News from Association of Towns of NYS

For more information contact: Jeff Haber, Executive Director (518)465-7933

Report Debunks Myths Why Property Taxes Are So High In New York

ALBANY, NY (08/19/2008; 0800)(readMedia)-- A 42-page report entitled, "Government Efficiency: The Case for Local Control," commissioned by the Association of Towns, debunks the popular myths that large, regional governments are more accountable to taxpayers and deliver services at a lower cost. The bottom line: bigger regional government is not better, and is often more expensive.

In fact, there is a strong association between smaller units of local government and greater government efficiency in New York.

Local governments also give taxpayers more input on decisions that affect their lives, and greater access to public officials.

Executive Director Jeff Haber noted "The founders of our nation recognized that the backbone of a strong United States was dependent upon the active participation of its citizens in their government. Not only are larger more regional governments more expensive and less efficient, as this report shows, but they make citizen participation more difficult; regionalism will very likely result in less participation and more apathy, thus eroding our local democracy."

The report was prepared for the Association of Towns by Wendell Cox of Demographia, Inc., of St. Louis Missouri. Mr. Cox is an expert in demographics, urban policy and land use.

Cox researched the reasons why New York has the highest combined per-capita state and local taxes in the nation. He also examined government consolidations that have occurred elsewhere in the U.S. and around the world.

The source of New York's competitiveness problem is not the number and size of local government, but spending, Cox concluded. Virtually all of the difference between New York and the national average of state and local spending can be attributed to four functions --- personnel expense, primary and secondary education, social services (public welfare) and general government debt.

Personnel Expense: New York State has the second highest government wages and salaries per capita, trailing only Alaska. Compensation per employee in New York is at least 44 percent higher than the average in the other 49 states, and 48 percent higher than the average in the other nine largest states.

Primary and Secondary Education: New York State has the second highest primary and secondary education expenditures per pupil, trailing only New Jersey. New York's education expenditures per pupil are 61 percent higher than the average of the other 49 states, and 64 percent higher than the average of the other nine largest states.

Social Services: New York has the highest social service expenditures per capita of any state. Social service spending per capita in New York is 83 percent higher than the average of the other 49 states. Among the 10 largest states, New York's social service expenditures are 95 percent higher than the other nine largest states.

General Government Debt: New York has the third highest per capita general government debt (state and local combined) of any state, and is 92 percent higher than the average of the other 49 states. New York State has the highest general government debt per capita among the 10 largest states, and is 88 percent higher than the average of the other nine largest states.

These four categories account for nearly all of the difference in per capita spending between New York and the average of the other 49 states.

New York's population growth, economic growth, migration and public finance trends are matters of serious concern. Although New York's competitiveness problem is serious, it is not rooted in the number, structure, or size of the local governments in New York State. Accordingly, the problem will not be solved by consolidating local governments into larger regional entities.

"The prevalent view that multiple local governments are less efficient is valid only in the minds of those who haven't looked at the facts," noted Wendell Cox. "In New York the data clearly shows that smaller governments that are closer to the people --- the towns and villages --- are far more efficient (less costly) than larger regional governments. Proposals to consolidate governments may sound good but would actually be a disservice to taxpayers," observed Cox.

The Association of Towns commissioned the report in response to the creation of the Local Government Commission on Efficiency and Competitiveness by former Gov. Eliot Spitzer. The primary objective of the Commission was to explore the merger, consolidation and regionalism of local government and local government services.

"It is our hope that the State's decision-makers will recognize that New York's smaller governments, for the most part, are better positioned to provide essential services to their residents with the greatest efficiency," Haber said.

Copies of the report, which include an executive summary, can be obtained at www.nytowns.org or be requested by contacting the Association at (518) 465-7933.

Founded 75 years ago, the Association of Towns provides training, advocacy and technical assistance to its member towns in New York.

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