Nearly 400 taxing entities.
More than 300 special improvement districts that collectively spend nearly 19 percent of towns”™ property tax revenues.
One of the nation”™s three highest property tax burdens.
A 67 percent increase in countywide property taxes in the same decade county population rose 5 percent.
Countywide school taxes up nearly 10 percent from 2005 to 2006.
Westchester County”™s public sector urgently needs reform, and its business community is ready to take the lead in a collaborative alliance to begin that long overdue process, the Westchester County Association”™s Property Tax Reform Commission concluded in its initial report released last week.
The commission”™s initial findings say an “outmoded, inequitable and highly inefficient governmental tax system” has created a property tax crisis in the county that “poses a real and economic threat that needs to be immediately addressed,” association President William C. Mooney Jr. said last week. The overgrown and discretely operating public sector must begin to adopt a more holistic private-sector business model, he said, and the business community hopes to be the “catalyst” for that change.
Formed in January, the 60-member commission, representing a cross section of Westchester businesses and private nonprofit groups, divided its investigative work among task forces that focused on elementary and secondary public education; county government; municipal and other taxing entities; and tax administration and valuation. The Edwin G. Michaelian Institute for Public Policy and Management and its director, Brian J. Nickerson, assisted in the research.
The commission, headed by Richard French, recommended that an alliance of public- and private-sector stakeholders explore six potential areas for reform: overlapping areas of government; state pension and benefit policies; school taxes; special districts; privatization of infrastructure; and a transparent and equitable tax system.
Among its key findings, the commission reported a plethora of governmental taxing entities ”“ 383 cities, towns, villages, school districts and special districts in Westchester County ”“ often provided duplicate and sometimes ineffective service for taxpayers. Municipalities have failed to collaborate to eliminate duplicate and redundant taxation, the commission found.
The issue of centralization versus decentralization is at “the very core” of that problem, as public officials have failed to resolve “a longstanding need to define the role of county government in relation to town and village authorities,” the commission reported.
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Noting that county government employs about 6,000 workers and public schools in Westchester pay more than 20,000 workers while local municipalities employ thousands more, the commissioners said there are “almost endless possibilities for reform” throughout. “The costly mandates for public-employee pension benefits and health care for most are clearly in need of reform,” they said.
Mooney last week said pension and health-care benefits policies for public employees are “completely out of sync with today”™s economic realities.” The commission suggested that government join in the private sector”™s shift to pension plans wherein employers make defined contributions and employees pay a certain portion.
Pointing to another area of needed reform, special districts in towns, the commission said fire districts in Westchester, which operate as autonomous public corporations, alone levied more than $50 million in taxes in 2005.
Calling it a major issue for the region, commissioners said the alliance also needs to address property tax as a basis for funding public education.
Among Westchester municipalities, public school funding on average accounted for 69 percent of a property owner”™s tax bill. While total school enrollments were basically flat, total school taxes in the county rose 9.7 percent from 2005 to 2006, the commission found. If school taxes had kept pace with the inflation rate that year, taxpayers would saved $143 million.
At the core of a review of public school funding “is the question of whether property ownership as opposed to, for example, income, is a fair and adequate basis for assessing school tax burdens.”
Noting a “deeply entrenched system” of outdated assessment rolls in most municipalities, commissioners concluded, “Westchester is uniquely dysfunctional in the administration of the property tax.” With poorly maintained property records and “largely incomprehensible” tax bills, transparency in property tax matters “is wholly lacking in most of Westchester,” they reported.
Commercial property owners appealing an assessment often must wait 10 years or more for a resolution in a court system deluged with more than 5,000 appeals. “It is not uncommon for tax refunds to be in the millions as a result of the vast time periods covered by these tax appeals, which necessarily drives school, town and county tax rates ever higher,” the commission reported.
The commission also recommended discussions begin on privatizing the region”™s aged infrastructure, including the county airport, parks and roads. The municipal bond market, long a source of capital for governments, could afford “fresh opportunities” to private fund managers, commissioners said.
With elected officials lacking the “political courage” to address the “glaring and mostly unexamined shortcomings” of the property tax system, advocacy groups such as the Westchester County Association have an even greater obligation to spark public discourse on the issue, the commission concluded.
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