S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4757

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                            February 8, 2013
                               ___________

Introduced  by  M.  of  A.  ENGLEBRIGHT -- read once and referred to the
  Committee on Ways and Means

AN ACT directing the education department and the department of taxation
  and finance to study  the  fiscal  impact  of  granting  local  school
  districts  authority to implement an income tax surcharge; and provid-
  ing for the repeal of such provisions upon expiration thereof

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Declaration of findings and legislative intent. The legis-
lature hereby finds that the real property tax  is  an  inequitable  and
regressive form of taxation wherein low- and middle-income taxpayers pay
a  disproportionate percentage of their income in property taxes.  Under
such a system, ability to pay is not a factor  in  calculating  property
tax  liability.  Rather,  the  present system relies on an often-archaic
system of property tax assessment that bears no  relation  to  household
income.  Further,  such system of taxation has priced many people out of
the housing market or forced them to sell their homes. In addition, such
a taxing mechanism has a particularly negative impact on senior citizens
and those living on a fixed income.
  The legislature hereby finds that the  collection  of  local  property
taxes  constitutes the majority of education funding in school districts
throughout the state utilizing such a system.  Presently,  approximately
fifty-seven percent of school funding is derived from localities. As the
state  continues  to  reduce  its share of the education-funding burden,
school districts have been forced to increase their tax  rates,  thereby
further increasing the unfair burden of such tax system.
  The  legislature  further finds that gross inequities exist throughout
the state in terms of school districts' abilities to raise money  local-
ly.    Under  the present system, wealthy and "property rich" districts,
specifically those areas with commercial  property  and  other  entities
with  high assessments, have a tremendous advantage over underprivileged

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08793-01-3
              

A. 4757                             2

and "property poor" districts. In some districts, state aid  constitutes
less  than  ten  percent of the school budget. This occurs because these
localities have the ability  to  raise  property  taxes  without  unduly
burdening the community.
  The legislature also finds that continued reliance on the property tax
has  contributed  to legal challenges to the state education system as a
whole.
  The legislature finds that a tax scaled to income would  be  a  fairer
and  more  progressive  form  of taxation under which residents would be
taxed based on their ability to pay.
  Therefore, the legislature declares that the property tax, as a  means
to  fund  education,  contains  gross  inequities and that a potentially
fairer system, in income-tax surcharge, is worthy of study.
  S 2. The education department is hereby  authorized  and  directed  to
assist  the department of taxation and finance in preparing a comprehen-
sive study  documenting  the  fiscal  implications  of  authorizing  the
reduction  of  real  property  taxes  levied  for the purpose of funding
education costs through granting local school districts  the  option  to
implement an income tax surcharge.
  Such  study  shall  consider the fiscal impacts on a broad spectrum of
incomes, as well as calculate  the  effects  of  any  state  income  tax
reductions on tax receipts under such a surcharge. Such study shall also
consider what level of surcharge would have to be imposed to bring about
a dramatic reduction in the property tax. This study shall also document
the  effects  of  such a change on school districts, taking into account
their relative wealth in terms of residents' income, property tax  base,
level  of  state education funding and other relevant factors.  In addi-
tion, such study shall be so designed as to enable individual  taxpayers
to  determine the effects of any change on their income tax and property
tax liabilities. The results of such study shall  be  submitted  to  the
legislature  no later than one year following the effective date of this
act.
  S 3. This act shall take effect immediately and shall remain in effect
until the ninetieth day after submission  of  the  report  specified  in
section  two  of  this  act,  when  upon  such  date  it shall be deemed
repealed; provided that the commissioner of taxation and  finance  shall
notify  the  legislative bill drafting commission upon the submission of
such report to the legislature in order that the commission may maintain
an accurate and timely effective database of the official  text  of  the
laws  of  the  state  of  New  York  in  furtherance of effectuating the
provisions of section 44 of the legislative law and section 70-b of  the
public officers law.