We are in a situation in which wages and prices may be stagnant for some time to come. So a property tax cap that merely limits increases to 2.0% per year would mean higher and higher property taxes compared with the incomes of the people who were paying them. Worse, because of the pension enhancements of recent years, pension spending is set to soar. A property tax cap that exempts pension spending and debts, like the one in New Jersey, is no cap at all. It is a fraud.

What the leaders of the state legislature are going to want, I would imply from recent comments in the press as quoted below, is to defuse the issue while having taxes continue to soar, as the pay and benefits of those who keep the in office continue to rise, and the standard of living of everyone else who isn't a senior citizen continues to fall. What will be offered is symbolic change, a "victory" for the new Governor. But it won't take long for people to see that nothing has changed, and to become even more confused, angry, and open to demagoguery.

Local government is where the rubber meets the road in the public sector, the level of government were most public services are directly provided. This post compares local government revenues for the United States, New York State, different parts of New York State, and selected other states in Fiscal 2007, the year of the most recent Census of Governments conducted by the U.S Census Bureau. The attached spreadsheet contains data for revenues, and for expenditures and debts — which will be discussed separately to keep post lengths reasonable. The data is for all local governments in a given area added together, to adjust for varying local government organization in different places. The measure of revenues, expenditures and debts, for the most part, is the amount per $1,000 of the income of area residents. This adjusts for the level of per person income, and the level of population, in different places. It may be understood this way: New York City spent $9.18 for every $1,000 city residents earned on its police force. So for every $1,000 earned by city residents, they may have spent $250 on housing, $120 on food, $30 on utilities…and $9.18 on the police as part of their taxes. Other adjustments have been made to make the comparison between places as fair as possible. If the reader hasn’t already, he or she should read this post with background data and data on state governments.

The data show in FY 2007 (as in past years) local government revenues absorbed a much higher share of area residents’ income in all areas of New York State, compared with the U.S. average, the average for New Jersey, and selected other states: Connecticut, Massachusetts, California, Illinois, North Carolina and Texas. The difference in revenues was accounted for by relatively high local taxes –sales taxes, individual income, corporate income, and other non-property taxes (such as real estate transfer taxes) in New York City, and high sales and property taxes in the rest of the state. Although state taxes are only modestly above average in New York, in part because local governments receive majority of sales tax revenues here, the combined state and local tax burden as a share of personal income was 47.0% above the U.S. average in New York City, 26.8% above average in the Downstate Suburbs, 17.5% above average in Upstate Urban counties, and 24.0% above average in Upstate Rural counties.