Bill Text: NY A05685 | 2019-2020 | General Assembly | Introduced

Bill Title: Authorizes and directs the department of education 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 (Democrat 1-0)

Status: (Introduced) 2019-02-14 - referred to ways and means [A05685 Detail]

Download: New_York-2019-A05685-Introduced.html

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    February 14, 2019
        Introduced  by  M.  of  A.  ENGLEBRIGHT -- read once and referred to the
          Committee on Ways and Means
        AN ACT directing the education department and the department of taxation
          and finance to study  the  fiscal  impact  of  granting  local  school
          districts  authority to implement an income tax surcharge; and provid-
          ing for the repeal of such 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.
    19    The  legislature  further finds that gross inequities exist throughout
    20  the state in terms of school districts' abilities to raise money  local-
    21  ly.    Under  the present system, wealthy and "property rich" districts,
    22  specifically those areas with commercial  property  and  other  entities
    23  with  high assessments, have a tremendous advantage over underprivileged
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 5685                             2
     1  and "property poor" districts. In some districts, state aid  constitutes
     2  less  than  ten  percent of the school budget. This occurs because these
     3  localities have the ability  to  raise  property  taxes  without  unduly
     4  burdening the community.
     5    The legislature also finds that continued reliance on the property tax
     6  has  contributed  to legal challenges to the state education system as a
     7  whole.
     8    The legislature finds that a tax scaled to income would  be  a  fairer
     9  and  more  progressive  form  of taxation under which residents would be
    10  taxed based on their ability to pay.
    11    Therefore, the legislature declares that the property tax, as a  means
    12  to  fund  education,  contains  gross  inequities and that a potentially
    13  fairer system, in income-tax surcharge, is worthy of study.
    14    § 2. The education department is hereby  authorized  and  directed  to
    15  assist  the department of taxation and finance in preparing a comprehen-
    16  sive study  documenting  the  fiscal  implications  of  authorizing  the
    17  reduction  of  real  property  taxes  levied  for the purpose of funding
    18  education costs through granting local school districts  the  option  to
    19  implement an income tax surcharge.
    20    Such  study  shall  consider the fiscal impacts on a broad spectrum of
    21  incomes, as well as calculate  the  effects  of  any  state  income  tax
    22  reductions on tax receipts under such a surcharge. Such study shall also
    23  consider what level of surcharge would have to be imposed to bring about
    24  a dramatic reduction in the property tax. This study shall also document
    25  the  effects  of  such a change on school districts, taking into account
    26  their relative wealth in terms of residents' income, property tax  base,
    27  level  of  state education funding and other relevant factors.  In addi-
    28  tion, such study shall be so designed as to enable individual  taxpayers
    29  to  determine the effects of any change on their income tax and property
    30  tax liabilities. The results of such study shall  be  submitted  to  the
    31  legislature  no later than one year following the effective date of this
    32  act.
    33    § 3. This act shall take effect immediately and shall remain in effect
    34  until the ninetieth day after submission  of  the  report  specified  in
    35  section  two  of  this  act,  when  upon  such  date  it shall be deemed
    36  repealed; provided that the commissioner of taxation and  finance  shall
    37  notify  the  legislative bill drafting commission upon the submission of
    38  such report to the legislature in order that the commission may maintain
    39  an accurate and timely effective database of the official  text  of  the
    40  laws  of  the  state  of  New  York  in  furtherance of effectuating the
    41  provisions of section 44 of the legislative law and section 70-b of  the
    42  public officers law.