Add §1527-a, amd §§2022 & 3602, Ed L; add §§431, 431-a & 906-a, amd §1573, RPT L; add §25, Gen Muni L; add
§99-ff, St Fin L
Relates to school property and real property taxes; establishes the blue ribbon commission on property tax reform; relates to state assistance for local real property reassessment, state assistance to assessing units within a school district, providing a fixed real property assessed value for residential real property owned by certain persons over the age of 65 and providing state reimbursement to municipalities for lost real property tax revenue; and relates to requiring the state to fund certain programs mandated for municipal corporations or school districts.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4397
SPONSOR: Brabenec TITLE OF BILL:
An act to amend the education law, the real property tax law, the gener-
al municipal law and the state finace law, in relation to school proper-
ty and real property taxes
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this legislation is to require the state to pay for new
or expanded state mandates, allow school districts to opt into a phased
in state takeover of their real property tax levy, and to freeze the
assessment and the tax rates for senior citizens over the age of 65.
SUMMARY OF PROVISIONS:
Section 1 of the bill adds a new section 1527-a to the education law to
prohibit any unfunded mandate, with certain exceptions, which creates a
net additional cost to any school district in excess of $10,000 or in an
annual aggregate net additional cost to all school districts exceeding
one million dollars.
Section 2 of the bill amends section 2022 of the education law and
Section 3 of the bill amends section 3602 of the education law to
provide school districts the right to enter into an optional system of
state funding for school district expenses, whereby the state would
assume one hundred percent of the residential real property tax levy, to
be phased in over a period of five years.
Section 4 of the bill adds a new section 431 to the real property tax
law to freeze school tax rates on residential real property owned and
occupied by individuals sixty-five years and older.
Section 5 of the bill adds a new section 431-a to the real property tax
law to freeze the assessment on residential real property owned and
occupied by individuals sixty-five years of age and older.
Section 6 of the bill adds anew section 901 to the real property tax
law, which requires the state to reimburse school districts for any lost
property tax revenue resulting from freezing the property tax levy or
assessment for senior citizens.
Section 7 of the bill provides state aid to municipalities when they
bring their assessments to one-hundred of fair market percent value.
Section 8 of the bill requires the state to fund all Mandates on all
municipalities, with certain exception.
Section 9 of the bill creates a blue ribbon commission on property tax
reform to examine the current property tax system and local education
financing system of the state.
Section 10 provides that the act will take effect April 1, 2017.
JUSTIFICATION:
Excessively high property taxes are a serious issue in the state of New
York. Indeed, New York has one of the highest average property tax rates
in the country, with only three states levying higher property taxes.
According to the independent nonpartisan Tax Foundation, the median U.S.
property tax is $1,917 per year. In New York State, the median property
tax is $3,755 per year, ninety six percent higher than the national
median. Furthermore. the median yearly property tax paid by New York
residents amounts to approximately five percent of total yearly income.
New York ranks as the 6th highest among the 50 states for property taxes
as a percentage of median income. Property taxes thus represent a
significant financial cost to persons across the state, and lowering
property taxes, or avoiding property taxes can result in substantial
savings.
These property taxes are felt at an even more significant level by the
state's senior citizens. Due to the reduced or fixed income levels,
property taxes for senior citizens represent a regressive tax; and thus
these taxes impact seniors disproportionately when compared to other
property owners. funding local school districts. This bill requires the
State to pay for any new or expanded state mandates, grants school
districts the option to have the State pick up the entire cost of the
local school tax levy, and caps property taxes for senior citizens, thus
providing an important step toward the reduction of the property tax
burden upon the tax payers of New York, especially those most vulnerable
to the tax.
PRIOR LEGISLATIVE HISTORY:
2017:A6436; referred to education
2018:A6436; referred to education
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
New York State would be required to pay for all new and expanded State
mandates, with certain enumerated exceptions. In addition, New York
State would be required to phase-in the payment of all real property tax
levies for school districts that opt into the state-funded program.
Finally, the State would pay school districts for any lost revenues
attributable to capping the tax rate and assessment for senior citizens.
EFFECTIVE DATE:
The bill would become effective on April 1, 2020.
