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Interview with Ron Deutsch, Omnibus Consortium
May 6th, 2009
Background: Formed in 2008, the Omnibus Consortium is made up of about a dozen organizations, including unions, property-tax reformers, fiscal watchdogs and education advocates who support the Omnibus Tax Reform Bill -- legislation introduced by Senator Liz Krueger that would institute a "property tax circuit breaker" in New York. We interviewed Ron Deutsch who serves as coordinator for the Consortium.
Q: You are currently working for a group called the Omnibus Consortium. Who is in the consortium and what are your goals?
A: The Omnibus Consortium is a coalition of local property tax-reform groups, fiscal watchdogs, education advocates and unions that are calling upon Governor Paterson and the State Legislature to enact the Omnibus Property Tax Relief and Reform Act.
Members of the Omnibus Consortium have been working together over the past 11 months on legislation that would reform the property tax system to provide immediate relief to overburdened homeowners through creation of a property tax circuit breaker — with the long-term goal of creating a fair and equitable tax system by shifting costs from the local level to the state.
Our most immediate goal is to get the Legislature to enact S 4239 (Sponsored by Senator Liz Krueger and is the Circuit Breaker portion of the Omnibus Bill) before the end of the current session in June. The leaders of both houses and the Governor committed publicly at a March 30th press conference to pass a circuit breaker bill to provide immediate property tax relief. For a summary of the bill please go to www.omnibustaxsolution.org.
- Susan Zimet, Ulster County Legislator, Chair Ulster County Blue Ribbon
Commission on School Funding and Tax Reform Agenda
- Rich Gerentine, Ulster County Legislator, Ulster BRC
- John Whiteley,
Tri-County Tax Reform, NYS Tax Reform Coalition
- Roberta
Whiteley, Tri County Tax Reform, NYS Tax Reform Coalition
- Robert
McKeon, TREND (Tax Reform Effort of Northern Dutchess County)
- Bernetta
Calderone, Taxnightmare Coordinating Committee - Women's Issues Leader for
Correction Dept., Ulster BRC
- Tara
O'Connor-Alisse, Taxnightmare.org Coordinating Committee -Ulster BRC
- Sam Davis, Putnam
Reform Group, Taxnightmare.org Coordinating Committee
- Gioia Shebar,
Coordinator, Taxnightmare.org, Ulster BRC
- Bill Hecht, Cayuga County Property Tax Reform Coordinator
- Frank Mauro, Fiscal Policy Institute, author of the Omnibus Property Tax
Relief and Reform Bill
- Ron Deutsch, New
Yorkers for Fiscal Fairness, Omnibus Consortium Coordinator
- Melinda Person,
NYSUT
- Billy Easton,
Alliance for Quality Education
- Ellie and Bill Trumpbour, N.Y. Farm Bureau
- Jason Angell,
Center for Working Families
- Victor Bach, Community Service Society
Q: Why does your group favor a "circuit breaker" rather than a property tax cap as recommended by the Property Tax Commission?
A: The Property Tax Commission favors a tax cap, circuit breaker and mandate relief. Our group favors the "circuit breaker" approach because we realize it is the only mechanism that can deliver immediate relief to overburdened property tax payers across the state and is the only politically and fiscally responsible approach. The biggest problem with the property tax is that some people across the state are paying excessive amounts of their income (10-30 percent or more in some instances) in property taxes and can no longer afford to do so and keep their homes.Only a circuit breaker will address this problem.
A circuit breaker is effectively a "cap" on the amount of property taxes paid by an individual homeowner, as opposed to a "cap" on what school districts can levy. The circuit breaker approach is gaining steam with the public as well as the Legslature. When asked by multiple polling outlets whether they prefer tax caps or circuit breakers the public chooses circuit breakers. Tax "caps" have proven to be very damaging to local school districts in other states that have enacted them and we do not need to make those same mistakes in New York.
Q: Describe how the circuit breaker system your group proposes would work.
A: Significant work has been done in the Legislature regarding the development of a circuit breaker bill by Assemblywoman Sandra Galef and Senator Betty Little. The Omnibus Tax Reform bill builds upon their wonderful ideas to create a relatively generous middle class circuit breaker (limiting a person’s property taxes to a fixed percentage of their income) that would be phased in over a period of four years. Governor Paterson and the Legislature recently eliminated the STAR rebates checks in the budget as one means of closing our state’s large budget deficit.
The omnibus bill proposes to use the money from the elimination of the Star Rebate Program to finance its proposed reforms starting next fiscal year. The move from the rebate checks program to an effective middle class circuit breaker would not have a financial implication for the state until SFY 2010-11 and, therefore, would in no way detract from the use of this money in the current fiscal year for deficit reduction.
|
Calendar Year |
Household income |
Circuit Breaker would cover property taxes over the following percentages of household income |
The refundable credit would cover the following percentage of property taxes over the percentage limit: |
|
2009 |
$100,000 or less |
9% |
70% |
|
2010 |
$100,000 or less |
8.5% |
70% |
|
2011 |
$100,000 or less |
7.5% |
70% |
|
2012 and beyond |
$100,000 or less |
6% |
70% |
The omnibus bill’s circuit breaker would limit the cost of the proposed middle class circuit breaker by adopting the Galef-Little bill’s proposed 5-year residency requirement. The costs would also be phased in by gradually increasing the program’s income limits and by phasing in coverage for renters during the second and third years of the phase-in.
By replacing the STAR rebate check program with an effective middle class circuit breaker, the omnibus bill would replace a program that provides relatively small checks to virtually all homeowners in the state with a circuit breaker credit that will target more meaningful relief to those homeowners who are truly overburdened by their property taxes. The multi-year "phased in" approach is designed to be sensitive to the state's fiscal situation while recognizing that homeowners most overburdened by unreasonable levels of property taxation are part of the overall financial crisis and need help immediately.
During the first year, 2009, resident homeowners with household income of $100,000 or less who have lived in their homes for at least five years will be eligible for an income tax credit equal to 70% of the amount by which the total ad valorem taxes on their home exceeds 9% of their household income.
Ad valorem taxes, in this case, are any taxes based on the value of one's home. These include all taxes levied by school districts, counties, towns, villages, and fire districts, as well as any special districts, as long as the tax is based on the assessed value of the home. Taxes levied on everyone in equal amounts (such as those for water and sewer in most cases) are “non ad valorem” and are not included.
EXAMPLE Year One:
Household income = $50,000
Taxes paid on home = $7000
$50,000 x 9% =
$4500
Difference (i.e., the excess over the 9%) = $2500
70% of Difference
= $1750, the amount of the income tax credit
During the second year, 2010, eligibility is still limited to those with household income of $100,000 or less, but the applicable income percentage drops from 9% to 8.5%, thereby increasing the benefit.
EXAMPLE Year Two:
Household income = $50,000
Taxes paid on home = $7000
$50,000 x 8.5% =
$4250
Difference (i.e., the excess over the 8.5%) = $2750
70% of
Difference = $1925, the amount of the income tax credit
During the third year, 2011, for those with household income of $100,000 or less the applicable income percentage drops from 8.5% to 7.5%.
Q: Too often Albany passes reforms with little or no consideration of their cost. What will it cost to initiate and administer your circuit breaker system?
Q: Who opposes the circuit breaker solution and what are the chances they'll be able to stop or sabatoge it in this year's session?
1 Response to “Interview with Ron Deutsch, Omnibus Consortium”
Sorry, comments are closed for this article.
May 7th, 2009 at 03:28 PM THIS IS AN EXCELLENT PRESENTATION BY MR. DEUTSCH OF THE ONLY SOLUTION THAT WILL BE THE BEGINNING OF THE END OF CRIPPLING PROPERTY TAXES. IT IS FAIR, THOUGHTFUL, AND -UNLIKE OTHER POLITICAL RATHER THAN PRACTICAL IDEAS- IS READY TO GO TO WORK AS SOON AS ALBANY SAYS "YES!' THIRTY YEARS IS LONG ENOUGH FOR THE POLITICIANS TO GET THEIR ACTS TOGETHER ON THE WORSENING PROPERTY TAX CRISIS. lET'S GO GUYS....S4239...OMNIBUS RELIEF AND REFORM BILL...THIS SESSION!