April 3, 2006

Rebate checks to arrive in fall

I'm normally happy to receive unexpected checks. There's one large exception, however: those checks that come with a larger cost later. Sometimes those are the 'credit protection' plans, where credit card companies give you $2.50 now in exchange for a lot more over time. Sometimes they're credit offers, which at least come with clearly disclosed interest rates. Then there were the federal tax rebate checks a while ago, that seemed mostly to burn off cash that might have been used to reduce the federal debts future taxpayers don't look forward to inheriting.

Now state government appears to have gotten into the same game. New York has lots of debts, and has driven more and more expenses to the local level. There's a little bright news this year, so what should we do? Pay down the debt? Reduce tax rates? No! Of course not! Let's send out property tax rebate checks, and make sure to do it in the fall, just before elections.

I'd heard that the Bloomburg campaign in New York City had spent about $100 per vote they received. It seems that the state legislature is inclined to spend a lot more than that, using state money to pay for it. State Senator Jim Seward just sent out a lovely color flier (B & W PDF, 375KB) celebrating how much typical taxpayers in Tompkins County will get back as in checks over the next few years. I like the idea that senior citizens might see $276 this fall and non-seniors might see $201, but...

Sending out checks - not to mention full-color fliers announcing their potential arrival - costs a lot of money. $750 million for the rebates alone, apparently. The budget is already increasing the state's debt by $11.7 billion, despite a surplus of $4 billion. Now, a lot of that debt is for projects that would reasonably be bonded, but does it really make sense to send out checks with one hand while signing up for bonds with the other?

I'm happy to see that someone in the Elmira Star-Gazette gets it:

Perhaps rebate checks are wonderful for those who receive them. Certainly, rebates are fantastic for those who institute them. New York politicians can now claim action on tax reduction.

But, according to Pulteney Town Supervisor Bill Weber, a rebate is not a rate reduction; it is an inefficient way to try to do the right thing.

Weber believes that Keuka Lake will one day be too expensive for longtime residents to keep their properties, because as property values rise, which they are doing around Keuka, so too go property taxes.

Rebates are not the answer to that situation; they are only a finger in the hole of the dike, and it's the smallest finger trying to plug what Weber believes is a growing-larger hole.

To Weber, it seems it would be easier to just lower the property tax rate.

New York State's finances are strange and complicated, but if the state wants to lower property taxes, as Weber suggests, it might make sense for the state to take on a larger share of school taxes, for instance, rather than adding layer after layer of STAR exemptions and rebates. I might actually be able to figure out what my tax bill means that way, and we could have a much clearer discussion of revenues and expenditures. That might even lead to clearer budget processes, at every level, and opportunities for voters to see where money comes from and where it goes to. Hmmmm....

Posted by simon at April 3, 2006 5:55 PM in
Note on photos


Mary St.Laurent said:

Bill Weber sold us the Volvo in 1977. You probably don't remember him. I think he had two sons a few years ahead of you and Andrew. Mom