|Local Taxation for Services Not Provided to Sub-Units of Local Government|
The Mandate: Towns encompass all territory within New York State except for cities and Indian reservations. As a result, every individual (except for those living in a city or on an Indian reservation) lives in a town. A village is a municipal corporation within a town, and its residents are residents and taxpayers of both the town and the village is which the town is located. Of the 932 towns in New York State, 421 of them contain at least one village.
As a general rule, town services are to be financed by taxes levied on the whole town, including village residents within the town, unless state statute requires or permits an expenditure to be paid from taxes levied only on the unincorporated area outside of the village. Consequently, village taxpayers must pay for all town services -- regardless of whether they receive or benefit from such services -- unless a statute requires or permits otherwise.
A classic example of this mandate, and one that garners significant attention, concerns village taxpayer liability as it relates to the town highway budget. Highway Law § 141 prescribes that a town's highway budget consist of four items:
Pursuant to Highway Law § 277, property owners in a village are exempt from the levy and collection of town taxes for Item #1. However, all town residents, including the residents of a village, are responsible for the expenses associated with Item #2. With respect to Items #3 and #4, the town board has the option to finance those expenses as part-town charges. Not surprisingly, town boards frequently impose these charges town-wide even when the town does not provide snow removal or highway services within the villages. Additionally, if village taxpayers are exempt from paying for the repair and improvement of town highways, it only seems logical that they should also be exempt from paying for the purchase and maintenance of road machinery and the cost of snow removal on those same town highways.
The Cost: New York's property taxpayers are already subject to one of the highest local tax burdens in the nation. Requiring village and city residents to pay for services they do not receive results in a duplication of taxes and unfairly adds to that burden.
The Solution: Support legislation prohibiting town and county governments from taxing property owners within sub-units of local government for services not provided to such property owners.