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Michael Miller


By Michael Miller
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Property Tax Crisis Puts Long Island At Risk

Earlier this fall, County Executive Mangano suggested that the only way to keep Nassau’s unraveling real property tax assessment system in balance was for every owner to challenge their assessment every year. The Seventh Seal of local public administration has been broken.

Our state and local finance problems are just as much a part of the Superstorm Sandy story as pillorying LIPA officials and refilling beaches. So far, nearly all attention has been focused on Washington for damage relief funding. Already, there is pushback. Some House and Senate Republicans want offsetting spending cuts for the aid, which delayed disbursements for Irene damage last year. This will work itself out, one way or another. What’s really scary are the still-abstract long-range costs that will begin transforming into solid wall, soon.

I’m not certain how serious Mr. Mangano meant his suggestion to be, but he is at least sort of correct in that hundreds of thousands of annual appeal filings would to an extent hit the Control-Alt-Delete keys every January. Unfortunately, the system he runs can’t handle anything like that. Far worse, in a period of unprecedented movement in property values, the best way to make this mess work is a system that universally, constantly and instantaneously assigns assessments throughout the year, much as I imagine Santa Claus does when making out his lists.

That kind of technology is absolutely possible today. But no App will deliver us from a taxation arrangement that is regressive, indiscriminate, anachronistic and bleeding.

Despite every political pressure not to do it, desperate and discouraged local officials are voting to blow right through the “tax caps.” 1,575 of New York’s non-school taxing units are required to file annual tax cap reports with the state before January 1. Last year, the first year of an increase limit, 19 percent of these districts voted to override the cap (5 percent of school districts). As of last week, already a full 25 percent of government units across New York plan to exceed it in 2013. The tax cap formula is so complex that Tompkins County, home to an Ivy League university, wasn’t sure and passed a cap override just in case.

In many New York communities, they’re getting it both ways, with high tax increases and severe layoffs, service cuts and the sale or lease of major public assets (nursing homes, buildings, infrastructure). Slowly, it is the start of the Austerity Death Cycle economists are trying to warn us about.

In Nassau County, only 10 governments officially plan to override so far, but more are coming.

It’s school district taxes that have hammered home to thousands the uselessness of the theoretical tax cap. When school bills hit in October, many began to understand the implications of unstable total assessed valuations based on market values, exacerbated by neighbors’ assessment appeals. School districts don’t set tax rates. They only estimate them by matching their proposed budget against the tax base. Change the tax base and you change the final tax bill. Some taxpayers got hit with double digit increases even in districts that stayed within the cap.

We slash property taxes and could have a permanent tax cap of zero if the state did the right thing and assumed the full and total costs of the programs local officials complain about all the time as “unfunded mandates.” Medicare, Special Education, pension contributions, all of them. This would shift billions from local property taxes to more progressive state income taxes that are more understandable and based in tangible reality.

With many elected officials just staring, this may be the best and only property tax reform we can get.

Listen to people who don’t fool around regarding risk. In the past month, stunning reports by Munich Re, the world’s largest reinsurer (meaning they insure the insurance companies) and the National Research Council on commission by the Central Intelligence Agency, warned that we will be  increasingly vulnerable to severe, incredibly expensive disruptions. Massive expenditures are going to be needed to protect the Atlantic coastline and its communities.

Our state and our local governments will have to take responsibility for some of it, and we need to pay for it somehow.

Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. Email: