At a recent meeting of the Larchmont Mamaroneck Summit, New York State Senator George Latimer spoke about local property taxes.

Story submitted by Linnet Tse.

Short of legislative action, “the bottom line is we have to make a decision. If the property tax bill that we have now is unbearably high . . . what services are we willing to sacrifice or reduce to see that bill go down?” concluded NY State Senator George Latimer at the Local Summit’s meeting on September 17 at the Nautilus Diner in Mamaroneck.

Acknowledging that property taxes is the single biggest issue he hears about, Senator Latimer asserted that without a change in public policy, the only way to materially reduce the level of our property taxes is to reduce the level of services, public education included, that our communities have come to expect and value.

What is the role of state, county and local governments in our tax bill? Senator Latimer explained that our property taxes are comprised of three elements: 20% for the local municipalities (the villages and the Town of Mamaroneck), 25% for the County of Westchester and the remaining 55% for the schools.  At the local level, these taxes cover the cost of services such as the police, fire, curbside sanitation, recreation and snow removal. At the county level, where services may be less visible to residents on a daily basis, services include sewerage and transportation (e.g. Bee-Line bus, airport), but the bulk of the budget goes towards state-structured programs to benefit lower-income residents (health, home and community services). The largest portion of our property taxes funds K-12 public education, which, Senator Latimer pointed out, is “probably the most highly mandated entity, in terms of what the state requires.”

Why are our property taxes so high?  According to Senator Latimer, what many people don’t realize, is that Albany’s policies have shaped the way New York State’s property taxes look today.

• New York State has a larger system of services and programs than many other states.  One example is its very extensive mass transit system.  In fact, the NYC subway system has ten times the ridership of the second most used subway system – the D.C. Metro system. Senator Latimer noted that over time, jurisdictions made decisions to provide a certain level of services, each with a cost associated with it.
• Senator Latimer emphasized that the way in which New York State has structured funding for Medicaid – a program created in the 60’s to provide health care for the indigent and long-term health care for those who have used up their assets – has had a huge impact on the level of county taxes our property taxes must cover. The Medicaid program is funded 50-50 by the federal and state governments. Unique to New York State, half of the state’s share of Medicaid costs is charged to the counties. For Westchester County, this represents a $220 million bill, or 40% of the county budget. As Senator Latimer explained, if the state were to assume its share of the Medicaid bill, as all other states do, our county taxes would be 40% lower.
• As Senator Latimer continued to explain, the property tax issue is further complicated in New York State because a high percentage of the population (over 40%) resides in urban areas and is not affected by property tax issues the way we are. Thus, he maintains that “it is not a shock when state public policy leans in a direction that does not look at the problems of the property tax payer.”

What can we do about this?

Short of legislative action, Senator Latimer believes that the only way to materially reduce our property tax bill is to reduce or eliminate services. He argued that while “there is a perception that all we have to do is cut the fat out of government and our bills will do down, in reality, although there may be some fat, it is not significant enough to make a difference.” Further, while he understands that there is a role for consolidations, he claims that “it is not a silver bullet . . . not where the money is.”

So, how can this issue be addressed in Albany? Senator Latimer briefly outlined a three-pronged approach, one that he acknowledged will not be easy:

• Shift New York State’s cost structure – as discussed earlier, shifting the funding of Medicaid away from the counties would reduce the county budget by 40%
• Restructure New York State’s long-term obligation to its workforce – the increase in pension costs has been the single largest cost driver for school districts and municipalities in recent years, and per Senator Latimer, is unsustainable.
• Use income taxes to partially fund public education – Senator Latimer reasoned that a more progressive means of funding public schools is needed, because property-tax based schools will “lock in inequalities for life.”

In response to a question on the likelihood of making such legislative changes, Senator Latimer acknowledged the challenges. He stressed the importance of having grassroots support for the proposed changes and the need for elected officials to work together, across political and geographic lines, in order to improve the current property tax situation.

Next Steps

On Thursday, November 7, 7:00-9:00 p.m., the Larchmont-Mamaroneck League of Women Voters and The Larchmont/Mamaroneck Local Summit will host a forum focusing on mandate relief. Panelists, including NY State Senator George Latimer, will discuss proposed legislation aimed at addressing mandate-relief. Details will be available soon.