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Four municipalities in Erie County have adopted a two-tier property tax system that, in practice if not in concept, turns out to be unfair to businesses. In an area struggling to secure a strong employment base, such an unfair tax system works against the common good.

In the two-tier system, a class of properties called homestead (one-, two- and three-family homes) and non-homestead (everything else) pay a pre-determined proportion of a community's taxes and, hence, have differing tax rates. The problem in practice is that businesses not only pay at a higher tax rate at the start than homeowners, but also that the gap tends to keep widening over time.

The Town of Tonawanda is one of the places using the two-tier system. In his proposed budget for the coming year, Supervisor Carl J. Calabrese has used some budget-making devices to ease what could have been yet another blow to business. However, for all the supervisor's creativity, the issue of unfairness remains.

Calabrese has put much more of the town's spending into special district budgets where the two-tier system does not apply. As a result, what loomed at the start as a drastic widening of the gap has been substantially softened.

Even so, while the budget holds the line on taxes for homeowners, it includes a 2.79 percent increase for the businesses. It worsens a situation in which businesses were already paying property taxes at a rate 58 percent higher than the homestead class.

Before they finish the budget, Tonawanda officials ought to consider using a provision of state law that allows a local government the latitude to unilaterally change the share of taxes paid by each class within certain confinements. The provision allows further adjustments that are not in Calabrese's budget -- adjustments that could point toward greater fairness.

As it stands, the supervisor has been wise to go as far as he did, but it's not far enough.

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