Dutchess and Ulster Property taxes

Joseph Spector
Journal Albany bureau

ALBANY — Dutchess County ranks 37th in the nation for highest median property taxes, according to U.S. Census Bureau data.

Dutchess property owners pay the 38th-highest percentage of income to property taxes in the nation, according to census data.

Ulster County is not far behind, ranking 39th in the nation for the percentage of income paid to property taxes and 59th for highest median property taxes.

In New York state, local property taxes are 79 percent higher than the national average, a 2008 state report found. Property-tax levies grew 60 percent between 1995 and 2005, more than twice the inflation rate, the state Comptroller’s Office said.

A Journal Albany bureau analysis of census data shows Dutchess ranked 10th among the 62 New York counties, with more than 5 percent of household incomes going to property taxes.

This comes as no surprise to residents who say they feel squeezed by the property taxes collected for schools, cities, towns, villages and the county, as well as fire districts and other taxing entities. Years of increasing property taxes have spurred anger at the polls and in public meetings as homeowners have watched property taxes rise and their homes’ value fall.

Politicians have pitched solutions, but none have been enacted, as the state fiscal crisis — a $9.2 billion deficit — has meant less aid coming to schools and municipalities. Local programs and jobs have been cut in police departments, highway garages and classrooms, and towns have rescheduled office hours.

Property owners still feel the bite of taxes.

Marlboro resident Carole Krause’s property taxes have more than doubled since she bought her 1,500-square-foot home in 2002 — from $3,500 to about $9,000, she said.

“Taxes have been pushed down to the middle class and the working poor, and communities are no longer viable,” she said.

Kraus, who heads a property-tax reform group from her Marlboro, Ulster County, home, said some neighbors have moved, but declining property values have kept others from doing so.

One neighboring house, which was assessed at about $450,000, was on sale for two years and ultimately sold for $295,000, she said.

Hopewell Junction resident Martin Boldrin has been retired for about 12 years. He said not only did his taxes keep going up, but he didn’t get a cost-of-living increase this year and doesn’t expect one next year.

“Prices of food keep going up and up and up,” he said, “and everything is putting a strain on my budget.”

Government needs to follow the same practice his and other families do, he said.

“If I only get so much money a month,” Boldrin said, “you have to budget and make your priorities.”

Still, it could be worse.

If you lived in Westchester County, you would pay the highest property taxes in the nation, with a median of $8,404 a year.

Residents of Westchester and Rockland counties ranked second and third in the state, respectively, in the amount paid for property taxes as percentage of household income, at nearly 8 percent, trailing only Nassau County in Long Island.

Factors weighed

New York’s property-tax burden — ranked annually at or near the top in the country — has long been a leading subject of complaint among residents, whether it’s at the local diner, the school board meeting or within the halls of the state Capitol.

But the high property taxes have become more pronounced as the economy sputtered, unemployment hit record highs and the housing boom went bust.

Those issues are now coupled with a state government on the brink of insolvency, which is forcing cuts in aid to schools and local governments. The state is grappling with a $9.2 billion deficit, and last month, it delayed $2 billion in payments to schools because it ran out of cash.

Meanwhile, the factors that drive high property taxes — health care costs, high public-sector pensions and salaries — show few signs of slowing. Local governments, for example, will need to pay 61 percent more to cover local pension costs in 2011 than they are paying now.

Fleeing New York

Critics say the problem is driving people out of the state. Between 2004 and 2008, New York lost more than $19.5 billion in taxable income because of people leaving the state, a review of Internal Revenue Service data shows.

But school officials point out the school-tax-levy increase in the current school year was 1.85 percent, the lowest in at least 10 years, and they are now laying off workers because of state cuts.

Last year the Tax Foundation, a national group, found New York’s state and local taxes per capita ranked sixth in the country, behind New Jersey, Connecticut, New Hampshire and Vermont.

A Siena College poll last month, meanwhile, found that 59 percent of voters did not support cuts to health care and education — even if it meant higher taxes. Still, a Siena poll in February found voters labeled reducing state spending and lowering taxes as their top two priorities for state government this year.

Solutions sought

Solutions to the state’s property-tax issues — from proposals to enact a cap, link taxes to household incomes or cut spending — will be a top issue in the governor’s race and elections across the state this year.

In an election year, lawmakers have offered some solutions. A school-property-tax cap would limit increases to 4 percent a year or to the inflation rate. A so-called circuit breaker would tie property taxes to household income. There are proposals for mandate relief for schools to help lower costs.

Gov. David Paterson has also pushed for a tax cap and a state-spending cap. But none of the proposals has been put into law as powerful special interests have vigorously opposed many of the measures.

Already, candidates are jockeying to be the state’s chief fiscal reformer. Last fall, an anti-incumbent sentiment swept through local elections — most strikingly in places like Westchester and Nassau counties, which by no coincidence have the highest taxes in the state.

Former Nassau County Executive Thomas Suozzi led a state property-tax commission and was a prominent voice on the issue. But he lost re-election last fall.

“I’m the one who has been fighting for property-tax relief, pretty much more than anybody, and even I got booted — because they didn’t want to hear me talk about it. They wanted results,” he said.

Voting with their feet

In Rosendale, Gregory Coster said a tax assessment last year on his 47-acre property doubled his property taxes, from $8,000 to $16,000. He tried to sell the property, which he says is undevelopable, but was unsuccessful. Now he’s fighting the assessment in court and gave 5 acres for free to neighbors — just to get the property off his tax rolls.

“It’s almost unconscionable the level of taxation. It’s so excessive,” he said.

Nearly 1.7 million people left New York between 2000 and July 2009 — the most of any state in the nation, census data last month showed.

The state’s population has grown only because of an influx of immigrants and births exceeding deaths. But in some upstate counties, including Erie, as much as 4 percent of their population has left over the decade.

As the price of homes fell in recent years, it made the tax burden even more apparent, economists said.

For years, the tax increases were masked because the price of homes shot up to record highs and a state property-tax rebate program, called STAR, that refunds homeowners for a portion of their school-tax bill.

The state’s median sales price for existing homes fell 15 percent between 2007 and 2009, according to the state Association of Realtors. For the first two months of this year, the median price rebounded slightly, from $199,000 to $225,000.

“You can do a lot of stuff when you’re prosperous, with property values going up and you have more jobs coming into the community,” said Kent Gardner, president of the Rochester-based Center for Governmental Research.

“But when the tide goes out, the expectations are still there and yet the tax base is not.”

School tax burden

School taxes accounted for 61 percent of all property taxes in 2007.

Between 1993 and 2006, state aid to schools also soared — from $12 billion to $22 billion, according to the Albany-based Rockefeller Institute for Government.

But the aid in the good economic times did little to slow the growth of school property taxes, which rose an average of 5 percent over the past six years, state records show. In the 2004-05 school year, for example, state spending on schools grew 6.3 percent — but school taxes grew by 8.3 percent.

The state Commission on Property Tax Relief, formed in 2007 to explore the problem, found school staff grew by more than 12,000 between 2000 and 2007, even as enrollment declined by nearly 16,000 students.

The state, the report found, spent $18,768 per student in the 2008-09 school year — the most in the nation. But, Suozzi pointed out, New York doesn’t have the highest-ranked system in the country.

“We spend too much money,” Suozzi said simply. “New York state spends more money per student than any state in the United States of America. So that would be great if we have the best results in the country, but we don’t.”

E.J. McMahon, executive director for the conservative Empire Center for New York State Policy, compared the state’s fiscal troubles to the late 1980s and early 1990s, when a housing bubble and higher assessments fueled higher taxes and education spending. But when that bubble burst, the state scaled back, as it seeks to do now.

“What happens is the more you give schools, the more they spend,” McMahon said. “They expand their base of their expenditures, they hire more people, they get more generous in their contracts.”

Schools said they are going to rely more on spending cuts this time, with predictions that 14,000 teaching jobs could be cut if $1.4 billion in state aid reductions are made in the 2010-11 state budget, which has yet to be approved by the Legislature. They warn the cuts will devastate classroom education.

They also point out that unlike other taxing entities, voters have to approve school budgets and do so every May. School groups have proposed taxing Wall Street and the rich as a way to raise more state revenue.

“School district leaders are doing their best to balance the needs of students and taxpayers. But over 70 percent of our budgets are devoted to personnel who provide programs and services for students,” Robert Bradley, interim executive director of the Council of School Superintendents, said in a statement.

About this series

New York’s property-tax burden continues to outpace the national average, putting more stress on homeowners in a poor economy. From now until the November elections, Journal’s Albany Bureau will explore the reasons for the state’s high property taxes and what candidates seeking office this year pledge to do about it.

Source: Poughkeepsie Journal

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