The suggestion from Jackson Supervisor Alan Brown that Washington County put a local income tax in place to relieve pressure on property owners is not as red a herring as it seems.
Counties in New York cannot impose income taxes, so Brown’s suggestion, interpreted narrowly, has no practical value. But when he said income taxes are more equitable than property taxes, he’s right, and it’s an inequity that could and should be addressed in a statewide reform of the tax code.
Numerous public programs — such as schools, public defender services, food stamps, heating assistance and Medicaid — are funded jointly by the counties with the state and federal governments.
The state’s money comes from income taxes paid by New York residents, the counties’ from property taxes.
Counties complain, with justification, the state requires them to offer certain services without providing enough funding. These unfunded mandates burden local governments, which are forced to raise more money in property taxes to cover the extra cost.
Many state-mandated programs, such as educational services for children with disabilities, are worthwhile. The problem is with the unfair distribution of property taxes.
Property taxes are borne disproportionately by the elderly, who in many instances own their own homes but are living on low, fixed incomes. High tax bills can threaten them with the loss of longtime family homes. People with middle-class incomes may inherit family camps that, because of the inflation in lakeside property values, carry property taxes that make the camps too expensive to maintain.
Farmers also can have modest incomes but own lots of land on which they must pay taxes.
State and local governments have addressed these inequities with partial and insufficient measures, such as the awarding of STAR tax breaks and designation of agricultural districts. Reform that is more comprehensive is needed.
The value of an individual’s house and land is an inaccurate measure of personal wealth. Some people with high incomes choose to live in modest homes, and because of that, pay less than their fair share of the cost of local services.
If local services were funded through income taxes, however, low-income taxpayers who own their own homes would have to pay less while high-income taxpayers would pay more.
Mr. Brown is not breaking new ground in identifying a problem with the way public services are funded in New York. The New York State Property Tax Reform Coalition has been advocating for years for a circuit-breaker bill to bring tax relief to property owners.
One of the coalition’s founders and its current legislative affairs officer is John Whiteley, who lives in Ticonderoga and is a thoughtful, articulate advocate. The state’s tax cap was a positive step, Mr. Whiteley said, but also a less substantive reform than a circuit breaker.
A circuit breaker limits the percentage of household income one taxpayer will have to pay in property taxes. Mr. Whiteley’s coalition presents an elegant explanation of the proposal on its website, www.nyspropertytaxreform.org.
Shifting the local tax burden from property to income taxes would require an enormous political effort and reorganization of the tax collection and distribution system. But putting a circuit breaker in place is a much smaller and more doable undertaking.
Mr. Brown’s frustration with the welfare system, because people not paying property taxes receive services including food stamps and free legal representation, led to his suggestion the county should institute an income tax.
If you qualify for free legal representation or food stamps, however, you would likely not be subject to an income tax.
Nonetheless, Mr. Brown’s comments point to a longstanding inequity in our system. The tax cap was a good start, but Governor Andrew Cuomo and the Legislature should not stop there. We need broader tax reform.
Local editorials represent the opinion of The Post-Star editorial board, which consists of Publisher Rick Emanuel, Editor Ken Tingley, Projects Editor Will Doolittle and citizen representative Mark Bergman.