» Articles from October 2005
A Promising PledgeFor the Campaign Season
As election campaigns kick off this month for some 100 open town board seats in our region, most candidates agree that preserving farmland and providing affordable housing are among the issues foremost on voters’ minds, but few, if any, have offered specific proposals to finance these popular though costly initiatives.
There is, however, an effective, fair and timely policy that could raise tens of millions of dollars each year to support land conservation and expand home ownership in Columbia and northern Dutchess counties. The “real estate transfer tax,” a small levy on all property sales in a town that is reserved to fund housing and preservation efforts, has been a surefire campaign pledge and a successful catalyst for community improvement in many states and a handful of New York towns.
The transfer tax, once approved by town voters in a special referendum, can quickly fortify a town’s planning objectives by providing an annual source of funds to purchase development rights on farmland and finance programs that make home ownership more affordable. Though authorization from our state government is required to hold the referendum and enact the tax, senior legislators in Albany have said they would support requests from individual towns seeking to launch a transfer tax referendum.
As part of a political platform, the tax has popular advantages: 1) it shifts most of the financial burden to the housing developers and high-end property sellers who are reaping the greatest profits from the current real estate boom; 2) it can exempt the sale of lower-priced homes, say below $200,000, from the tax entirely; 3) it gives local voters the final say in drafting the details of the law; and 4) it can raise significant amounts of money that often attract even larger matching funds from other public and private sources.
A transfer tax of 2% ($2,000 on every $100,000 of sales value) would have raised about $10 million for towns in Columbia County last year alone, according to data supplied by the County Clerk’s Office. Leveraging the towns’ contribution with matching funds from state, federal and private sources could have raised the total amount of funds available to more than $25 million.
In the northern Dutchess town of North East, the tax would have raised some $350,000 last year, enough to attract substantial matching funds and demonstrate a strong political commitment to addressing voters’ demands.
As a starting point for widespread adoption of the tax, candidates should pledge to voters that, if elected, they will press their town board to request state permission for a transfer tax referendum.
“It is definitely among the options the Ghent Town Board should be pursuing,” said John Mesevage, Democratic candidate for a board seat in the Columbia County town of Ghent.
“It’s a very interesting idea to talk through on the board,” echoed Bonnie Hundt, who is running for an open seat on the Amenia Town Board in northern Dutchess County.
Many farming advocates fear that state legislators, buckling under pressure from the homebuilding and real estate industries, will reject towns’ requests to craft and implement their own transfer tax laws. Indeed, the Republican-controlled State Senate this summer killed a bill, passed by the Democratic majority in the Assembly and supported by Governor Pataki, that would grant blanket authorization to any municipality seeking to enact a transfer tax earmarked for land preservation.
But top Republican lawmakers, even those skeptical of the statewide authorization bill, seem willing to secure state approval for individual towns requesting “home rule” laws such as the transfer tax.
“If a town requests a home rule measure, it is rare that I would not be able to support it,” said State Senator Stephen M. Saland, a senior Republican legislator who represents Columbia County and much of Dutchess County. “That’s my job. I don’t sit in judgment as a higher authority telling municipalities what they should and should not do… Balancing issues like land preservation and affordable housing is best done more closely to home.”
“All it takes is a town board resolution, and we’d participate in writing the actual state legislation,” said Republican Assemblyman Patrick Manning, a key sponsor of the statewide enabling legislation bill that died in the Senate.
“I don’t have any reservations about supporting individual requests,” for a transfer tax referendum, added Manning. “It’s a quality of life issue that transcends everything else.”