Local Real Property Transfer Taxes
March 16, 2007
The Business Council continues to oppose this legislation which would give statewide authorization to towns to impose a real property transfer tax of up to 2%, with the proceeds to be used by towns for open space preservation purposes. The bill requires any such tax to be approved by local referendum.
The Business Council opposes this legislation for several reasons.
- The high cost of housing is already
having an adverse impact on economic
development efforts in New York, especially
downstate. According to Office of Real
Property Services data, in 2004, median
housing prices were $575,000 in Westchester,
$435,000 Rockland, $427,000 in Nassau,
and $360,000 in Suffolk counties, respectively.
These costs, in addition to high property
tax bills, are making it increasingly difficult
(and expensive) for employers to recruit
additional skilled employees to these areas.
On Long Island, our members tell us that
the cost of housing is one of their major
problems in staff recruitment. By definition,
this bill authorizes taxes that would increase
the already sky-high cost of fifty percent
of all houses in these areas!
- These transfer taxes would increase
the price of commercial and industrial property
as well, adding to the already high cost
of doing business in New York, and making
it that more difficult to create and attract
new employers to New York State. Business
are already paying nearly half of the existing
$400 million state real property transfer
- These new township-level
real property transfer taxes would be imposed
on top of an existing state transfer tax,
and on top of similar taxes already imposed
by more than 30 counties, plus the cities
of New York and Yonkers.
- Any effort to create a new tax and
spend structure at the local level should
be contingent upon actions to reduce current
costs, re-prioritize current spending patterns,
service consolidation and other similar steps.
New York already has the second highest level
of state and local spending (and taxation)
among the states, behind only Alaska. Combined
state and local spending in New York is already
50 percent higher than the national average
for states; compared with other key states;
our combined spending is at least $2000 per
capita, or 33%, above Connecticut, Massachusetts
and California. High tax levels have contributed
to New York's anemic economic growth
over the past decade.
- New York State
has made, and continues to make, significant
investments in open space protection. The
Protection Fund, financed through the existing
state-imposed real property transfer tax,
has an Open Space Account that receives about
$67 million annually. Under last year's
budget, $30 million went directly for state
land acquisitions, while the remaining $37
million was used for regional land conservation
programs, including acquisition and open
space protection. In addition to these annual
EPF land acquisition funds, the 1996 Clean
Water/Clean Air Bond Act provided another
$150 million in state funds for land acquisition
and farmland protection. According to the “Trust
for Public Land,” no state owns a higher
percentage of land than does New York.
- The Department of Agriculture and Markets implements two additional programs that make state funds available to local governments for farmland protection programs. The Department awards county farmland protection planning grants, and grants for the purchase of development rights. In 2001, the most recent date reported by Ag & Markets, $16 million in grants were made for municipal purchases of farmland development rights, with $12 million, or nearly 70 percent, of these funds going directly to towns for local protection purchases.
In summary, The Business Council recognizes the important role of open space protection in maintaining a high quality of life in New York. However, we believe New York's ongoing financial commitment to open space protection is sufficient, especially considering the financial condition of state and local governments. We also believe it is contrary to the economic health of the state to increase the cost of residential and business property purchases. For these reasons, The Business Council respectfully recommends against approval of S.3836.