Over the last few weeks, New York Governor-elect Andrew Cuomo has been pushing legislative and union leaders to support his proposal to cap local property tax increases at 2% per year. The New York Times has described the proposed cap as “tougher than the tax cap efforts in some other states,” and Governor Cuomo’s campaign literature has promised only “narrow, limited exemptions” to the cap.
A spokesman for the Governor-elect said that Cuomo will “move aggressively” to see that this “centerpiece” of his agenda is enacted. Similar caps have been sought by past Governors in New York, but the Times thinks that “Mr. Cuomo may be facing a more favorable political climate for a cap” than have his predecessors.
In addition to potentially gutting school districts’ most important revenue source, a cap of this sort will also solidify existing inequities between districts. As Frank Mauro of the Fiscal Policy Institute explains, "when you apply a percentage cap to change, you institutionalize the disparities and you make them worse." Moreover, for fixed-income home-owners and renters who are already facing unaffordable property taxes, capping increases does nothing to remedy the underlying problem.
Instead, as Mauro and others have pointed out many times, a significant enhancement to New York’s circuit-breaker program could assist those New Yorkers most affected by the property tax, without drastically reducing local revenues.