A Property Tax Cap is Bad for You

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Let’s say it’s a year ago, and your municipality set your school budget. There’s a fleet of school buses, and gas inflation being what it is, they budget fuel at, oh, $3.25 a gallon. Just to be on the safe side. Now it’s June, and your fuel budget has been long since tapped out. What does your municipality do next year?

If Tom Suozzi’s Property Tax Commission has anything to say about it, next year, your kids can hitch hike to school and back.

Set up by then-Governor Spitzer in January, the Commission, led by Nassau County Executive Tom Suozzi, unveiled its report today on how to relieve beleagured taxpayers of the ever-growing property tax burden. Front and center: a cap.

A state commission said Monday the surest way to ease New York’s property tax burden is to cap at 4 percent the increase school districts can levy each year.

Specifically (because nothing in Albany is simple), the cap would:

Limit property tax levies, or the amount collected from property owners in a taxing district, to 4 percent per year or 120 of the Consumer Price Index, whichever is less. If the maximum levy wasn’t used, the difference could be “banked” and used in future years, though it could not increase the levy more than 1.5 percent from one year to the next.

So regardless of what’s happening in the world around us, Suozzi is adamant that the cap is the sine qua non of reform:

“The property tax cap is the first thing that must be done. Nothing else will happen unless you do the property tax cap,” said Suozzi.

Noting that New York’s property taxes are 79 percent above the national average, Suozzi said the need for a cap, preferably this year, became clear as he traveled the state gathering testimony.

“Real people are suffering in New York state. People are leaving the state. People are leaving their hometowns. Businesses are closing up,” he said.

Well, even if the Conestogas are heading west, what’s wrong with Suozzi’s picture?

The problem is closed-system thinking about an open system problem. His job: study how to fix the property tax burden. That’s his domain. Bad effects appear (people leaving their hometowns, businesses closing up)? Property taxes must be the cause.

No. they. are. not.

What Tom Suozzi describes is a society slowly approaching the conditions of a third world country. And, oh yes we are. Property taxes do not cause that. Laissez faire economics cause that.

Third world countries are great places to live, if you belong to the landed gentry. Government expects little of you, and if they get out of line, you can bump the leaders off and replace them. Governments that play ball with you — well their leaders do very well also, thank you very much. As a third world oligarch, you get to enjoy your wealth, and your only major expense is a “homeland security” apparatus to keep the peasants in line.

O.K. New York does not resemble that. Yet. But we do have a virtual flat tax on incomes over $20,000.00, and neither Tom Suozzi, Governor Paterson, nor the state legislature will deal with that fact. A flat tax is step one toward institutionalizing oligarchy.

Playing shell games with the property tax would be step two.

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