Cuomo and Silver Compromise on 2 Percent Tax Cap

Though the purpose of the League of Women Voters' event was ostensibly to debate the merits of a proposed 2 percent tax cap, the announcement by panelist Edmund J. McMahon that Gov. Andrew Cuomo and other legislative leaders have come to an agreement on a proposed 2 percent property tax cap tempered the tone of the evening's exchange.

"This is game-changing reform," said McMahon.

According to a New York Times article, Assembly Speaker Sheldon Silver (D- Manhattan) has indicated he will stand behind the measure if it is tied to buttressed rent-stabilization regulations in New York City. The tie between the tax cap measure and the rent stabilization regulations may be the last sticking point in passing the measure before June 20. The State Senate reportedly favors making the tax cap permanent; while the Assembly favors a sunset clause. The compromise appears to be tying the longevity of the tax cap to the lifespan of the rent stabilization regulations in New York City.

The Rye, Rye Brook and Port Chester chapter of the League of Women Voters invited Edmund J. McMahon, senior fellow at the Manhattan Institute for Policy Research and the Empire Center for New York State Policy; Lisa Davis, executive director of the Westchester-Putnam School Boards Association; and Dennis Pilla, Mayor of the Village of Port Chester to discuss the 2 percent tax cap at Rye Free Reading Room Tuesday evening. 

According to literature provided by the Empire Center for New York State Policy, Cuomo's proposed tax cap- modeled after similar legislation in Massachusetts- would be 2 percent or the rate of inflation, whichever is less. Municipalities could exceed the tax cap if 60 percent of their governing boards- or the electorate in the case of school budgets- approved it.

Instead of voting on proposed school budgets, the measure shifts school district referendums to votes on proposed tax levies. If a school district failed in two tries to approve a tax levy, it would remain at the previous year's level, or a zero percent increase.

"How timely is this?" asked Mayor Dennis Pilla. "How can you be against a tax cap? But a tax cap without structural reform is not sustainable."

With the shift in tide, Lisa Davis of WPSBA said that her concern was that the real issue was not the tax cap, but mandate relief. Davis called for a repeal of the Triborough Amendment to the Taylor Law, changes to pension contribution models, the establishment of renewable tenure and an end to 'last in first out' policies.

"We need flexibility, tax cap does not allow that," said Davis. "Mandates are really what needs to be addressed, that's the right solution."

McMahon said that he agreed the tax cap alone would not solve the problem of escalating mandate obligations. 

"If there is no tax cap there will be no mandate relief," said McMahon. The passage of the tax cap and the inevitable tension between the level of services communities desire and the difficulty paying for them under the restrictions "will cause pressure to grow more intense on the state legislature."