Governor Andrew M. Cuomo Thursday signed landmark legislation to empower New Yorkers to control the cost of local government by requiring counties to assemble local governments and find efficiencies for real, recurring taxpayer savings. To ensure transparency and an active role for citizens in reducing their tax burden, public hearings will be required as part of the development of shared services plans. The FY 2018 Budget continues the Governor's efforts to relieve the property tax burden by building on the success of the two percent property tax cap and requiring local governments to develop county-wide shared services plans.
The Governor also announced the potential impact of a proposal by the federal government to eliminate the ability for New Yorkers to deduct state and local taxes from their federal tax returns. On Long Island alone, approximately 950,000 taxpayers would see their taxes increase $4.3 billion, an average of almost $4,600 per taxpayer.
"New York must continue to lessen the burden of property taxes for all residents, lift middle-class families up out of challenging times, and empower voters to engage their local leaders to make real, positive fiscal change," Governor Cuomo said. "By reining in excessive property tax costs and building on accomplishments achieved over the past six years, our efforts to reduce wasteful spending and increase public involvement in local government with these shared services plans will lessen the tax burden for residents and ensure New York remains the greatest state in the nation."
The Governor announced a citizen participation tool to encourage active engagement in the process. The new County-wide Shared Services Initiative website, at www.ny.gov/SharedServices, includes:
- Educational information on implementing shared services plan;
- Examples of shared services, what other communities have done and how it helped them reduce property taxes;
- Answers to questions from citizens and local officials about developing a county-wide shared services plan that generate savings and receiving matching funds from the state; and
- Schedule of workshops being held across the state for local officials to learn more about implementing shared services – nearly 500 local officials have already signed up to attend.
The initiative establishes a shared services panel in each county, which is chaired by the Chief Executive Officer of that county who is the county executive, county manager, county administrator, the chair of the county legislature or chair of the board of supervisors. Working together, the panels will develop a county-wide shared service property tax savings plan that creates actual and demonstrable property tax savings.
The CEO of each county must adhere to the following timeline:
Create Shared Services Panel Immediately
- The CEO shall chair the panel and invite each local government to join the panel. The panel must consist of the mayor of every city or village and the supervisor of every town within the county.
- The CEO may and is encouraged to invite leaders from school districts, BOCES, and special improvement districts within the county as additional panel members.
Submit Plan to Legislative Body by August 1, 2017
- The CEO will consult with local governments, businesses and civic groups and public sector unions and take recommendations from them in developing the plan, which will then be submitted to the panel.
- The plan should include a tax savings plan summary that outlines: participating cities, towns, villages, school districts, BOCES, and special improvement districts; participating entities' 2017 property taxes; total anticipated savings; anticipated savings listed as a percentage of participating entities property taxes; anticipated savings to the average taxpayer; and anticipated costs/savings to the average homeowner and business.
- The CEO will then submit the plan to the county legislative body, along with their certification of the accuracy of the property tax savings. The county legislative body will then review the plan and may by a majority vote issue an advisory report with recommendations to the CEO.
Hold Three Public Hearings and Panel Vote on County-wide Shared Services Plan No later than September 15, 2017
- The CEO may modify the plan based on any recommendations received from the county legislative body and if the plan is modified, submit an updated certification of the accuracy of the property tax savings.
- The CEO must hold at least three public hearings in the county to receive input from residents. Public notice of these hearings should be at least one week prior to the public input date. All hearings are required to take place before the final submission of the plan to be voted on by the panel.
- Prior to the panel vote of the plan, panel members may remove any proposed action that affects their local government with written notice of the removal provided to the CEO prior to the final vote. A majority vote of the panel is then required for plan approval and each panel member must state in writing the reason for his or her vote.
Present Final County-wide Shared Services Plan to Residents by October 15, 2017
- If the plan is approved, the CEO finalizes the plan and submits it to the director of the Division of Budget. The CEO must then communicate to residents of the county what the final plan entails and what the tax savings will be.
Actions in 2018 on Plans not Approved in 2017
- If a county does not approve a shared services plan in 2017, it is directed to re-initiate the process in 2018 with identical due dates of August 1, 2018 for plan submission to the county legislative body and September 15, 2018 submission of approved plan to the Division of the Budget.
Matched Net New Savings
The FY 2018 Budget authorizes the state to match savings achieved by counties in the first year of shared services. Plans may be eligible for a one-time match of net savings that result from new actions implemented through the tax savings plan. Eligible savings are the net new savings between local governments achieved from the new actions that were part of the county-wide shared services plan and implemented between January 1, 2018, and December 31, 2018.
Cutting Property Taxes and Costs of Local Government
The FY 2018 Budget continues the Governor's efforts to relieve the property tax burden by building on the success of historic mandate relief, including eliminating growth of the local share of Medicaid – saving counties $3.2 billion in FY 2018. Additionally, the FY 2017 Budget extended reforms made to binding arbitration. For an additional three years, arbitrators must give significant weight to a distressed local government’s ability to pay and consider the property tax cap when making awards. In 2013, Governor Cuomo lowered the costs of public safety by removing statutory salary requirements for municipal chiefs of police and allowing localities with populations of 10,000 or more to recover costs of police training. In addition, $80 billion will be saved by the state, local governments and school districts over the next 30 years as a result of pension reform achieved in 2012.
In addition to these major mandate relief accomplishments, the Property Tax Cap is at the center of the Governor's efforts to help reduce the burden of property taxes for all New Yorkers. Aided by more than $100 million in State efficiency programs, it has driven local governments to control costs and save the typical homeowner $2,100 through 2016. When combined with the Property Tax Freeze, the Property Tax Cap has saved taxpayers more than $17 billion through 2016.
Although the typical New York homeowner pays 2.5 times more in local property taxes than in state income taxes, the FY 2018 Budget will empower residents to control the cost of their local government by engaging with their local leaders to make real, fiscal changes. This legislation will require counties to find efficiencies for recurring taxpayer savings, while ensuring citizens have an active role in reducing their taxes through public hearings required as part of the development of the shared services plans.
