Task Force on School Finance and Real Property Taxation

In 1975, a State Court of Appeals decision (Hellerstein v. Assessor, Town of Islip, 37 NY 2d 1, 1975) declared illegal New York's system of classified property tax assessments. New York, as did most states, had a system that placed a larger share of property tax burden on businesses by assessing such property at a higher percentage of value than residential and agricultural property. The 1975 ruling mandated full value assessments on all property and many communities in the state began to comply with the ruling. In particular, the new assessments increased residential property taxes in many of these communities and homeowners across the state soon asked the legislature to address this problem. In 1978, the Legislature passed a moratorium on reassessments until it had a chance to study how to protect homeowners from large property tax increases while at the same time complying with the requirements of the Court of Appeals decision. The Speaker of the Assembly created the Task Force on School Finance and Real Property Taxation to explore options for assessing property taxes. The Task Force published a report in September 1979 entitled, The Legislative Response to the Property Tax Crisis: An Analysis of Public Policy Approaches to Classification. This report outlined the impact of full property assessment and recommended establishing a classification system which would allow several classes of people to pay varying percentages of full assessment. This would allow residential property owners to pay less taxes than commercial property owners. In 1979, the Task Force also cosponsored with the Senate Finance Committee a series of five public hearings to gather opinions on options for a classification system for property taxation.