Albany’s Costs Are Driving Local Tax Hikes

Every fall, New Yorkers hear a familiar headline: Another town has pierced the tax cap. The reaction is almost automatic: Town Hall must be spending too much.

That answer is too easy. Across New York, local governments are running into the same problem at the same time. Schenectady has proposed a property tax levy increase of roughly 43%. Rotterdam is looking at about 34%. Niskayuna is considering 18.5%. Albany is weighing 15%, even as the city is expected to receive state budget help.

When that many municipalities are struggling with the same budget math, residents should ask a broader question. Is the problem really local overspending, or has the state pushed costs onto towns and cities that cannot reasonably be absorbed under a 2% cap?

Albany spends more, then tells towns to make do

Gov. Kathy Hochul signed a state budget of about $277 billion this year, up roughly 7%, more than the states of Florida and Texas combined. Local governments, meanwhile, are expected to keep levy growth within the tax cap formula, commonly described as 2%.

Families know that math does not work forever. When health insurance, electric bills, groceries, repairs and labor costs rise faster than income, eventually something has to give.

Before a town paves a road, collects trash or maintains a park, it must pay the bills it cannot simply vote away. Those include health insurance premiums, state-required pension contributions and benefit obligations for public employees. Then come higher costs for garbage disposal, utilities and labor contracts.

Local officials have few easy choices. They can cut services, reduce staff, rely on reserves or raise revenue. Drawing down surplus funds may soften the blow for one year, but it can also weaken long-term finances, affect bond ratings and increase future borrowing costs.

Albany has not provided enough aid to fully offset those costs. Instead, towns and cities are left trying to solve a statewide affordability problem inside a local tax cap.

Nassau County offers a different model.

The towns of Hempstead, North Hempstead and Oyster Bay operate under the same state tax cap and face the same inflationary pressures as other communities. But they also have something many local governments do not: a share of county sales tax revenue.

When residents and visitors shop, eat out, buy cars or hire contractors, part of that sales tax revenue helps support Nassau’s towns and cities. That gives local governments a recurring source of money beyond property taxes.

The result is simple: Every sales tax dollar shared with a town is one less dollar that has to come from homeowners.

That is why Nassau County belongs in this discussion. County Executive Bruce Blakeman has said New York should stop asking residents for more money and rethink how it spends the money it already collects.

Sales tax sharing will not solve every municipal budget problem. But Nassau’s experience shows property taxes do not have to carry so much of the load when local governments have a broader, more stable revenue base.

Affordability has to mean more than slogans.

Hochul has made affordability a central political message. But affordability cannot be limited to rebate checks, campaign slogans or promises made during budget season. It has to mean lowering what families are required to pay, year after year.

Long Island residents already send significant tax dollars to Albany and often feel they get too little in return. That frustration crosses party lines. Families want a plan that controls spending, eases pressure on property taxpayers and gives local governments a fairer way to pay for basic services.

Before voters go to the polls, they should look closely at where their tax bills begin. Local governments may collect the money, but many of the costs driving those bills start in Albany.

Nassau County offers a model worth studying. If state leaders are serious about affordability, they should reduce the pressure on property taxes, share revenue more effectively and stop passing state costs down to local taxpayers.