A sweeping tax bill passed by Congress last week will severely reduce the tax deductions available to Long Island residents, which has many locals spending the final days of 2017 trying to pre-pay their taxes.
The bill was slammed by Long Island politicians across the political spectrum.
“This legislation is a disgrace and a ‘punch-in-the-gut’ to middle-class families throughout Long Island and Queens,” Rep. Tom Suozzi (D-Glen Cove) said in a statement.
While no Democrat in Congress supported the bill, a handful of Republicans joined them in voting against it. The 191 Democrats were joined by 12 Republicans in opposing the bill in the House of Representatives including Lee Zeldin (R-Shirley) and Peter King (R-Seaford).
Eleven of the 12 Republicans, the only members of their party in either the House or Senate vote against the bill, represented either New York, New Jersey or California.
They opposed the bill for a similar reason: the deduction of state and local tax deductions, which will hit those three states particularly hard. Deductions for state individual income, sales and property taxes will be capped at $10,000.
Zeldin called it a “geographic redistribution of wealth” during an interview with CNBC.
Peter King said in a statement that the $10,000 cap was not enough and claimed that the bill would reduce home values by as much as 10 to 15 percent.
“The bottom line is that while most of the rest of the country will be getting a tax cut, it will be paid for by Long Island residents who will be getting a tax increase,” King said.
North Hempstead Receiver of Taxes Charles Berman said last week he had been contacted by numerous property owners, asking if they could pre-pay their 2018 General property tax bills in 2017 to receive this year’s tax deduction.
Residents will have that opportunity now that County Executive Ed Mangano signed and released the 2018 General tax warrant
Berman said the second half 2017/2018 school taxes can also be paid anytime this month. Last week, Gov. Andrew Cuomo signed an emergency executive order removing legal barriers to the pre-payment of 2018 property taxes.
Residents have crowded the offices of town tax receivers to pay general taxes — an effort that may be in vain because the Internal Revenue Service has not determined if 2018 local tax prepayments will be deductible in 2017 federal tax returns.
On Wednesday, Suozzi announced that he had sent a letter to the IRS requesting that Long Island taxpayer be allowed to prepay their 2018 federal property taxes.
“It’s vital that the IRS give the hardworking people on Long Island some peace of mind heading into the new year by allowing them to prepay their property taxes,” he said in a press release.
Suozzi noted that his district has more than 250,000 residents that use the state and local tax deductions.
East Hills Mayor Michael Koblenz said village taxes cannot be paid early.
In an email to residents, Kobenz said he had received confirmation from Cuomo’s counsel, Alphonso David, that the executive order on prepayment of taxes did not apply to villages such as East Hills with a June 1 to May 31 fiscal year.
Outgoing County Comptroller George Maragos went further in questioning the prepayment of taxes.
“HOLD YOUR MONEY!” Maragos tweeted Sunday. “Consult your accountant. Unlikely the IRS will allow deduction in 2017 & worse may trigger audits.”
If home prices fall on Long Island, as many were predicting, local school districts will likely watch their budgets shrink as well.
Blank Slate Media reached out to several local school districts, but most school officials said they were still unsure how greatly their funding would be impacted.
“[The budget] will be indirectly affected,” said Mineola Public Schools Superintendent Michael Nagler. “We’re going to try to continue to get the lowest level possible while maintaining the programs that we currently have. I don’t think that we’re going to see any public reaction until the actual tax returns go in and people see how the cap on the state and local tax deduction affects them individually.”
Not everyone felt the change in taxes would have a negative impact. Ann Conroy, the president of the Long Island division for Douglas Elliman Real Estate, tried to put a more positive spin on things.
“I think everybody is listening to the doom-and-gloomers,” she said. “It probably will create a pause before someone makes a decision, but I don’t believe it will stop anybody from buying.”
Conroy said that those on the fringe of being able to buy a house might wait, but said that there were still more buyers than sellers on Long Island and that the area will always be a prime destination for home buyers.
Plus, she argued, if the tax bill does create more jobs like its supporters contend, then more people will need homes.
“I‘m willing to take the risk of being wrong but I don’t think I am,” she said. “I’m more concerned about the [Federal Reserve] increasing interest rates.”