BALCONY Opposes Property Tax Caps, Supports “Circuit Breaker;” State Senate to Vote Aug. 8

Friday, August 8th – in a special session, the NY State Senate is slated to debate and vote on Governor David Paterson’s property tax cap plan. BALCONY – and many other organizations throughout NY State – oppose property tax caps since, for starters, they favor some communities over others.

BALCONY member Alfred E. Smith, IV – great grandson of NY State Governor Al Smith and the current Chairman of the Board of St. Vincent’s Catholic Medical Center – questions the the wisdom of property tax caps in this elegant opinion piece:

What the People Want
by Alfred E. Smith, IV

As a politician, my great-grandfather Al Smith was larger than life. He was speaker of the New York Assembly, Governor of the State of New York and the first Roman Catholic to run for President of the United States. Although he was defeated in 1928 by Herbert Hoover, Hoover’s legacy has become synonymous with the onset of the Great Depression, which just goes to show you that sometimes the voters don’t always get what they bargain for.

Known as “the patron of the little people” for his dedication to those who were less fortunate than most, my great-grandfather was a beloved politician. That’s an oxymoron in today’s bare-knuckled arena of politics, which unfortunately has become more of a blood sport than a calling. Voters still have the last word on their representation, so politicians try to give them what they believe the voters want most. Not much has changed in that regard since my great grandfather’s time.

Sometimes giving the people what they want is more complex than it appears. Take the discussion over tax caps in New York State. A recent poll of New Yorkers indicated that 74% of the people want their taxes capped which has sent officials, Democrats and Republicans alike, scrambling for voters’ support by making proposals to cap real property or local school taxes. Many of the solutions advanced will do more harm than good by giving the people “what they want.”

One recommendation advanced by the New York State Commission on Real Property Tax Relief is a classic example of bad public policy. The proposal would cap school district expenditures to 4% or 120% of inflation whichever is less.

It is an across the board solution that doesn’t work everywhere. One size does not fit all. Poorer districts would be unable to raise the revenues they need to provide the education their children deserve, while wealthy districts could easily override the cap by local initiative widening the achievement gap the state as a whole has tried to narrow over the last several years. This comes at a time when the gap is narrowing thanks to both local and state investment in public education. Across the board caps would lock in disparities that exist today.

Looking more closely at this issue, what the voters are really after is some sort of personal real property tax relief – not real property tax caps. If the public didn’t want greater investment in education, they would vote down their local school budgets. But in each of the last 2 years, 95% of school budgets put before the voters were approved. Clearly, New Yorkers want more resources invested in the schools, but they’d likely prefer that it was the state that did more, not the average homeowner.

As a prodigy of my great-grandfather, I understand the needs of working men and women. Many of the working poor — the elderly on fixed incomes with small pensions or Social Security, the many hard working families struggling to get by — are the homeowners clamoring for real property tax relief. A cap will not lessen their burden. In fact, some suggest it will simply become the new floor for regular increases.

There are several proposals that would address real property tax relief. One suggestion is what’s known as the “circuit breakers” real property tax rebate. This was one of the recommendations buried in the Commission on Real Property Tax Reform that has been ignored by many.

A “circuit breaker” provision in New York’s tax law would work like this: when a homeowner whose earnings and assets are below a set threshold, and their real property tax burden exceeds a certain percentage of their income (say for example 10%), the homeowner would receive an exemption or tax relief for the balance of their property tax. Seniors would no longer be “taxed out of their homes”. A cap would not provide the relief a circuit breaker would provide. A recent Siena Research Institute poll found that 75 per cent favor this circuit breaker approach, even if it means raising income taxes on the most wealthy.

For most Americans, their home is their single greatest source of wealth. As its value appreciates, so does their nest egg, their legacy. Tax caps will harm school quality, resulting in lower property values, in effect capping the expansion of regular homeowners overall wealth. This would be an unintended consequence of what some might consider a good proposal.

Those who get true tax relief under the circuit breakers are exactly the ones who need it most. To pay for the proposed tax relief, the State would need to increase revenue sharing with New York’s cities and towns. One idea that has been floated to fund the State’s new payments to cities and towns includes a modest 1% surcharge on the income taxes of the very wealthy to help fund public education. This seems like a fair progressive way to ensure that the elderly and low-income individuals get a tax break.

There will be a great deal of debate over these issues, especially as election time draws near. A problem as complex as this requires the participation of all stakeholders, including the Governor, Senate, Assembly, along with unions including teachers’ groups, state, and local employees, and homeowners. As my great-grandfather used to say “All the ills of democracy can be cured by more democracy.” Let’s not let bad policy be adopted in the name of “what the people want”.

Governor meets with BALCONY

BALCONY enjoyed the opportunity to meet with Governor David Paterson.

BALCONY meets New York Governor David Paterson recently at the home of former Governor Hugh Carey.

(left to right) Bruce Ventimiglia – Co-Chair; Angela Severiano, BALCONY Events Director; Governor Paterson;
Alan Lubin, Balcony Co-Chair; Lou Gordon, BALCONY Director

Former Governor Hugh Carey addresses the audience.

Former Governor Carey and BALCONY co-chair Bruce Ventimiglia

State pension fund drops by $600 million

By Tom Precious – NEWS ALBANY BUREAU

ALBANY— For the first time in recent memory, the huge pension fund for state and local government workers across the state declined last year, although it beat many other public pensions systems.

State Comptroller Thomas P. DiNapoli said that when all the various pots are counted up, investments in the New York State Common Retirement Fund rose by 2.5 percent in the fiscal year that ended March 31, compared with 12.6 percent the previous year.

Though its stock, bond and other holdings rose overall, the fund lost money because of lower contributions by state and local governments and nearly $7 billion in payouts to retirees — up 7 percent from the previous year.

The fund ended the fiscal year with a balance of $153.9 billion, down from $154.5 billion the previous year.

The fund’s biggest investment — the U. S. stock market — dropped 6.4 percent last year. But those loses were offset by big gains in its private equity holdings — which includes venture capital and buy-out investments — and real estate holdings in various commercial and residential properties around the world.

DiNapoli said the pension system, with 1 million members, is fully funded.

Whether its performance, however, was good enough to ensure that state and local governments will not have to boost payments for their employees will not be determined until this fall.

For taxpayers, the fund’s performance is important because any gains offset how much cities, towns and other localities have to contribute for employee pension payments.

That directly effects property taxes and how much money is available for government services.

State pension fund drops by $600 million

By Tom Precious – NEWS ALBANY BUREAU

ALBANY— For the first time in recent memory, the huge pension fund for state and local government workers across the state declined last year, although it beat many other public pensions systems.

State Comptroller Thomas P. DiNapoli said that when all the various pots are counted up, investments in the New York State Common Retirement Fund rose by 2.5 percent in the fiscal year that ended March 31, compared with 12.6 percent the previous year.

Though its stock, bond and other holdings rose overall, the fund lost money because of lower contributions by state and local governments and nearly $7 billion in payouts to retirees — up 7 percent from the previous year.

The fund ended the fiscal year with a balance of $153.9 billion, down from $154.5 billion the previous year.

The fund’s biggest investment — the U. S. stock market — dropped 6.4 percent last year. But those loses were offset by big gains in its private equity holdings — which includes venture capital and buy-out investments — and real estate holdings in various commercial and residential properties around the world.

DiNapoli said the pension system, with 1 million members, is fully funded.

Whether its performance, however, was good enough to ensure that state and local governments will not have to boost payments for their employees will not be determined until this fall.

For taxpayers, the fund’s performance is important because any gains offset how much cities, towns and other localities have to contribute for employee pension payments.

That directly effects property taxes and how much money is available for government services.

Assembly Democrats push home-heating relief instead of tax cap

By Joseph Spector

ALBANY – With a home-heating crisis looming this winter, Assembly Democrats argued yesterday that the state needs to give people relief from their energy bills before giving them a break on their property taxes.

Meanwhile, the state is already expected to expand its home-heating relief program this winter, increasing the income eligibility for a family of four from $43,308 a year to $45,312 a year.

State Comptroller Has an Idea for Increasing Growth in New York’s Pension Fund

By Jeremy W. Peters

ALBANY — To cope with a growing number of retiring baby boomers and a shrinking state pension fund, the state comptroller said on Monday that he would ask the Legislature to permit a larger share of state pension assets to be placed in less-traditional investments.

The part of the pension fund that can now be placed in such investments, like private equity and hedge funds, is 25 percent.

But the comptroller, Thomas P. DiNapoli, said that those restrictions limited the state’s options for increasing the fund’s assets at a time when more traditional investments like domestic stocks are experiencing volatility and the pool of retired state workers is expanding by the day.

PEF ‘Exploring Options’ Over See Through Site

The Public Employees Federation, New York’s second-largest state employees union, is sounding an alarm over the Empire Center’s new information clearing house Web site, SeeThroughNY, suggesting that while the information available there is indeed public, making it so easily accessible could be a threat to their members’ safety.

In an e-mail to PEF members sent out Friday, union President Ken Brynien wrote:

“Unfortunately, State employees’ payroll information is a matter of public record. Under FOIL, as a general matter, all records of a State agency are available, unless a certain exception applies. One exception under the Public Officers Law, is where disclosure would result in an “unwarranted invasion of privacy.”
However, salaries and work locations of State employees have been found by the Courts to be available to the public.

The disclosure of this information and the ease of access to the information has ramifications regarding the personal safety of the individuals in the database; there has been at least one instance brought to our attention where a co-worker of a member was living in a shelter for battered women and her estranged husband was able to identify her work location through the website and is now stalking her at her work site.”

Brynien, whose e-mail appears in full after the jump, says PEF is still exploring its options regarding what – if any – action to take against the site.

PEF spokeswoman Dracy Wells would not rule out a lawsuit, although she did acknowledge that there are legal precedents that don’t bode well for that avenue, should the union choose to take it.

The Empire Center’s EJ McMahon noted that the information on the Web site was obtained via what appears to be the largest FOIL request in state history and seemed unconcerned by the prospect of a legal challenge.

“Be my guest,” he said. “Ultimately, they’re challenging the Freedom of Information Law.”
“This doesn’t say where people live,” McMahon continued. “If the objection is, ‘Now you’ve invaded my privacy and people can find me,’ well, I’ve got news for you: We’re all pretty easy to find, and it’s everyone’s business what you make if you work for the government.”

McMahon also pointed out that as long as information like birthdays, Social Security numbers and home addresses aren’t posted, it’s difficult to confirm a person’s true identity. However, that sort of thing is easily available on the Internet (generally for a small fee).

The Empire Center isn’t the first to do this, either. Some governments are making payroll information available on-line themselves, and a number of newspapers have also done so.

As you are probably aware there is a website run by the Empire Center of the Manhattan Institute which has put the payroll information of approximately 263,000 state employees in an on-line database that is available to the general public through the SeeThroughNY website.

The payroll information was provided to them through the Office Of the State Comptroller as a result of a FOIL request.

Unfortunately, State employees’ payroll information is a matter of public record. Under FOIL, as a general matter, all records of a State agency are available, unless a certain exception applies. One exception under the Public Officers Law, is where disclosure would result in an “unwarranted invasion of privacy.” However, salaries and work locations of State employees have been found by the Courts to be available to the public.

The disclosure of this information and the ease of access to the information has ramifications regarding the personal safety of the individuals in the database; there has been at least one instance brought to our attention where a co-worker of a member was living in a shelter for battered women and her estranged husband was able to identify her work location through the website and is now stalking her at her work site.

We continue to explore options regarding this and if our members have a legitimate concern regarding this invasion of their personal privacy, and they wish to explain their concerns to the Empire Center or Manhattan Institute these organizations can be reached by phone or fax at:
Empire Center- phone 518-434-3100, fax: 518-434-3130
Manhattan Institute – phone: 212-599-7000, fax: 212-599-3494
Please make this information available to members that are concerned about this site.
Thank you,
Ken Brynien, President

Spending on NY’s aging bridges rises modestly

By Richard Richtmyer

ALBANY, N.Y. – Transportation officials in New York are keeping a closer eye on the condition of the state’s highway bridges a year after a deadly collapse in Minnesota.

They also say they’re increasingly concerned about the so-called “baby boom” bridges built during the surge of highway construction after World War II.