Enacts the property tax relief act

BILL NUMBER:S6565

Title of bill

An act to amend the education law, in relation to capping expenditures for administrative services; and to amend the tax law, in relation to creating the middle class circuit breaker tax credit

Purpose

To reduce the cost of education so that New York can lower the cost to do business and provide tax relief for property owners.

Summary of provisions

Section 1 titles this as the Property Tax Relief Act.

Section 2 amends Section 2 the education law by adding a new subdivision to define "central administration services."

Section 3 amends the education law to add a new section 1510-a to cap school district spending on central administration services at three percent of its total budget.

Section 4 amends education law to require all school districts to decrease 2014-15 school budget by the amount of administrative costs reduced under section 3 of this bill.

Section 5 amends section 606 of the tax law to create a circuit breaker to offer property tax relief to those whose property taxes are becoming too large a portion of their income.

Section 6 sets forth that this act shall take effect immediately.

Justification

Our current 17th century method of funding public educa- tion in New York State is outdated and broken. It has led to the highest property taxes in the nation and has unnecessarily increased the cost of doing business in New York. Unaffordable property taxes are driving people away from our communities and making it more of a struggle to raise a family in New York. If we do not change this unsustainable course, New York will not be able to attract the workers and the busi- nesses it needs to succeed in the 21st century economy. We need to reduce the cost of living in New York State to help attract the best and the brightest from around the nation and across the world to become members of our communities to help grow our economy and enrich our communities.

One way to reduce costs in our public education system is by reducing school administrative costs. Some school districts expend almost ten percent of their budget on administration. This is unacceptable as it takes away resources from students and teachers in the classroom. This legislation proposes to cap those expenses and to reduce the tax levy in proportion to those decreased expenses. Homeowners and business owners deserve to have their education dollars actually spent in the classroom.

Another way of providing much needed tax relief is through a real prop- erty tax circuit breaker program. This would be a State income tax cred- it to eligible homeowners who pay a disproportional amount of property tax in relation to their household income. Many older New Yorkers are being forced out of their homes because their fixed incomes cannot support their increasing real property taxes. This circuit breaker would rightly shift the burden of paying for education to the state and away from localities and those who can least afford to pay.

Legislative history

This is a new bill.

Fiscal implications

This bill will offer tax relief to those whose property taxes are slowly eating away all of their income. This program would require New York State to forego tax revenues that it would have raised. It would also offer immediate tax relief to home owners of $1.1 billion in years two and three and $2.3 billion in years four and every year thereafter.

Effective date

This act shall take effect immediately.