How Did Property Taxes Get So High?

The Long Answer


Tax Structure

In 1972, New York State increased the tax burden on the middle class and cut taxes for its highest income taxpayers by over $8 billion a year.

New York State used to have a personal income tax with 14 brackets, ranging from a low of 2% to a high of 15%.

Since 1972 the state government has restructured the state personal income tax in a variety of ways. Among the changes made there's been a move toward something akin to a flat tax. This has been done by eliminating brackets from both the bottom and the top of the old structure.

If the state had been collecting that additional income tax revenue, the state would not have had to cut and freeze state revenue-sharing with local governments as it has on so many occasions; and it would have been able to increase the share of school budgets covered by state aid. What we actually got, instead, were cuts in revenue sharing and smaller increases in school aid than would otherwise have been possible. And this meant bigger increases than necessary in local property taxes and school taxes - again hitting middle income families very hard.

Source: June 4, 2005. Fiscal Policy Institute. How New York State has Increased the Tax Burden on the Middle Class while Cutting Taxes for its Highest Income Taxpayers by Over $8 Billion a Year.

Cost Per Student

For the 2008-09 school year, New York was the third highest among the states in per pupil expenditures for public schools, at $15,997 -- 57 percent higher than the national average of $10,190 per pupil. Rhode Island and New Jersey ranked first and second.

These are average expenditures in the State and among the 50 states. Individual school districts spend more; some much less. Rondout Valley Central School District in the Hudson Valley, for example, spends $27,000/student.

Source: Office of the NYS Comptroller, 2010; Rondout Valley Central School District.

Tax Cuts

More tax cuts for the top 5% income earners: The Pataki tax cuts of 1994 have resulted in NYS collecting $16 billion less in revenue on an annualized basis than it would have had we not enacted these tax cuts.

With greatly reduced income tax revenues, the State has reduced the the size of its share of the cost of education aid, leaving local tax payers to make up the difference.

Who Pays

Who picks up the heaviest burden? Low and middle-income families.

Top income tax rates for the wealthiest have been slashed from 15.375% to 6.85% over the last 25 years. The richest 1% - those with an income of $633,000 + – pay only 7.2% of their income in state and local taxes.

Meanwhile, people making over $200,000 per year have seen their incomes grow by 108%, while those earning under $200,000 have seen their incomes grow by only 15%. (Source: NYS Division of Budget)

The tax rate on families in the middle-of-the-income distribution ($33,000 and $56,000) is 11.6%.

The poorest New Yorkers – those below $16,000 – pay 9.7%.

Sources: New Yorkers for Fiscal Fairness; Institute on Taxation and Economic Policy, 2009

What's the Answer? Reach for the Circuit Breaker!

Learn how the Omnibus Circuit Breaker legislation will offer relief for NY State homeowners.