New York state nears deal to cap property tax
The Stuyvesant Town and Peter Cooper Village apartment complexes in New York City. The sprawling 110-building Manhattan apartment community, owned by Tishman-Speyer and partner BlackRock Realty, took another step towards default after a court ruled the companies had improperly deregulated apartments and increased rents.
Jeremy Hobson: To New York state now where legislators appear to have a deal to cap property tax increases. Supporters say the cap is vital to keeping homes in the Empire State affordable. But similar moves in other states have slashed public revenues.
Sally Herships reports from New York.
Sally Herships: Upstate New York is home to the highest property taxes in the country, and they've been going up by a lot every year. Columbia's Bill Eimicke says this hurts the economy.
Bill Eimicke: We're losing jobs, we have an out-migration of graduates of all our universities, because it's expensive to buy a house.
In the decade up to 2009, New York state property taxes rose over 5 percent a year. Governor Andrew Cuomo says he has a deal to cap the annual increase at a rate of 2 percent. But property tax is the primary source of revenue for New York schools. Wharton professor Robert Inman says if the state wonders what the impact of the plan would be, it should look at what's happened in California since that state passed its Proposition 13 in the late '70s.
Robert Iman: California fell from one of the top three or four best-funded school systems in the country, to now I think they're ranked 48th.
Supporters of the New York plan say it's more flexible than Prop 13. Communities can vote to override the cap to raise school funds.
In New York, I'm Sally Herships for Marketplace.