New York's Tax and Debt Limits and Classified Property Tax Assessments: Time for a Constitutional Amendment?

This Comment addresses the proposed changes in 1981 to New York’s Real Property Tax Law, which would change the law that states all property must be assessed for taxation at its full value. The author posits that this change may have the unintended effect on the manner in which local government borrowing and taxing powers are restricted by the state constitution, thus possibly substantially reducing the amount of revenue local governments may obtain by borrowing and taxing. It first analyzes the effect of a modification of the assessment standard on New York’s constitutional borrowing and taxing restrictions, which were adopted when illegal fractional assessment was the rule throughout the state. It then goes on to describe these tax and debt restrictions, which limit the amount of revenue that local governments may obtain from these sources to certain percentages of local property wealth. The article further describes property tax assessment systems, including the classified assessment system declared illegal in New York in Hellerstein v. Assessor, Town of Islip, which required the Town of Islip to assess all real property at its full value in compliance with the law. It goes on to discuss the interaction between recently proposed classification legislation and the tax and debt limits. Finally, the author considers the possible effect of the classification legislation upon antecedent municipal debts.