The Tax Shift

Tax shifting is the practice of one government shifting its taxes, costs and/or revenue shortfalls onto a lower level of government. Stopping New York State's penchant for tax shifting is the first step in taking control of what many New Yorkers would say is our state's number one problem: the oppressive and regressive real property tax.

Just about any way you measure the property tax burden in New York, we rank at or near the top compared to all other states. Tax shifting is one of the reasons for this dubious distinction. As highlights, the state-local relationship in New York has been characterized, historically, by a pattern of the state (1) underfunding aid to municipalities, and (2) using state mandates to dictate inefficient ways in which local governments must provide services.

Beginning in 1995, when the state's financial picture began to turn around, New York's local governments received intermittent increases in unrestricted aid, both across-the-board, as well as through the creation of new aid categories, primarily Supplemental Municipal Aid. Most of the significant increases were targeted to large cities and were not allocated via any statutory formula. In addition, cities and villages received consistent and measurable increases in aid between 2006 and 2009 - increases which undoubtedly helped to slow the growth in local property tax levies.

Unfortunately, since SFY 2008-09, cities (outside of NYC), villages and towns have experienced a $50 million reduction in AIM funding and New York City's AIM funding, totaling $328 million, was completely eliminated. The State's lack of investment in its local governments – while simultaneously imposing a property tax cap – has resulted in daunting fiscal challenges for New York's municipalities. We need to learn from our mistakes in the early 1990s when the State made the decision to balance its budget by cutting local aid. This short-sighted approach quickly put numerous cities into fiscal distress, some of which were taken over by control boards, and most of which still receive less aid today than they did prior to those cuts (when adjusted for inflation).

AIM aid represents less than 1% of the state budget, but is an important piece of local government budgets throughout the state. urges the Governor and state legislators to increase this relatively small investment by the state so that fiscally distressed New Yorkers will be protected from the punishing effects of property tax increases while still receiving the municipal services they want and need. also focuses on the other avenue for shifting taxes: state mandates. Despite the promise made by the Governor and the State Legislature in 2011 that meaningful mandate relief would accompany the property tax cap, efforts to achieve such relief have been marked by much talk and little action. For every mandate local officials have sought to have repealed, a special interest group that benefits from such mandate has stood in the way of reform and enhanced cost effectiveness at the local government level. Now, more than ever, New York and our property taxpayers cannot afford to pay for the hundreds of millions of dollars in costs caused by state mandates. describes the real impact numerous state mandates have on the capacity of local officials to manage government costs consistent with the desires of their constituents. Our Web site allows visitors to review a comprehensive listing of nearly fifty state mandates pertaining to workforce costs, local taxation and other non-property tax revenues, government operations and procurement. It is time for New York to put an end to the practice of dictating local policy without having to be accountable for the local tax impact of such policy.

We encourage you to spread the word about tax shifting, get involved and make sure your voice is heard. The future of our communities and our state depends upon it.