FOR RELEASE:

Local Property Taxes Increased By Three Times
The Rate Of Inflation in Last Five Years

New York State’s Property Taxes Among Highest in Nation

New York State local property taxes increased 42 percent from 2000 to 2005 ― or more than three times the rate of inflation ― growing from $26 billion to $38 billion, according to a research brief on property taxes issued today by New York State Comptroller Alan G. Hevesi. New York State’s local property taxes are nearly 50 percent above the national average and are the fourth highest in the nation per capita.

The report provides an overview of recent trends related to property taxes, analyzes property taxes across different regions of the State and types of local governments, and provides comparable data for every county in the state. New York City has been excluded from a number of the report’s statewide statistics because the City’s property taxes are relatively low compared to other local governments because it collects revenue from a number of local taxes, including a personal income tax.

Major findings of the research brief include:

• New York’s Property Tax Burden Higher than National Average. Per capita property tax was $1,406 in 2002, the most recent year for which federal data is available, or 49 percent above the national average of $945, and $40 per $1,000 of personal income, or 28 percent above the national average of $31 per $1,000. When New York City is excluded, property tax per capita was $1,634 in 2002 ― 73 percent above the national average. In fact, it may even be higher given the growth of property taxes in the last five years.
• Largest Local Tax. By far, the property tax is the largest tax imposed by local governments, representing 79 percent of all local taxes outside of New York City.
• Property Taxes Growing. Property taxes tend to increase quickly if the economy slows or other revenues decline. From 1995 to 2005, local property taxes grew by 60 percent, while inflation was 28 percent. Most of this growth occurred in the last five years after the economy took a downturn.
• Types of Governments and Regional Differences. Reliance on property taxes varies greatly across types of local governments. Regionally, there are significant variations in amounts paid, with some suburban downstate counties with property taxes per household that are more than twice the statewide average.

“New York taxpayers’ property tax burden is nearly 50 percent higher than the national average ― and shockingly, for areas outside of New York City, 73 percent higher than the national average,” Hevesi said. “Property taxes are by the far the largest and fastest growing component of most New Yorkers’ tax bills. Because local governments have little choice but to raise property taxes or cut services when other revenues fall short during tough economic times, this trend will likely continue.”

Other findings of the research brief include:

State and National Differences

• Highest Local Taxes in Country. Local taxes are the highest in the country, at $67 per $1,000 of personal income in 2002, 60 percent higher than the national average of $42. Maine is the next highest state at $55, which is nearly 20 percent lower than New York.
• Highest Combined State and Local Taxes in Country. New York taxpayers also have the highest combined State and local tax burden in the nation because of high local taxes, with a total tax bill of $131 for every $1,000 of personal income in 2002, nearly 26 percent higher than the national average. State taxes are actually about average, at $64 per $1,000 of personal income versus $62 nationally.

Regional Differences

• Total Taxes Per Household. When measured as total taxes per household, taxpayers in Hamilton, Nassau, Putnam, Rockland, Suffolk and Westchester counties have tax burdens that are more than twice the statewide average. In contrast, several western and northern counties, including Cayuga, Chemung, Erie, Herkimer, Tioga and Wyoming, have overall tax burdens that are around 20 percent below the statewide average.
• Property Values. Property values, a measure of household wealth, are three to four times above the statewide average on Long Island and in much of the Mid-Hudson Valley.
• Property Value Growth. Suburban downstate property values grew by 7 percent annually from 1995 to 2005, almost five times as fast as the average annual upstate growth of 1.5 percent.
• Full Value Rates. Although downstate suburban taxpayers have some of the biggest tax bills in the State, they actually have relatively low tax rates since their property values are so high. In contrast, many western and northern counties have low total tax bills but high rates given their lower property values. Full value property tax rates ranged from $20 per $1,000 in Hamilton, Suffolk and Warren counties to over $45 per $1,000 in Allegany, Chenango and Montgomery counties.

Variations Among Types of Local Governments

• Reliance Varies Greatly Among Types of Local Government. Fire districts receive more than 90 percent of their revenues from property taxes. School districts and towns depend on property taxes for about half of total revenues followed by villages at 45 percent. Counties and cities receive only about one-quarter of their revenues from property taxes because they also typically receive significant revenues from sales taxes.

Click here for a copy of the report.

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