Property taxes would be cut by $1.5 billion in 2007-08 under a proposal announced Tuesday by Gov. Eliot L. Spitzer.
The average homeowner's property tax bill in Erie County would be cut by about $400 in the coming fiscal year, beyond what is already planned under the state's STAR tax-reduction program. The cut, which targets middle-class taxpayers, would especially benefit families making less than $60,000 annually.
As he prepared to present his first budget proposal today for New York State, Spitzer vowed to continue the cap on rising Medicaid expenses for local governments, provide a new push to consolidate "too many, too expensive and too burdensome" layers of local government and provide a big surge of funds to distressed cities, including Buffalo.
Spitzer said his proposed budget will contain $2.8 billion in savings, driven in large part by cuts in spending for health care that the hospital and nursing home industries -- warning of further strains on care for patients -- are already preparing to fight.
State Senate Majority Leader Joseph L. Bruno of Rensselaer County, the Legislature's top-ranking Republican, on Tuesday was already challenging what he knows of the new governor's fiscal ideas. The GOP leader warned Spitzer he must understand that compromise will be the key to success in budget negotiations this year.
"I hope that this governor understands that drawing a line in the sand isn't going to get a result," Bruno told reporters after a meeting in which he and Spitzer addressed the annual gathering of the New York State Association of Counties.
The State Senate, which, along with the Democratic-led Assembly, must approve a final spending plan, is raising concerns that Spitzer's education plan will cost suburban districts large amounts of school aid and that his cuts in spending for health care would hurt a system already trying to grapple with a new law that calls for shutting down or merging dozens of hospitals and nursing homes.
The Senate leader said many people believe that the state should be "catching our breath" and waiting to see how the hospital consolidations shake out before Spitzer proposes a new round of health care cuts.
"All of us are concerned about the escalating costs, . . . but we're going to make sure people have access to health care," Bruno said.
Bruno also said Spitzer's tax-cut proposal would take too long to kick in. Instead of phasing in $6 billion worth of cuts over three years, as Spitzer wants, Bruno said, the full amount should occur in the next two years. Under the Senate proposal, $2.6 billion in property tax cuts would take effect in the coming year, instead of Spitzer's $1.5 billion.
The proposed cut in property taxes would add to the STAR program but target middle-class homeowners -- those who, the governor said, "have the least ability to pay" ever-increasing property taxes. He said property taxes in the state have risen by 42 percent on average over the last five years, while wages have gone up by an average of 12 percent.
Under the Spitzer proposal, the greatest benefits for upstate property owners would go to those making less than $60,000 annually; and for downstate, those making less than $80,000.
Upstate, the tax cut would be phased out completely for families earning more than $235,000 a year, the governor's aides said.
Under the current School Tax Relief Program, or STAR, Erie County homeowners on average get a $526 credit. Under Spitzer's proposal, that would rise to $947. The Spitzer administration provided no information for other Western New York counties.
The governor told county leaders that the tax-cut proposal would provide immediate relief for homeowners as a means to stem the impact from the loss of residents to other states with a lower cost of living.
Over the longer term, Spitzer proposes ideas -- many promoted during his campaign to cut the costs of local government and, therefore, provide money for further county and school tax relief. They include:
* An end to so-called unfunded mandates, Albany programs that require local governments to pay a share.
* Retaining a Pataki-era deal to cap future growth in Medicaid costs for counties.
* An additional $500 million over four years to distressed cities -- but tied to accountability on how the aid is spent. The aid might be keyed to such standards as improved fiscal health or property tax cuts.
* Reducing the number of local governments in the state -- currently 4,200 -- by offering financial incentives to distressed communities or those demonstrating that consolidation efforts can cut school taxes.
* Ending the costly practice of incarcerating parole violators who are former state prison inmates in county jails. The state reimburses the localities just a fraction of the actual cost.
"The days when New York balanced its budget on the backs of its counties, cities, towns and villages are over," Spitzer told the county leaders.
His message was warmly received.
"I felt like a kid in a candy store with a fistful of 50s," Erie County Executive Joel A. Giambra said. "If Eliot Spitzer was governor three years ago, Erie County would not have had a budget problem."
Erie County Legislator Michele M. Iannello, D-Kenmore, said Spitzer "brings a sense of security to local governments that we haven't felt in a long time."
Buffalo Mayor Byron W. Brown said, "I'm looking forward to Buffalo and other upstate communities doing well in the governor's budget."