Authorizes a study of the fiscal impact of granting local school districts the authority to implement an income tax surcharge

Title of bill

An act directing the New York State department of education, the New York State department of taxation and finance and the state board of real property services to study the fiscal impact of granting local school districts authority to implement an income tax surcharge and providing for the repeal of certain provisions upon expiration thereof

Purpose

This study would give the Legislature and the public a better idea as to the specific impacts of moving away from the property tax as the principal means of financing education costs in favor of an income-tax surcharge.

Summary of provisions

The State Education Department, the State Board of Real Property Services and the State Department Taxation and Finance would undertake a comprehensive study documenting the fiscal implications of authorizing the reduction of real-property taxes levied for the purpose of funding education costs through granting local school districts the option to implement an income-tax surcharge.

This study will consider the fiscal impacts on a broad spectrum of incomes, as well as calculate the effects of any State income tax reductions on tax receipts under such a surcharge. It will also consider what level of surcharge would have to be imposed to bring about a dramatic reduction in the property tax. This study would also document the effects of such a change on school districts, taking into account their relative wealth in terms of residents' income, property tax base, level of State education funding and other relevant factors. In addition, the study is to be designed to enable individual taxpayers to determine the effects of any change on their income tax and property tax liabilities.

Justification

The real property tax is an inequitable and regressive form of taxation wherein low and middle-income taxpayers pay a disproportionate percentage of their income in property taxes. Under such a system, ability to pay is not a factor in calculating property tax liability. This study would give the Legislature and the public a better ideas to the specific impacts of moving away from the property tax as the principle means of financing education costs in favor of an income-tax surcharge.

Legislative history

2007-08, S.217; 2005-06, S.96; 2003-04, S.342; 2001-02, S.2431; 1999-00, S.3130; 1997-98, S.12; 1995-96, S.3196.

Fiscal implications

None.

Effective date

This act shall take effect immediately and shall remain in effect until the ninetieth day after submission of the report specified in section two this act, when upon such date it shall be deemed repealed.