Memo to:    Assembly Republican Commission on Alternatives to School Property Taxes

Subject:       Testimony on Alternatives to School Property Taxes

Good Evening:

My name is Richard Gladu.  I am a retired year round resident of Hague, New York, a member of the steering committee of the “ Tri-County Committee for Property Tax Relief, and a Member of the Hague Town Board.

I would like to thank the Commission for allowing me the opportunity to address this most critical issue of property taxes and its relationship to school funding reform on behalf of the “Tri County Committee for Property Tax Relief.”

I want to make it clear that I personally and we as a Committee feel that the proper funding of education is a far better investment than the funding associated in dealing with the lack of a good education.

The current school funding system, with its over dependence on property taxes, is seriously flawed and needs to be changed.

Property tax, as currently conceived, may represent the easiest way to raise dollars for school funding however, it has evolved into an out of control force that needs to be to be dealt with.

The inconsistencies in assessments from which property taxes are derived are significant and include:

1. The lack of a set of common assessment principles throughout the State.

2. The lack of any meaningful relationship between property assessment and the resultant taxes, to the wealth or ability for the individual to pay.

3. The laundry list of property tax exemptions that exist. 

4. The negotiated deals on residential and commercial property values.

5. The selective caps on year to year growth in assessments. (e.g. NYC )

6. Legislation giving property tax breaks for a variety of reasons.

In addition, a large number of highly taxed properties are owned by people who have no rights to vote on issues reflected in property taxes or in the use of the revenues derived from property taxes.

These all significantly question the credibility of property tax as an equitable way to fund our schools.

There is no relationship between property taxes and the individuals ability to pay. This is most evident is cases where long time residents - many either retired, or on fixed incomes, or in low paying jobs – have to make choices between paying for heat, paying for food, paying for medical, paying for property taxes or even selling their home.

This demand driven market within the Adirondacks is creating inflated market values, unrealistically setting the bar too high, and is changing the character of our towns from year round residential communities into seasonal communities.

The main driver is the perceived value of their home as reflected in their assessments. In these cases, not only do the resultant taxes force our long time and year round residents out, but they also prevent the influx of new year round residents into the community. Fundamental services of fire and ambulance in these communities, which are highly depend upon volunteers, are in serious jeopardy.

The State must evolve to full funding for a sound basic education, gradually migrating from the high dependency on property taxes.

Property taxes, with limits based upon an individual’s income and ability to pay, coupled with an assessment process which recognizes the wide swings in market value, with certain additional accommodations for time in primary residence, and retirement status would be a stabilizing factor during a transition phase to full state funding.  

Immediate relief is needed for residents and local businesses. This can be addressed by freezing assessed values and defining an assessment process that allows these limited sales to be integrated over a 5 year period while additional funding options are studied and implemented. Unfunded State and Federal mandates should be rejected or put on hold as well during this period.

This is a zero sum game and the solution to any tax shortfall requires the exploration of a broad range of options.

The key is going to be a reassessment of funding priorities and sources within the budget.

Some suggestions include:  

1. Limiting / reducing the cost of government overhead, services, grants, pork at all levels.     

2. Earmarking a larger percentage of lottery revenues for education

· (Example: only 33% of the lottery revenues go to education, 57% prizes and the rest is overhead.).

3. Limiting the number of property tax exemptions, a list that is currently too long to mention.

4. Removing some of the constraints resulting from both the Wicks and Taylor laws.

5. Establishing a “personal benefits tax” on health care benefits to be used for education.

6. Increasing the marginal tax rates over $ 250,000.

7. Establishing a windfall tax on properties sold for more than their current assessed value.

8. Immediately adding the property sales value to the current tax role

9. Creating a master plan for school district consolidation.

10. Pushing for cooperative services amongst towns and districts.

11. Establishing state limits on school district pension funding contributions, health care contributions, and yearly salary increases.

12. Continuing the focus on factors driving Medicaid cost. 

While the task of reform is quite formidable one, it is a task that must be taken on. Only with a strong sense of dedication and focus coupled with “out of the box thinking” will reform take place. There does exist a sense of urgency that requires immediate attention. It starts with an immediate freeze on property assessments. We need this tourniquet to prevent the exodus of our current residential population.

I thank you for this opportunity, and we are available to help in any way possible.

Richard G. Gladu (rgladu@nycap.rr.com)

10 Bobkat Lane

Hague, New York-12836