Elena Villafane: The tax cap is squeezing villages — and Albany needs to fix it

Across Nassau County, villages are facing a financial bind that grows tighter each year. As president of the Nassau County Village Officials Association and mayor of Sea Cliff, I hear the same concern from every mayor and trustee I speak with: The state’s 2 percent property tax cap no longer reflects economic reality, and is undermining the ability of local governments to provide essential services.

The premise of the tax cap sounds simple: Limit the annual growth of the property tax levy to 2 percent or the rate of inflation, whichever is lower. In practice, this has become a structural problem for villages, because almost all major cost drivers rise far faster than 2 percent per year.

Local governments operate in the same economy as every small business and household. In recent years, insurance premiums have soared at double-digit rates. Pension and health care obligations are set at the state level, not locally, but villages must pay them. Utility and fuel costs swing dramatically with global markets. The cost of asphalt, concrete and construction materials continues to accelerate. Salary growth for police officers, who make up the largest portion of the budget for many villages, is determined largely by collective bargaining agreements, which are impacted by state mandates, not local discretion.

In Sea Cliff, the impact of these rising costs is real and immediate, affecting our ability to provide essential public services. Recently we contemplated the purchase of a new fire truck, a critical piece of lifesaving equipment that cannot be postponed, the cost of which has risen dramatically in recent years. This investment, vital for our community, is far beyond what we can responsibly absorb under the tax cap. A fire truck isn’t a luxury or a wish-list item; it is an essential investment in public safety.

Combined with escalating state-driven expenses and other top-down mandates, the cap makes meeting basic needs increasingly difficult.

In other words, villages are being legally capped at increases that don’t even come close to covering expenses passed down directly from the state itself.

The most frustrating aspect of the cap is that Albany preserved almost all of its own authority over local government costs while limiting our ability to raise the revenue needed to meet those obligations. Villages in Nassau County don’t spend money on luxury services. We pave roads, keep drinking water safe, operate sanitation services, maintain parks, staff local police departments and protect quality of life. These are not optional.

Municipalities are often told to “tighten their belts,” but we’ve been doing that for over a decade. We continually deliver more with less by consolidating services, sharing equipment, modernizing operations and securing grants wherever possible. There is no more belt-tightening to be done. There’s no fat to cut. Despite best efforts, costs beyond our control continue to outpace the arbitrary tax cap.

The law also misleads residents into thinking their property taxes are capped, when in fact only the village portion is. School district taxes, which make up the largest share of the bill, have separate rules. Villages, a small fraction of the overall levy, face the greatest constraints.

This creates unfair pressure on the level of government closest to residents, which is responsible for paving streets, clearing snow, responding to emergencies and maintaining infrastructure, while Albany limits our ability to fund these necessities.

The solution is not to abandon fiscal discipline. Local officials understand the burden property taxes place on homeowners — we live here, too. But the tax cap framework must be realistic, flexible and tied to the actual costs villages face. It should reflect true municipal cost drivers rather than relying solely on the consumer price index, allow for a separate, realistic cap for essential infrastructure projects, and provide multi-year budgeting flexibility. This would enable villages to plan responsibly, rather than making narrow, short-term decisions that ultimately hurt taxpayers and local services.

Nassau County’s villages are among the strongest examples of local democracy. Residents choose villages for responsive, community-level government, but that system can’t function if Albany imposes fiscal expectations that ignore economic reality. The 2 percent tax cap may have made sense a decade ago, but today it is strangling the very municipalities entrusted with safeguarding our communities. Albany must reform this law so villages can remain safe, sustainable and vibrant.

Elena Villafane is the mayor of Sea Cliff and president of the Nassau County Village Officials Association.