Tax Groups Thank Governor for Promise to Appoint Tax Reform and Fairness Commission by the End of the Month
Strongly Urge Inclusion of Local Property Taxes
ALBANY, NY (10/19/2012)(readMedia)-- Members of the Omnibus Consortium (a coalition of property tax reform organizations from across NYS) thanked Governor Cuomo for announcing he would appoint a Tax Reform and Fairness Commission by the end of the month.
After the December 2011 tax law changes were enacted and during his State of the State address, the Governor stated that he would issue an Executive Order to create a Tax Reform and Fairness Commission to develop recommendations for making New York's current tax structure "simpler and fairer for all taxpayers." The Governor said the Commission would examine sales, income and corporate taxes.
Many tax reform groups are concerned that the Commission, as outlined by the Governor, will not include property taxes and instead only focus on state taxes.
"We are very excited that the Governor is following through on his promise to create this desperately needed Commission," said Ron Deutsch of New Yorkers for Fiscal Fairness. "We have an upside down tax structure in this state where working families pay a larger portion of their income in state and local taxes than do the states wealthiest residents. We strongly urge the Governor to make sure that property taxes are included under the purview of the Commission and that it further examine the entire state/local fiscal relationship."
Frank Mauro of the Fiscal Policy Institute stated, "Since one of the issues that the new tax study commission is being asked to focus on is tax fairness, it is essential that this commission assess the progressivity of the overall state-local tax system on which New York relies for the funding of essential public services. It is not informative to look only at the progressivity of a part of that system."
"It would be unreasonable for a state commission on 'Tax Reform and Fairness' to deal only with state-level taxes and ignore the local property tax", stated John Whiteley of the NYS Property Tax Reform Coalition. "It is New York State's high local taxes -- not its state taxes -- that mainly account for its frequent #1 ranking in state and local taxes combined. Furthermore, state taxation and fiscal policies are a major reason local property taxes -- a particular burden to the middle class -- are so high," Whiteley continued. "Not only does this happen indirectly, for example, through unfunded state mandates and aid cutbacks, but over the past three years Albany has added directly to the local property tax burden by eliminating 40% of the STAR program without using any of the $2 Billion savings to fund a badly needed middle class circuit breaker as recommended by the NYS Property Tax Relief Commission over four years ago."
The property tax is the #1 enemy of middle class NYS and no part of this tax works right and nothing about it is fair. It is inextricably intertwined with every other tax as a funding source for public services but the only one that has to compensate for state cuts. It has become a "dumping ground" for dubious education mandates which the state creates but doesn't fund," stated Gioia Shebar, coordinator of TaxNightmare.org.
Shebar further stated, "So how could any state commission that purports to be about taxes ignore the existence of the biggest tax elephant in the room. The property tax is running amok and trampling over farms, homes, and small businesses. Sure, nobody wants to tackle a tax this big and this nasty; but if you're going to have a commission about tax code reform you can't pretend the property tax-arguably the most problematic tax of all- doesn't exist. Not and get away with it.
The groups urged that any Commission the Governor creates through an Executive Order should:
• be comprised of economists/tax experts and affected parties
• include all state and local taxes
• hold at least 10-15 hearings at geographically diverse regions around the state
• Live streaming of all Commission hearings
• allow for testimony to be submitted electronically and be publically available on the Commission's website
• not have set or preordained outcomes (such as "revenue neutrality")
• consult with additional outside experts as needed
• develop a thoughtful, deliberative plan to make the tax system fair and equitable for all state residents
The commission should have as its goal a tax system that provides sustainability, appropriateness, and equity. For guidance, the commission should use the Principles of a High-Quality State Revenue System as prepared by the National Conference of State Legislatures as of June 2007. A high-quality revenue system:
(1) Comprises elements that are complementary, including the finances of both state and local governments.
(2) Produces revenue in a reliable manner. Reliability involves stability, certainty, and sufficiency.
(3) Relies on a balanced variety of revenue sources.
(4) Treats individuals equitably. Minimum requirements of an equitable system are that it imposes similar tax burdens on people in similar circumstances, it minimizes regressivity, and it minimizes taxes on low-income individuals.
(5) Facilitates taxpayer compliance. It is easy to understand and minimizes compliance costs.
(6) Promotes fair, efficient, and effective administration. It is as simple as possible to administer, raises revenue efficiently, is administered professionally, and is applied uniformly.
(7) Is responsive to interstate and international economic competition.
(8) Minimizes its involvement in spending decisions and makes any such involvement explicit.
(9) Is accountable to taxpayers.