1. January 31, 2011
RE: AN ACT to amend the general municipal
law, the education law and the
municipal home rule law, in relation to
establishing limitations upon school
district and local government tax levies;
and to repeal certain provisions of the
education law relating thereto
S.2706 (Skelos)
Governor’s Program Bill #1
MEMORANDUM IN SUPPORT
Unshackle Upstate, a bi-partisan coalition of over 80 business and trade organizations
representing a growing group of 70,000 companies that employ more than 1.5 million people
supports the enactment of this legislation. The bill caps the growth of the real property tax
levies that may be imposed by local governments and school districts at 2% or 120% of the
inflation rate, whichever is lower.
Unshackle Upstate supports this effort to directly address the crushing property tax problem
faced by many New Yorkers.
New York State has the highest local taxes in America – 78% above the national average. High
property taxes are one of the primary reasons that suburban and Upstate residents say the state
has become unaffordable.
The property tax problem is particularly acute in the Upstate region, where the economy has
been stagnant, and in the suburban counties around New York City, where home values are
higher than elsewhere.
The need to address the problem of high property taxes is clear:
• the median property tax in New York State in 2009 was $3,755, nearly double the
national average;i

2. • property taxes rose 73% from 1998 through 2008, more than twice the rate of inflation
(which was 32% during that period);ii
• the suburban communities around New York City pay some of the highest property
taxes in the nation when measured in real dollars:
Top 10 Counties in Median Real Estate Taxes Paid, 2009
Median Real Estate Taxes
County State
Paid
Westchester New York $9,044
Nassau New York $8,940
Bergen New Jersey $8,708
Hunterdon New Jersey $8,671
Rockland New York $8,542
Essex New Jersey $8,245
Passaic New Jersey $7,939
Morris New Jersey $7,904
Union New Jersey $7,793
Somerset New Jersey $7,720
Upstate New York communities pay some of the highest property taxes rates in the nation when
measured against home values:
Top 10 Counties in Median Real Estate Taxes
Divided by Median Home Value, 2009
Median Real Estate Taxes as a %
County State
of Median Home Value
Monroe New York 2.89%
Niagara New York 2.87%
Wayne New York 2.78%
Chemung New York 2.61%
Chautauqua New York 2.61%
Erie New York 2.60%
Onondaga New York 2.50%
Camden New Jersey 2.50%
Steuben New York 2.49%
Madison New York 2.43%
This legislation will cap the growth of all property taxes, not just school property taxes. The fact
is that all local property taxes in New York have increased at a rate higher than the rate of
inflation:

3. Property tax rate growth in NYS
Fire districts
School
districts
Villages
Average rate of increase,
Towns
2002-2007
Cities
Counties
Inflation
0.0% 2.0% 4.0% 6.0% 8.0%
.
A Property Tax Circuit Breaker is Not the Answer
Proposals to address the property tax burden faced by New Yorkers are not new. New York Tax
Law § 606 provides a circuit breaker for individuals with an income ceiling of $18,000, and
maximum home and rent values of $85,000 and $450. Set in 1985 and unmodified since, New
York’s program is eroding and provides relief to fewer and fewer residents each year. In 2006,
for example, the median household income in New York was $51,384, the median home value
was $303,400, and median rent was $875. § 606 of the Tax Law demonstrates that a major
failure of a circuit breaker program is they shortly becomes ineffective.
A Property Tax Cap Will Not Undermine Public Schools
Massachusetts enacted “Proposition 2½” in 1980 in response to itsr high level of property
taxation, which was then among the highest in the nation. Proposition 2½ has stopped the out-
of-control property tax growth in Massachusetts. In the first 20 years following the passage of
Proposition 2½, the per capita residential property tax levy dropped 1.6 percent, after adjusting
for inflation. Since the enactment of Proposition 2½, Massachusetts dropped from 3rd nationally
to 33rd on the measure of state and local tax burden.
Massachusetts’ success in managing its property taxes has not undermined the state’s public
schools. Massachusetts’s experience suggests that New York, by adopting similar reforms, could
significantly restrain tax growth without hurting educational outcomes.
The Hidden Costs of High Property Taxes
The effects of New York’s real property tax burden on homeowners are well documented and
understood. What is far less understood is that New Yorkers are burdened by higher costs
overall because of real property taxes. A study by the Fiscal Policy Institute demonstrates that
the people of New York pay more for energy because of the State’s high tax burden.

4. The state’s electricity sector paid nearly $3.1 billion in property taxes for calendar year
2008. The corresponding figure in Texas for the same year was $1.018 billion, and for
California it was $786 million. The property tax disparity is actually getting worse. Ad
valorem assessments and taxes for California are expected to decline slightly in 2009
and remain flat or fall slightly in Texas, while the burden on New York’s industry
increased by $180 million last year. iii
New York Needs a Property Tax Cap
Unshackle Upstate prefers that there be no increases in property taxes, but we recognize that a
sensible, well-designed tax levy cap is the next best thing. A property tax “circuit breaker”
would not do anything to slow the growth of property taxes. Further, a circuit breaker would
only address some real property taxes, while consumers of electricity, and other goods and
services will continue to pay hidden property taxes in the form of higher costs.
For these reasons, Unshackle Upstate supports the enactment of this legislation.
4830-6576-1800, v. 2

5. i
The Tax Foundation Fiscal Facts #248, September 28, 2010 [http://taxfoundation.org/news/show/26742.html]
ii
Office of the State Comptroller, State of New York Financial Condition Report for Fiscal Year Ended March 31, 2009, @ 23.
[http://www.osc.state.ny.us/finance/finreports/fcr09.pdf]
iii
The Public Policy Institute of New York State Short Circuiting New York’s Recovery, 2010 [http://www.ppinys.org/reports/
2010/ShortCircuitingNewYorksRecovery.pdf]