Bill Text: NY S00306 | 2009-2010 | General Assembly | Introduced
Bill Title: Authorizes and directs the department of education and the state board of real property services to undertake a study with the department of taxation and finance on the fiscal impact and implication of granting local school districts the authority to implement an income tax surcharge as a means of reducing local real property taxes and funding education.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-01-06 - REFERRED TO EDUCATION [S00306 Detail]
Download: New_York-2009-S00306-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ S. 306 A. 371 2009-2010 Regular Sessions S E N A T E - A S S E M B L Y (PREFILED) January 7, 2009 ___________ IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print- ed, and when printed to be committed to the Committee on Education IN ASSEMBLY -- Introduced by M. of A. ENGLEBRIGHT -- read once and referred to the Committee on Ways and Means 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 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. Declaration of findings and legislative intent. The legis- 2 lature hereby finds that the real property tax is an inequitable and 3 regressive form of taxation wherein low- and middle-income taxpayers pay 4 a disproportionate percentage of their income in property taxes. Under 5 such a system, ability to pay is not a factor in calculating property 6 tax liability. Rather, the present system relies on an often-archaic 7 system of property tax assessment that bears no relation to household 8 income. Further, such system of taxation has priced many people out of 9 the housing market or forced them to sell their homes. In addition, such 10 a taxing mechanism has a particularly negative impact on senior citizens 11 and those living on a fixed income. 12 The legislature hereby finds that the collection of local property 13 taxes constitutes the majority of education funding in school districts 14 throughout the state utilizing such a system. Presently, approximately 15 fifty-seven percent of school funding is derived from localities. As the 16 state continues to reduce its share of the education-funding burden, 17 school districts have been forced to increase their tax rates, thereby 18 further increasing the unfair burden of such tax system. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02078-01-9 S. 306 2 A. 371 1 The legislature further finds that gross inequities exist throughout 2 the state in terms of school districts' abilities to raise money local- 3 ly. Under the present system, wealthy and "property rich" districts, 4 specifically those areas with commercial property and other entities 5 with high assessments, have a tremendous advantage over underprivileged 6 and "property poor" districts. In some districts, state aid constitutes 7 less than ten percent of the school budget. This occurs because these 8 localities have the ability to raise property taxes without unduly 9 burdening the community. 10 The legislature also finds that continued reliance on the property tax 11 has contributed to legal challenges to the state education system as a 12 whole. 13 The legislature finds that a tax scaled to income would be a fairer 14 and more progressive form of taxation under which residents would be 15 taxed based on their ability to pay. 16 Therefore, the legislature declares that the property tax, as a means 17 to fund education, contains gross inequities and that a potentially 18 fairer system, in income-tax surcharge, is worthy of study. 19 S 2. The New York State department of education and the state board of 20 real property services are hereby authorized and directed to assist the 21 New York State department of taxation and finance in preparing a compre- 22 hensive study documenting the fiscal implications of authorizing the 23 reduction of real property taxes levied for the purpose of funding 24 education costs through granting local school districts the option to 25 implement an income tax surcharge. 26 Such study shall consider the fiscal impacts on a broad spectrum of 27 incomes, as well as calculate the effects of any state income tax 28 reductions on tax receipts under such a surcharge. Such study shall also 29 consider what level of surcharge would have to be imposed to bring about 30 a dramatic reduction in the property tax. This study shall also document 31 the effects of such a change on school districts, taking into account 32 their relative wealth in terms of residents' income, property tax base, 33 level of state education funding and other relevant factors. In addi- 34 tion, such study shall be so designed as to enable individual taxpayers 35 to determine the effects of any change on their income tax and property 36 tax liabilities. The results of such study shall be submitted to the 37 legislature no later than one year following the effective date of this 38 act. 39 S 3. This act shall take effect immediately and shall remain in effect 40 until the ninetieth day after submission of the report specified in 41 section two of this act, when upon such date it shall be deemed 42 repealed.