NASSAU COUNTY CIVIC ASSOCIATION, INC. "The government is us, we are the government, you and I." Teddy Roosevelt

Are there any answers?

While there are many opinions as to why Nassau County residents pay the second highest property taxes in the nation, it seems that we can agree on one of the reasons, the growth of government. In an effort to figure out how to tackle the problem, former Governor Spitzer appointed two commissions to make recommendations; the New York State Commission on Local Government Efficiency and Competitiveness (LGEC) and the New York State Commission on Property Tax relief. The first commission has already issued its report which has been met with criticism from some of its own members due to the political will required to enact its recommendations. While these commissions often provide some valuable solutions, most recommendations are often ignored such as the 2004 report by the NYS Commission on Authority Reform.

The New York State Commission on Local Government Efficiency and Competitiveness (LGEC) issued several recommendations. As what is found in their name; efficiency, one of the recommendations involves consolidation of the sanitation districts by the three towns in Nassau County. This obviously makes sense in light of their current structure and the ability to easily integrate these districts under one agency for each town. One more challenging recommendation in terms of the political implications is creating a county wide fire service by merging fire districts, volunteer companies, and other incorporated entities that deliver fire services. As reported by Newsday in 2005, Long Island has more fire apparatus then New York City and Los Angles combined even though these combined agencies respond to 12 times more calls, protect six times more people and triple the amount of land. It would therefore make sense to go to a paid country wide fire service while eliminating two thirds of the fire houses and fire apparatus. The sale of the buildings and equipment would help fund the consolidation process as well as returning many of the properties to the tax rolls which would provide revenue to fund a paid force. This would also increase response time. As to consolidation of other special districts such as libraries and water districts, it would not be a viable solution based on several factors. The relative cost of library administration is reasonable with the exception of some districts that have financed large unnecessary expansions of their libraries. With  water districts, the cost to purchase their capital assets in order to consolidate would require incurring excessive and costly debt thus defeating the very reason to consolidate. This leads to the next major reason for the excessive level of taxation, public debt from the state's 860 public authorities and their subsidiaries.   

New York Stare's constitution requires that any long term debt be approved by the voters, however in an effort to circumvent the constitutional requirement, the state of New York established public authorities. These entities are quasi governmental agencies that can raise their own debt by establishing their own borrowing mechanisms. While there is some limited oversight by The Public Authorities Control Board (PACB), the board is responsible for granting approval for project-related financing for only eleven statewide authorities. The remaining authorities and their subsidiaries are managed by numerous appointed boards. While these boards are required to submit financial reports to the Governor, legislature and Comptroller, virtually no oversight exists. This is validated by their huge debt burden, $129 billion dollars. This compares to the current state budget which is $122 billion. The Citizen's Budget Commission reported that New York’s total debt reached an estimated $230 billion in borrowing by state and local government.

The NYS Commission on Authority Reform of 2004 called for greater oversight of the hundreds of authorities and the questionable creation of hundreds of subsidiary authorities. The report made specific recommendations; a) classify public authorities based on their jurisdiction, size and scope, b) limitations on issuing new debt, c) the establishment of a commission to make recommendations to reduce the number of authorities, d) corporate governance & accounting reform, and e) expanded oversight by the NYS Comptroller. More then a dozen reports beginning with the Hults report in 1956 have advocated for reform of New York's public authorities. Specifically, the issue of excessive debt brought about by excessive spending was deemed a serious problem more then thirty five years ago. NYS Comptroller Levitt stated in his 1972 annual report, “the State of New York is mortgaging its future to a point which approaches the capacity of public burden…I am concerned not only about the magnitude of our debt structure, but also about its proliferation into unwieldy and distorted forms.” 

The New York State Commission on Property Tax relief which was impaneled to determine the root causes of New York's high property tax burden such as spending, state mandates and other factors is required to issue it's preliminary recommendations later this month with a final report by December of this year. Two of the solutions they have focused on is spending caps and other tax relief programs. The current tax relief program, STAR is a failure. While it provides relief to taxpayers at the local level, the revenue loss to local school districts from property taxes is made up through increased state aid spreading the tax burden to all taxpayers without any limitation on spending. Thus the missing component of the program is a tax cap. Unfortunately, the tax cap approach appears to be dead based on comments last month from Assembly Speaker Silver. One of the other recommendations that appears to be gaining ground is property tax relief based on income or a circuit breaker approach. While this approach seems to be fair and balanced as it is based on income, it does nothing for the majority of Long Island residents who need two incomes due to the high cost of living.

The answer is simple, reduce the level of spending. This can be accomplished by reducing the size of government to what we can afford, consolidation where it makes sense and a limitation on state debt. Why can't this be a reality? Our elected leaders don't like the answer.

NYS Commission on Local Government Efficiency and Competitiveness

New York State Commission on Property Tax Relief

NYS Commission on Public Authority Reform

NYS Authority Budget Office