IBO's measure of local taxes deals with the variety in local government organization by summing taxes imposed at each level of local government (fire districts, school districts, villages, cities, and counties) within each county in the state. The city's mix of taxes is much broader than is found elsewhere in the state, where local governments rely almost exclusively on the property tax and sales tax. With its mix of taxes, the city's property tax burdens need not be as high as in jurisdictions where that tax accounts for the vast majority of revenues since this will be offset by the burden of other taxes not available to most local governments.
To capture homeowner tax burden, our local tax measure includes property taxes imposed directly on homeowners. For New York City and Yonkers, the local personal income tax (PIT) falling on resident homeowners is also included. (An alternative measure also adds local sales taxes falling on homeowners.) Tax burden relates the amount of local taxes (the numerator) with a measure of the capacity to pay (the denominator). Our denominator is the adjusted gross income of homeowners in each county.
IBO found that for 1997, the combined burden of property tax and PIT on resident homeowners in the city was $7.26 per $100 of income, compared with $6.78 per $100 of income in upstate counties, and $6.90 in the city's suburban counties. Treating the city as a single county, it ranked twentieth among the 58 counties in the state, with a burden that was 6 percent above the average for the rest of the state.
For more information about this issue please contact George Sweeting, IBO Associate Director, at (212) 442-8642.
