End the property tax nightmare!

March 26, 2011

Filed under: Updates — gioia @ 12:37 pm


THIS IS IT… as mentioned in a previous blog posting, this is  THE BONACIC circuit breaker BILL we need to support NOW!… we were waiting for this summary to blog for you…. It was sent hot off the presses by Rich Wray a tax reform member of the network….

The Omnibus Consortium supports this Omnibus circuit breaker Bill.

Sat. Mar. 26, 2011 .

Thanks Rich.

Memo BILL NUMBER: S4171 TITLE OF BILL: An act to amend the tax law, in relation to personal income tax; to amend the state finance law, in relation to establishing the real property tax circuit breaker account and the education financing account; and directing the commissioner of taxation and finance to adjust certain withholding tables and methods PURPOSE: To enact a fair and responsible measure to control and reduce property taxes for New Yorkers. SUMMARY OF PROVISIONS: Provides for a “circuit breaker” for taxpayers earning up to $250,000 per year who pay a disproportionate share of their income in property taxes. New Yorkers would receive a credit on their 2012 income taxes depending on their income level and the percentage of property taxes they pay as a portion of their income. The tax credit would consist of 70% of any amount paid in property taxes beyond the percentages and income levels are noted below: HOUSEHOLD GROSS INCOME MAXIMUM REAL PROPERTY TAX $100,000 or Less 6% of Household Gross Income $100,000 – $150,000 6% of $100,000 Plus 7% of up to the Next $50,000 $150,000 – $250,000 6% of $100,000 Plus 7% of $50,000 Plus 8.5% of Household Gross Income Above $150,000. Provides for the revenue to pay for the circuit breaker portion of this legislation, by maintaining the current income tax rate for those earning $1 million of more, for the calendar years 2012 and 2013. Provides that the revenue derived from the difference between the 2008 income tax rate for those earning over $1 million, and the 2012/2013 rate, would be deposited into two dedicated funds. The first would be used to pay for the circuit breaker tax credit; and the second would be for education. EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER: The legislation maintains the 2011 income tax rate for those earning $1 million or more through 2013 and provides a dedicated source of revenue to fund property tax relief. The legislation would also establish two dedicated funds under the State Finance Law (for property tax relief and school aid). JUSTIFICATION: Depending on which study one were to believe, New Yorkers pay the first or second highest tax burden of any State in the nation. The Public Policy Institute of New York State found New Yorkers paid $2.3 billion more in property taxes in 2010, than in 2009. A report from State Comptroller Thomas DiNapoli, issued in March, 2011, indicates that suburban counties in New York, have the highest foreclo- sure rates in the State. Property tax relief is important for New York’s middle class in every part of the State. In areas of high unemployment, the issue is an even greater concern. Property taxes are too high, and are not rationally related to income. A family’s property tax bill can easily be 25% of their mortgage payment, often times a much higher percentage. In these recessionary times, the government must make choices of tax fairness in order to keep middle class New Yorkers in the State and financially viable as long-term residents of New York. In the property tax system, there is no “check and balance” system to account for job losses or other downtowns in personal income. As a result, during even a short term financial crisis, struggling middle class families may be forced to sell their lifetime’s biggest investment – their home. The decision this legislation proposes to make, would assist millions of middle class families, with long term property tax relief. The middle class tax relief would be funded initially, while the economy is recovering, by continuing the 2011 income tax rates, solely for persons who earn more than $1 million, for two years, while the economy is struggling to recover. LEGISLATIVE HISTORY: New legislation. FISCAL IMPLICATIONS: The fiscal implications of the circuit breaker legislation are estimated not to exceed $2.3 billion. The revenue derived by the State by maintaining the current income tax rate, on those earning more than $1 million, would equal an estimated $3.362 billion. EFFECTIVE DATE: Immediately. S4171-2011


1 Comment »

  1. According to the data in this paper:
    In 2002, local property taxes in New York were $1,406 per capita (or 49 percent above the national average) and $40 per $1,000 of personal income (or 28 percent above average). See:

    But when this data is applied to single people, or someone with little or no income, the proportionate burden of tax much worse.

    The sited statistics show that a combined property tax bill of $10,000 should, by the state average, distribute across 7 people or a household income of $250,000.

    Thereby imposing a $10,000 tax on a single person’s home imposes a tax that is 7 times out of line with the state per capita average.

    However imposing the same $10,000 tax, on the home of a person whose income is $5,000, imposes a tax that is 50 times out of line with the state average per amount of income.

    How can it be lawful to levy a tax that imposes such inequality of treatment, especially as the tax is unavoidable? The reason it is unavoidable is that it is a tax on a necessity of life that is unequivocally necessary in the geographical and climatic region occupied by NYS.

    So it amazes me that they still can’t seem to write that bill so that no one pays in greater proportion than the state average i.e. 6% of their income.

    According to Bill S4171-2011, a single person with a $5,000 income and $10,000 tax would still be required to pay $3,210 in taxes on their home. That is still 2.28 time greater than the state per capita average, and 16 times greater than the state average based on income.

    Comment by Dave — March 27, 2011 @ 3:36 pm

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