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Friday, September 19, 2014

Our taxes are sky-high, but the tax cap will help
(Page 2 of 3)
Unfunded state mandates. This is the big one. For decades, New York state has passed law after law trying to protect against every possible evil and to encourage all good things for every group and individual imaginable. It’s nice to do that, but we simply can’t afford it. That’s why we spend the most on health care, education and public safety. Those expenses are predominantly a function of state law. That’s why every local government in New York has such high property taxes compared with other states.

Finally, the most addressable problem is that we’ve stopped growing. No new growth means no new revenue. To highlight this point, compare the sales taxes collected in Nassau with the sales taxes collected in Suffolk over the past decade. Suffolk, which is three times the land mass of Nassau and started growing about 15 years after Nassau did, has collected over $1 billion more in sales taxes in the past 10 years.

Nassau County stopped growing in about 1990, when it became suburban sprawled. (That’s one of the reasons we need cool downtowns, which I wrote about in my first column three weeks ago.) Suffolk kept growing until the recession hit in 2008, and it will grow again until it runs out of developable land.

So, when you compare Long Island to South Carolina, or Arizona, or Florida, and you hear the stories about those states’ lower taxes, remember these few points. They probably have waste, fraud and abuse. Everyone does, and we need to constantly fight it. They most likely have fewer governments. They are getting more federal and state aid because they aren’t as “rich” as we are. (We do have lots of rich people, but most of us, 90 percent of us, aren’t rich.) They don’t have as many unfunded state mandates as we do — but just wait until they’ve been around for a few more decades. Finally, they’re growing like crazy. New growth — like we had in the 1940s through the ’70s — means new income taxes, sales taxes, property taxes, mortgage recording fees, etc. With all that new revenue, they don’t need to raise property tax rates.

But let’s see how they’re doing in 20 or 30 years.
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