What's the problem: NY State has highest property taxes in the U.S.
New York’s real property taxes remain the highest in the nation with an average residential bill of $5,040. Property tax is the largest tax in the State, amounting to $51 billion per year collected; in comparison, the State collects about $40 billion per year for personal income tax. This is a heavy burden on both New York residents and businesses.
By total dollars paid, 3 out of the 4 counties with the highest property taxes in the nation are in New York:
1. Westchester: $9,945
2. Nassau: $9,289
4. Rockland: $8,861
By percentage of home value, 13 of the 15 counties with the highest property taxes in the nation are in New York – many in Upstate New York.
What's the problem: 10,500 local governments
The property tax freeze will not only deliver much needed relief to New York homeowners, but also provide an opportunity to fundamentally address the structural cause of high property taxes: the proliferation and expense of local governments. New York State has 10,500 local government entities. Not just counties, cities, towns, and school districts. We have thousands of drainage districts, refuse and garbage districts, lighting districts – each its individual, overlapping taxing entity. This is the root of the problem of our high property taxes: the fact that New York taxpayers pick up the tab for turning on the light switches for 10,500 local government every single day.
What's the solution? Governor Cuomo's plan to cut property taxes
Thanks to responsible fiscal management in state government over the past three years, New York has gone from a $10 billion deficit to an expected $2 billion surplus. Governor Cuomo’s budget plan for this year builds on previous successes that include enacting the state’s first property tax cap and achieving the lowest middle class income tax rate in 60 years. His proposed balanced, bipartisan package of tax relief measures will help grow the economy and provide much needed relief to overburdened property taxpayers. This tax cut proposal is based on recommendations from the Governor’s bi-partisan tax relief commission which was co-chaired by former Governor George Pataki and former State Comptroller Carl McCall.
Property Tax Freeze
The Executive Budget provides a 2-year property tax freeze to residents in local taxing jurisdictions that agree to abide by the property tax cap in the first year. In the second year, the local taxing jurisdiction must remain within the cap and must submit a shared services plan with neighboring local governments that achieves savings equal to 1% of the combined tax levy in year one, 2% in year two and 3% by year three of implementation.
The freeze will generate $1 billion in tax relief for residential property taxpayers. For example, on Long Island, almost 700,000 homeowners will save an average of $565 by the second year of the freeze, saving $394 million for Long Island taxpayers.
Residential Real Property Personal Income Tax Credit (Circuit Breaker)
The Executive Budget creates a refundable tax credit against the personal income tax to provide targeted real property tax relief based on an individual homeowner’s ability to pay, also known as the circuit breaker. This relief program is progressively structured to provide a greater proportion of benefits to those with the highest property tax burdens as a share of their income. When fully phased in, the program, valued at almost $1 billion, will benefit over 2 million homeowners yielding an average benefit of $500.
On Long Island, approximately 367,700 households will qualify for an average real property personal income tax credit of $755. Of the $1 billion in savings that will result from the circuit breaker, $278 million will accrue to residents of Long Island.
Learn more about tax reforms in the 2014 Executive Budget.
The plan is based on the bipartisan NY State Tax Relief Commission. Members include:
- George Pataki, former Governor of New York State
- H. Carl McCall, Chairman of the SUNY Board of Trustees
- Dall Forsythe, former New York State Budget Director
- Jim Wetzler, Director, Deloite Tax LLP and former New York State Tax Commissioner
- Heather Briccetti, President & CEO of New York State Business Council
- Bill Rudin, CEO and Vice Chairman of Rudin Management Company and Chairman of the Association for a Better New York
- Jack Quinn, President of Erie Community College