New York: Report Recommends Improvements to Proposed Circuit Breaker

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The New York Fiscal Policy Institute (FPI) released its twentieth annual budget briefing last week, including, among other things, a list of criticisms of Governor Paterson’s proposed property tax circuit breaker program.  This list serves as a useful checklist for good circuit breaker policy across the country.

Among the FPI’s criticisms of the Governor’s plan are that it:

- Excludes county and municipal property taxes, instead applying only to school property taxes;
- Attempts to provide some relief to a large group of taxpayers, rather than targeting meaningful benefits more toward households struggling to make ends meet;
- Excludes renters;
- Utilizes different income brackets for different regions of the state, thereby creating complications and inequities;
- Reduces the size of the tax credit for taxpayers in districts where the school tax levy has grown faster than inflation, while increasing it for those taxpayers whose levy has grown more slowly.

When property values inevitably rebound from the recent bursting of the housing bubble, property taxes will almost certainly become a hot button issue in the states once again.  Enacting a circuit breaker (or strengthening an existing one) is the best possible route for states to take when this occurs.  For more on circuit breakers, be sure to read ITEP’s policy brief.

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