Cuomo Sweetens plan for Property Tax Freeze

03.20.14 | Bob Price

Gov. Andrew Cuomo is offering to provide property-tax rebates to homeowners in communities even if they don't raise taxes.

Cuomo hinted at the change in his property-tax freeze proposal earlier this week. He said that the state, if approved by the Legislature, would offer up 2 percent back on people’s property taxes in a rebate check -- even if their schools and local governments freeze taxes on their own.

Initially, Cuomo proposed that the rebate would be the difference between keeping property taxes flat and the increase in the tax levy under the cap, which this year is less than 2 percent.

The change would allow the state to reward local governments that keep taxes flat. Because under the initial plan, there would be no rebate for those communities that don't raise taxes. As a result, there would have been an incentive for local governments and schools to raise taxes to the tax-cap limit in order for homeowners to get the rebate.

"In those counties (already with a freeze), the 2 percent credit from the state would actually be a reduction. It would actually be a credit below zero," Cuomo explained Monday. "I can’t remember the last time you saw a cut in property taxes, so it would really be something special for those communities."

Cuomo's pitch is the latest attempt to win over lawmakers who have cooled to his tax freeze during budget talks.

Cuomo has proposed to spend $1 billion a year to fund a plan that would provide a property-tax rebate check in communities where local governments and schools stay under the tax cap. In year two, homeowners would get the rebate if the local governments and schools came up with a plan to share services and cut the tax levy -- which is the total amount of taxes collected in a community.

The change is not expected to impact the program's price tag. The state already calculated the maximum rebates in estimating the cost of the program.

But lawmakers said they plan puts too much pressure on local governments and schools when they are dealing with growing costs and limited revenue.