Circuit Breaker Relieves Property Tax Burden

Last week, I proposed an Executive Budget for 2010-2011 that includes a spending cap to control state spending.  Tied to that cap is a property tax circuit breaker that would provide property tax refunds to New York's working families.  The spending cap will impose long-term fiscal discipline by forcing state government to live within its means.  The cap puts New York State on a path to economic recovery that will lead to future budget surpluses -- which will then be returned to taxpayers through property tax relief. 

My 2010-2011 Executive Budget not only meets, but will exceed the requirements of my spending cap. Under my proposed budget, expenditures for the coming fiscal year would be far below the rate of inflation. Additionally, if enacted by the Legislature, my spending cap would require sufficient spending cuts to generate a more than $1 billion surplus in the 2011-12 fiscal year. This is great news for both the fiscal health of our State, and you, our taxpayers, as I will return this surplus to you through a progressive, circuit-breaker tax credit that will place billions of dollars in property tax relief directly into your pockets.

The circuit-breaker benefit included in my proposal would be calculated by limiting your property tax burden to a specified percentage of your income. That percentage would decrease based on the size of the State’s surplus. And as New York’s fiscal condition improves, the circuit-breaker program could provide you with an increasingly larger benefit, since you would pay an increasingly smaller percentage of your income in property taxes.

The amount of recipients and the average value of the benefit would increase based on the size of the State’s budget surplus. At the close of each fiscal year, the NYS Department of Taxation and Finance would calculate the benefit after the Division of the Budget has certified the size of the surplus and directed a portion to the Rainy Day Fund. Average projected benefits are included below:

Surplus

Recipients

Average Tax Credit

$100M -$500M

868,000

$589

$500M-$1B

1,063,000

$943

$1B-$1.5B

1,322,000

$1,129

$1.5B-$2B

1,668,000

$1,188

$2B-$3B

2,125,000

$1,405

In order to provide real property tax relief to everyday New Yorkers, this initiative would also require local school districts to do their part to control spending. Therefore, the circuit-breaker proposal includes a provision to encourage fiscal responsibility at the local level by pressing localities to keep spending and property tax bills under control.

I have long stated my commitment to bringing New York’s fiscal house back in order. And just like all of you, I am working hard on your behalf to control our State’s spending. It is now up to the Legislature to enact these proposals that will generate surpluses for years to come, and will bring property tax relief directly to you and your families.