Gov. Cuomo is taking action to mitigate the impact of the Trump/Republican tax cuts which are funded largely by eliminating the deductibility of state and local taxes, and will wind up costing New Yorkers an estimated 20 percent more, and likely depress home values while making it much more difficult for empty-nesters and retirees to afford to keep their homes, while raising the level of resentment at school, park, library, and all the locally controlled special districts and local governments.
The Republicans have accomplished quite a coup, because the impact of eliminating the deductibility of state and local taxes will not be felt until 2019 when people make out their 2018 taxes, well after the mid-term elections, while during the year, their calculation is that the euphoria over finding an extra $100 a month that the middle-class American family of four earning $60,000 get as their tax cut “bump” will be enough to make voters keep the Republicans in control.
But Cuomo sees the damage that will be done – the constraints on state and local governments to deliver services – and immediately signed an executive order making it possible to pre-pay 2018 property taxes by Dec. 31 in order to take the deduction for this year.
And while this happens during the Christmas-New Year’s holidays when many personnel are off, it stands to reason that people can send in their payments and let the local governments figure out how to properly account for it. But you still have the record.
Meanwhile, Cuomo is continuing to target property taxes, which has been a focus since he first came to office and instituted the property tax cap.
Now he will use the Republican tax scam to continue this crusade. New Yorkers, he stated, pay as among some of the highest in the nation, with the typical taxpayer paying 2.5 times more in property taxes than income taxes.
Westchester, Nassau and Rockland rank among the five highest counties in the nation for the cost of property taxes and in terms of property taxes paid as a share of home value,13 of the 15 highest-taxed counties are in New York, primarily upstate, with Wayne, Monroe and Cattaraugus among the highest in the country.
But this is no different, really, that blue states having higher taxes than red states – it is a different philosophy of government working on behalf of all its citizens. You only have to compare the states’ ratings for public education, health care and poverty to see the difference between red and blue: the top 10 states based on percentage below poverty line are all red states (Mississippi, 21.9 percent versus New Jersey with 11.1 percent).
People move to communities like Great Neck, Manhasset, Roslyn knowing full well the property taxes are high because of the quality of public education.
Addressing property taxes has been a big part of Cuomo’s administration, going back to implementing a punitive tax cap which checkmates local control.
Even now, he makes these local services – which are the closest in terms of accountability to the people – an object of derision, noting that residents pay 2.5 times more to local governments than to the state.
But the state does not pick up our garbage, plow snow, supply drinking water, treat sanitation, light the streets, police our homes and businesses or educate our children.
Our everyday quality of life is locally administered. The state’s role is to help equalize services between rich and poor communities, as they do with state aid to schools (Great Neck gets less than 5 percent of its school budget from the state; New York City gets 50%).
Cuomo, in his State of the State, will propose making the county-wide shared services panels, permanent, where the state commits to matching the recurring property tax savings implemented in year one.
In the first year, 34 counties submitted nearly 400 projects with more than $200 million in savings.
Cuomo is now proposing that state funding for local government performance aid will be conditional on the continuation of shared services panels. The Executive Budget will include a $225 million appropriation as a state match for savings from shared services plans.
The governor also would continue the state’s local property tax relief program (for communities that stay below the tax cap); that will provide an average reduction of $380 in local property taxes to 2.6 million homeowners this year.
Cuomo is also proposing to reduce local health insurance costs by easing the rules on creating local health consortia.
Over the past 10 years, employee benefit costs for local governments have grown at an average of 5.2 percent annually and now account for more than 20 percent of local government spending.
Pooling local governments health plans into healthcare consortia will leverage the buying power of many governments and lower costs, save local tax dollars, and not affect employee’s plans.
“You know that I’ve worked very hard, and the legislature has worked very hard and successfully to reduce the income tax. Everybody in the state of New York pays a lower income tax rate than the day I was elected. They then just raised income taxes 20 percent. I pass a 2 percent property tax cap. They, in one fell swoop, raise property taxes 20 percent. I wouldn’t be surprised, although I hope it doesn’t happen, that home values drop in New York. It’s going to increase incentives for people to leave New York. It’s not just New York, although New York is at the top of their hit list, it’s New York, it’s California, and there’s all the blue states. That’s why I say this is an economic civil war. This civil war is not north and south over the issue of slavery. This is an economic civil war, pitting red states against blue states. And when you hurt New York, it’s not that New York has only Democrats that live in New York. We have Republicans who live in New York. We may not have a Republican United States Senator, but, we have Republicans. So, they were indiscriminate in their harm. If you’re a Republican who happens to live in a blue state, you also get hurt.
“My job as Governor of New York is to protect the people of New York and that’s what I intend to do. In general, we’re going to look at the state tax code, both in substance and form, and look for ways to now redesign our state code in response to this Federal assault, and we’re in the process of that now.”
Meanwhile, New York faces a $4 billion deficit at the same time the Trump/Republican administration plans to cut funding to the state, even before the billions that the state stands to lose because of federal changes to taxes and healthcare. These are truly challenging times.
