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Property tax cap proves elusive

TIMES STAFF WRITER
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Gov. Andrew M. Cuomo and lawmakers billed a property tax cap that would limit levy increases at 2 percent annually as a way to curb runaway increases that are forcing people out of their homes.


But in the town of Rutland, the cap might not mean anything at all, according to critics.


"I had hoped a property tax cap would do that, but it doesn't seem to have any teeth," said Michael Gillette, a member of the Town Council.


He's not talking about exemptions to the cap, or carryovers that give municipalities some breathing room on the issue, which some critics point to as possible loopholes.


The cap would, in his mind, be meaningless. Here's why: a governing body can override the cap with a 60 percent vote. And while that will give larger municipalities and public-vote school budgets an extra hurdle, the five-member Rutland Town Board can vote three out of five — the same margin it would have had to vote for tax increases even before the cap — for a 60 percent override.


Mr. Gillette represents one side to the ongoing debate about the property tax cap, as educators and local officials scramble to figure out what it all means. In his corner are those who say that it won't do enough. Others, including many on the left, argue that it is too restrictive, and it will harm education and local services.


And then there are those somewhere in the middle who argue that, while it's not perfect, nothing is.


North country legislators who voted to approve it generally find themselves in the last category.


State Sen. Joseph A. Griffo, for example, said that while an override wouldn't be mathematically different in places like Rutland, the cap would bring a new way of thinking to local town boards and residents.


"The public is going to know about it," he said. "If the public at large indicates that they don't want this, then the members of the board are going to be put in a difficult position. When they run the next time, I think they're going to be dealing with the public's judgment of that. That's the difference here."


A spokesman for state Sen. Patricia A. Ritchie, R-Heuvelton, made arguments along similar lines.


But, he added, he wishes Albany had done more to address some of the costly requirements that Albany imposes on municipalities.


"Mandate relief is important, and we began with a small step," Mr. Griffo said. "I think it should have been a more sizable step."


Other costs that won't count against levy increases include large legal settlements, increases in the tax base because of a municipality's growth, and pension increases — one of the major cost-drivers for municipalities.


Those who pushed for the exemptions say it will provide flexibility, but some argue that it's too much of a good thing.


"When you look at the exemptions and exclusions and so forth in that property tax cap, it really isn't a cap the way the governor talked about it in his State of the State," said Assemblyman Kenneth D. Blankenbush, R- Black River.


Mr. Blankenbush supported the bill, arguing that it wasn't the best, but it was a positive step forward.


But there's still another side to the property tax equation: those who warn not of the tax cap's loopholes, but of its dire consequences.


Assemblywoman Addie J. Russell, D-Theresa, signaled the most concern of any north country lawmaker in describing her yes vote for the tax cap.


"I think it's yet to be seen what it's going to mean for north country," she said. "I'm quite concerned about what the effect of a 2 percent cap will be."


She's not alone. School district officials across the north country sounded notes of concern and confusion about its provisions. When contacted about whether the exemptions would give districts enough flexibility, many answers were: "I don't know." The exemptions to the cap are determined by a complicated formula with several steps and many sections and subsections of fresh, new state law.


"It certainly hampers our ability to raise the funds necessary to provide our educational programs as they exist today," said Ogdensburg City School District Assistant Superintendent David J. Valois.


Frank J. Mauro, the executive director for the left-leaning Fiscal Policy Institute, was well versed enough on the details to provide a more specific critique.


The cap's provisions, he said, are much stricter than those in Massachusetts, which has had a cap since the 1980s. For example, if a municipality decides to override its cap in Massachusetts, the new levy becomes the benchmark on deciding what's an increase in future years. Not so in New York, he said.


Mr. Mauro's group has advocated for a plan that would give homeowners who earn less than $100,000 annually and pay more than 9 percent of their incomes for their homes an income-tax refund, though opponents have rejected the tax increase that would be necessary to pay for the program.


"While this cap can have a negative effect on the quality of education and municipal services, it also doesn't provide enough relief to the people who are overburdened," Mr. Mauro said.


Johnson Newspapers writer Benny Fairchild contributed to this story.

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