since adopting either without the other could allow whichever level of government wasn't constrained to pick up the spending slack. Without some cap on the growth of government, New York will remain locked in a destructive cycle of ever-rising taxes that will drive out employers, innovation and middle-class taxpayers. To achieve truly robust economic growth, we must rein in public spending.

A consensus is already emerging. Brookhaven, Long Island's largest town in land area, has measures on the ballot this fall to limit taxes, spending and debt. On the state level, meanwhile, Gov. David A. Paterson has proposed a property tax cap, and the Democratic gubernatorial nominee, Andrew Cuomo, advocates a cap to limit state spending growth to the rate of inflation. He also wants a cap on property taxes; details aside, annual increases would be held to the rate of inflation, with a ceiling of 2 percent. Republican Carl Paladino, who has vowed to slash state spending, proposes a 2 percent property tax cap.

That New York's elected leaders should need such legal constraints is an admission of defeat for anyone who believes in the power of rational government. But New York is not alone in this. Overspending is a malady to which governments are no less susceptible than individuals, and democracies around the world today find themselves beset by deficits. The electorate is as much to blame as the elected, since voters have tended to reward politicians who say yes rather than no.

Caps can help - and at least a dozen other states have adopted them for property taxes. In New York, the governor and legislature could impose a cap simply by enacting a law - one that would keep increases at or below inflation and still leave local officials to decide how funds should be spent. Under pressure from voters this year, most Long Island towns are reducing or holding property taxes flat, but school levies account for the lion's share, and over the years these have been rising at two to three times the rate of inflation.

The governor and legislature could adopt a law imposing spending constraints on themselves - but, in the absence of a constitutional amendment, could brush them aside just as easily. Passing such an amendment - which would need approval by two consecutive legislatures and the voters - would take years and seems unlikely.

But there is nothing to stop gubernatorial candidates from pledging to veto any spending increase beyond, say, the rate of inflation. Absent a change in the constitution, a public vow and a clear law together might prove sufficiently binding to slow the growth of state spending.

If we do adopt spending limits, we should do so with our eyes open. Spending and taxing caps are no panacea; unless well-crafted, they can be sidestepped or weakened. Yet an escape valve - ideally, a provision allowing override with voter approval - is indispensable. And while caps often succeed at their basic purpose - constraining taxes and spending - they sometimes do so at the cost of badly degraded schools and services. The devil, as usual, is in the details; a 30-year-old proposition in Massachusetts has mostly succeeded by limiting property taxes to 2.5 percent of a community's assessed value. But California's comparatively draconian Proposition 13, which limited property taxes more sharply, has contributed to overcrowded and underfunded schools.

Voters who approve caps should know that they are not likely buying the same level of services for less. There may be fewer school administrators and less waste in a post-cap regime, but there may be less of what we want from government as well. The aim of spending limits is to spur greater efficiency, but the risk is that they may also yield more potholes, shabbier parks, larger class sizes and a generally lower level of services.

Sadly, New York's politicians are now in the position of the obese dieter who finally admits he'll never lose weight on his own. Spending caps, like stomach stapling, can take the place of willpower. Both represent a kind of abdication, but only by someone who lost control long ago. hN