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Two cheers for tax cap; Measure will benefit New Yorkers; Cuomo must veto pension borrowing

New York stepped off the path of decline on Friday, when the State Legislature approved a property tax cap that will help upstate staunch its long-term hemorrhage of jobs and population. It's a change that comes with undeniable risks, but they are risks that are necessary following decades of irresponsible governance from Albany.

The deal caps property tax increases at 2 percent or the inflation rate, whichever is lower, while exempting some costs, such as growth in employee pensions. It is scheduled to last for five years, but is tied to renewal of New York City rent controls, which should ensure its continuation but, we hope, won't prevent its revisions, if needed.

The legislation caps the overall amount of revenue that localities, including school districts, can raise through property taxes. The question -- and the fear among opponents -- is if it will erode the quality of services provided to New Yorkers, including students. It's not an unthinkable consequence, but there are actions that can be taken now to reduce the chance of it occurring.

Albany has to relieve local governments and school districts of some of the unfunded mandates that have helped drive taxes skyward. Although Albany did implement a 3 percent cap on increase in the county share of Medicaid costs a few years ago, Medicaid still accounts for almost all of the Erie County property tax levy. A 3 percent increase in those costs is almost certain to bust the 2 percent property tax cap. In addition, a relief valve is included in the bill: Voters can exceed the cap if 60 percent vote to do so.

But acknowledging that issues could arise doesn't diminish the need. Albany has shown itself to be all but incapable of restraining its urge to dig into New Yorkers' pockets. It did pass an unusually austere budget this year, but there is no real reason to believe it is anything but an aberration. Absent an artificial device such as the cap, what would happen once the economy improves?

Indeed, Albany is already trying to defeat the cap. Lawmakers passed a separate bill that would allow school districts to borrow up to 125 percent of their actual growth in employer-paid pension costs without having to bother asking for voters' approval. That's not mandate relief, it's mandate postponement. It kicks the can down the road to future New Yorkers, long a favorite tactic of Albany's spendthrifts.

Gov. Andrew M. Cuomo, whose insistence and leadership on a tax cap was instrumental in its passage, has indicated he may veto the borrowing measure. He should. If the tax cap proves genuinely onerous, Albany can seek to make responsible changes later. It can't be allowed to make irresponsible changes at the outset.

This is important. If employers are to believe that upstate is a responsible place to do business, then they have to have confidence that their taxes will be kept in check. The same goes for homeowners who are finding it increasingly difficult to keep pace with the nation's largest cumulative tax bills. To continue on that path is to ensure upstate's uninterrupted decline.

It took far too long, but New Yorkers should thank Cuomo and, the pension borrowing bill aside, the leaders of the Legislature. It's too soon to call this the start of a new day for New York's overtaxed residents, but assuming Cuomo vetoes the borrowing gambit, it is at least a large step in the right direction.

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