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The Legislature, by a vote of 11-3, once again asked the State Legislature to approve legislation which would authorize the County to increase the county mortgage recording tax by 0.25% if it so desires.  (Legislators Mike Lane, Leslyn McBean-Clairborne, and Frank Proto voted no; Legislator Nathan Shinagawa was excused.)

The County first requested the home rule authorization in 2009, but the request was embargoed by Senate leadership late last session, along with all other local home rule requests, after having been approved by the Assembly.  In discussions and correspondence with members of the State Legislature, the County has repeatedly urged that the home rule authority be granted.  The action only requests the authorization to consider the increase; if granted, the Legislature would still need to vote on whether or not to increase the mortgage tax.

Lansing's County representative Pat Pryor has taken some heat for her support of the proposed mortgage tax rise.  Critics say it would negatively impact the housing market in Tompkins County and drive home buyers to neighboring counties.  Pryor said she was against the nearly 6% rise in county taxes this year, but explained she ultimately voted for it because less than 1% of that rise would go to programs the county actually wanted with the rest going to fund state mandated programs.  She says the mortage tax adjustment could have mitigated the property tax rise.

Tompkins County Legislator Pat Pryor"The potential revenue from this increase would add about $900,000 to the County's income," she says.  "$900,000 represents the opportunity to decrease the County's tax levy by about 2%.  For example, last year if we had been able to apply the $900,000 to the levy we could have reduced the levy to about 3% instead of almost 6%."

Budget chair Jim Dennis said it would take a 2.4% increase in the property tax to produce the $900,000 in annual revenue that a quarter-percent increase in the mortgage recording tax would generate.  The increase, if adopted, he said, would raise the total mortgage tax to 1%, and that most upstate counties already have mortgage recording taxes of 1% or more.  Pryor also notes that our neighboring counties are already at the level that we will be at if this proposal passes.

"I fully understand that there is concern about the potential impact on the housing market," Pryor says.  "However, the increase in the recording tax would be about $250 (two hundred fifty dollars) on an average priced home in Tompkins County.  Since the tax is imposed at the time of closing and is typically included as a closing cost, it is difficult for me to imagine that someone who is going to spend well over $100,000 (average home is $130,000-$160,000) would change their mind about buying a home because of an added $250.  I'm not saying that it would never happen, but I think it is highly unlikely."

While supporting the renewed authorization request, Legislator Pam Mackesey cautioned she didn't know whether would vote for an increase in the tax if the Legislature gains the power to do so.  Legislator Kathy Luz Herrera said she's reluctant to place too much pressure on the mortgage tax, but called the approach a pragmatic and realistic response to tough financial times.

"I am, in general, not in favor of increasing the tax burden.  I pay taxes, too," Pryor adds.  "We are already heavily taxed and I think we should be looking for ways to provide needed services more efficiently and consolidate where possible to lessen the burden.  I also think we should examine each and every program to determine if it is truly needed and if it is achieving the goals it professes to be working toward.  I do believe, even though we made serious cuts to the County budget last year, including eliminating 26 positions, that we can, should and will do more to downsize in this year's budget cycle.  However, I also think we need to look seriously at our revenue streams and, when it makes sense, ask for increases that will further the goal of lessening the tax burden on all taxpayers.  I believe that the mortgage recording tax proposal is one of those times."

If granted, the County's authorization to impose the tax would expire as of December, 2014.

County Legislators also called for the State Legislature to temporarily extend the State's tax surcharge on the wealthy  to provide additional revenues to the state and mitigate the substantial negative effect of proposed cuts in the Governor's budget on the most vulnerable New York residents.  The final vote was unanimous (with Legislator Nathan Shinagawa excused), after three proposed amendments were debated regarding whether the Legislature should advocate temporary or permanent extension of the surcharge.  The surcharge, enacted by the State on a temporary basis in 2009, increased the tax rate on those earning between $300,000 and $500,000 from 6.85 to 7.85%, and those earning more than $500,000 to 8.97%.

The Legislature's action notes that refusal to extend the surcharge is projected to cost the state $4 billion in lost revenue in the 2012 fiscal year, and that the Governor's budget disproportionately targets spending reductions for programs that serve the most vulnerable populations.  Legislator Frank Proto was one who observed that the State's budget problems were a long time in the making and won't be resolved overnight, and that under the circumstances something is needed to help address the immediate problem.  Legislator Peter Stein also said he could only support the continued extension as a temporary measure since the State faces an absolute disaster at this point, without money to provide basic services.

"As we struggle with the budget we look at reduction of costs along with any opportunities for increased revenue as a way to keep property taxes down," Pryor says.  "I guess I'd have to say that ultimately it is the effort to keep property taxes down while still maintaining services that are essential that motivates us."

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