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New York Times: New York Ready for Prop 13-Style Property Tax Revolt?

2 min readBy: Joseph Bishop-Henchman

Peter Applebome of the New York Times recites some of the latest numbers on property taxes, which we reported on last week in our report “New Census Data on Property Taxes on Homeowners” and the related Map: Property Taxes on Owner-Occupied Housing by State:

[O]f the 10 counties with the highest real estate taxes as a percentage of home value, all 10 are in New York. Or, to try one more, of the states with the highest median real estate taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es overall, New Jersey is No. 1, Connecticut is No. 2 and New York is No. 4 (tax-averse New Hampshire, which does not have a general sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. or a personal income tax, sneaks in at No. 3).

It is amazing to me that a state with neither income nor sales taxes still has lower property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. es than New Jersey, Connecticut, and New York.

Dr. Richard Nathan, recently retired as co-director of the respected Rockefeller Institute of Government at SUNY Albany, suggests that a tax revolt is not a question of whether but when. And the Times piece suggests that it may already be under way in New Jersey.

I found this paragraph interesting:

The Nassau County executive, Thomas R. Suozzi, whose “Fix Albany” mantra got him nowhere when he ran for governor against Eliot Spitzer in 2006 but looks pretty smart in retrospect, says that property taxes are inseparable from dysfunction in state government. He cites several reasons why property taxes are so high: unreasonable state mandates piled on local governments; income tax dollars inequitably distributed back to local governments; far too many local governments – more than 10,500 in New York – that need to be consolidated or eliminated; fraud and waste; and economic stagnation producing no expansion in the property tax baseThe tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. . You could throw in crippling Medicaid costs and unsustainable pension costs.

Often our critics say that yes, states in the Northeast generally have high taxes but they also have good public services. Maybe we should do a user poll: are New York and New Jersey government services worth the high taxes?