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Property tax cap issue debated, may be linked to rent control

With Monday marking the opening day of the 2011 legislative session, officials already are dueling over whether to link the growth of property taxes to an unrelated matter as a way to bring along reluctant New York City legislators.

None of the sides, including Gov. Andrew M. Cuomo, has released any legislation to cap the annual growth in property taxes, but a push is on to get the tax issue linked to reauthorizing a state law that controls rent hikes in nearly 1 million New York City apartments.

"Things get linked all the time. Property taxes are important in one place. Rent regulations are important in another place. It sounds like perfect gumbo to me," said Assemblyman Jeffrion Aubry, a Queens Democrat.

"In the history of Albany, that would not be the strangest marriage," said the lawmaker echoing the beliefs of many New York City legislators.

The Legislature's top Democrat insisted there is no linkage between lawmakers embracing a property tax cap and protections for New York City apartment renters. But Assembly Speaker Sheldon Silver said the "concept of rent regulation is the very same" as efforts to give homeowners some more certainty about the level of their property taxes.

The Assembly Democratic conference, which is dominated by New York City lawmakers, has increasingly been pressing for linking -- an old Albany style of legislating -- the property tax cap and rent control issue.

In New York City, property taxes are relatively low because the city relies more on a separate income tax for revenues. The property tax cap issue is more near and dear to downstate suburban and upstate lawmakers. New York City's rent control laws -- which keep low annual rent hikes for millions of city residents -- expire this year.

Enter linkage.

"I think what we want is something that keeps people in their homes," Silver said of a tax cap, "that gives people certainty as they go through their years to know that they will be able to afford their homes."

Cuomo has proposed an annual cap on the growth of local and school district property taxes at 2 percent, or 120 percent of the inflation rate, whichever is lower. He has not proposed specific legislation, so one of the big fights under way is what kinds of expenses would be exempt from the cap.

Cuomo said Monday he would not introduce a tax cap bill if he is able to strike a "quick" deal with the Legislature. If there is no deal soon -- he did not define a timetable -- Cuomo said he will engage New Yorkers to try to move the Legislature his way. The tax cap faces a far easier lift in the GOP-controlled Senate, where members in both parties already favor the move.

Cuomo said he does not believe the property tax cap and rent control should be linked, but should be dealt with "on their own merits."

Behind the scenes, there also is a growing effort by some lawmakers to keep in place an income tax surcharge that expires soon -- worth more than $1 billion a year in revenues to the state -- on people making more than $200,000 annually. The tax expires in the coming weeks, and Cuomo has insisted his position is the surcharge will expire.

But Silver said lawmakers will await the governor's 2011 budget submission on Feb. 1 to determine "whether we can afford to provide that tax relief to the wealthy."

Cuomo said he considers the expiration of the tax "a new tax and therefore I'm against it."

Cuomo had lunch at the governor's mansion Monday with Silver and Senate Majority Leader Dean Skelos in what amounted to entry into his first real three-men-in-a-room session.

The three men broadly discussed a number of issues, including the tax cap and talks under way to strengthen the state's ethics law for government officials.

"I like the fact that the governor brings you together and talks about getting things done," Skelos said.


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