PROPERTY TAXES: THE UNFAIR SHARE

A debate that has dominated the American political scene for the past few years has been this premise that everyone should “pay their fair share”. So much attention has been trained on this matter at the national level (in the form of federal income tax) that most people have almost totally ignored the concept at the local level (in the form of property taxes) where it would carry even greater weight.

Think about these disconnects in fairness concerning local taxation:

In comparing properties of equal size, why should a childless couple pay as much as a family of four, when the family of four consumes far more in public services (especially public schooling)?

How is it just that municipalities and schools in Allegany County and the Adirondacks can reap revenues from what are basically absentee landowners living elsewhere (camp owners) who come to town just a few weekends and weeks a year and acquire almost no benefit from the taxes they’ve paid? Why should those non-resident property owners be excluded from having their say (a vote) in how their taxes are being used in the places where they are paying them?

In rural locales like Niagara County, why should farmers carry the highest portion of the revenue burden just because they happen to own vast tracks of land? It’s not as if they are receiving a proportionate amount of services.

Why should property owners pay so much for Medicaid (in most New York locales it’s 52 to 64 percent of the county tax) when it should be the obligation of the population as a whole to fund this forced benevolence deemed to be so necessary?

Why should senior citizens on fixed incomes who have been paying into the system their whole adult lives continue to pay high taxes for things they won’t use anymore, but once did and once paid for accordingly through taxation at that time?

Why should someone who loves his home and wants to make it better with a swimming pool, patio or an addition have to suffer the consequences at reassessment and end up paying more in taxes than someone who left his land idle?

Beyond those glaring displays of wrong, consider the very act of property taxation itself. You are led to believe – and even possess legal documents that show as much – that you own your property. You really don’t; ownership is only theoretical. It’s more accurately stated that you are renting the property from your local governments and school districts at a premium, because, if you didn’t pay your taxes it wouldn’t take long for that governing body to take that property from you --- even if the mortgage was fully paid-for! How is that fair?

This travesty carries special meaning in New York State, where property taxes are 70% above the national average. Across America people think of their property taxes in terms of hundreds of dollars; here, we think of them in thousands of dollars.

In Niagara County the average home of $95,800 has a property tax of $2,800, meaning that local homeowners pay over $1,200 more than their peers in other states with equally-assessed properties. New York’s cure for the problem was not to cut property taxes, but rather to still allow them to grow, but only at a supposedly-stunted rate (2 percent tax cap). That’s still a princely sum: After just 5 years of capped increases, the average homeowner will find herself paying $3,091, nearly $300 more than she had.

The extreme view would see property taxes abolished. We know that will never happen. But, a myriad of changes could be accomplished to mitigate the unfairness of property taxes in the Empire State. Just a few of those ideas discussed in this column over the past 10 years: replace the state’s Medicaid program with an HMO-driven voucher system (which would cut costs by a whopping 75 percent); utilize clawbacks on businesses that break their promises to IDAs; utilize assessment caps and adjust assessments to true market value (how in the world did assessments go up during the Great Recession?); and add another 1 to 1.5 percent on sales taxes across the state to use a fairer consumption-driven tax to decrease property owners’ contributions to Medicaid.

Those are all common sense measures that could cut back on some of the unfairness and high costs that are inherent to our property taxes. But, instead, it seems like the state legislature and Governor prefer to maintain an air of unfairness by adding more unfunded mandates and more enrollees to Medicaid over the past few years.    




From the 27 April 2015 Greater Niagara Newspapers