Who could have imagined it would be the Blue (majority Democratic) states fighting the federal government over states rights, traditionally a Red (majority Republican) cause, indeed, associated with the Civil War and that very ignoble cause, and used to battle back against climate action and immigration reform climate action and immigration reform, food safety and legalized marijuana use.
In just the past few days, New York State led a coalition of four states (New Jersey, Connecticut, Maryland), suing the United States, Treasury Secretary Steven T. Mnuchin and the IRS over curtailing SALT (State and Local Tax) deductions as part of the Republican tax cut to compensate for cutting $1.5 trillion in revenue from the wealthiest and corporations.
The states are charging this is an unconstitutional violation of the 10th (states rights) amendment and 16th amendment, that the federal government has no right to force fiscal policy on states through its tax policy.
It charges the Republicans with targeted at doing political harm to the 12 Democratic states which also happen to be the biggest donor states. New York sends $48 billion more to the federal government than it gets back. It will increase the federal taxes New Yorkers pay by $14.3 billion in 2018 alone and an extra $121 billion between 2019-2025.
The consequence of restricting the SALT deduction is that those services funded through local property taxes (school districts, water authorities, sewage treatment, parks and libraries) will have the impact of a 30 percent increase in tax when the state actually imposes a 2 percent tax cap.
Localities will be loath to fund improvements. Real estate values will fall. “And if you see real estate values come down, we will have a problem with banks, funding for school districts, and have potential devastating consequences,” Gov. Andrew Cuomo told reporters on a press call announcing the lawsuit.
“The law flies in the face of centuries of precedent, which establishes constitutional limits on the federal government’s ability to use its tax power to interfere with the sovereign authority of the states,” Cuomo said.
And it’s political. “Secretary Mnuchin said the purpose of the law was ‘to send a message to the state governments that they have to get their budgets in line,’” Cuomo said. “It was a number and a tax selected to effect what they wanted. You think it was a coincidence that it impacted 12 states, all Democratic, all states Trump lost, all that don’t have Republican representative in Congress? .. That puts democratic states on different footing. That’s why I’ve said this is economic civil war – red versus blue, Democratic versus Republican, and penalizing those states. But these are co-equal sovereigns.”
“New York will not be bullied. This cap is unconstitutional – going well beyond settled limits on federal power to impose an income tax, while deliberately targeting New York and similar states in an attempt to coerce us into changing our fiscal policies and the vital programs they support,” said Attorney General Barbara D. Underwood.
“We will not allow partisans in Washington to hurt our people or interfere with our policies. We’ve filed suit against this unconstitutional attack on New York and our state’s fundamental rights — because we won’t stand by and let Washington pick the pockets of New Yorkers.”
Underwood is really busy because just a few days later, she and Cuomo announced New York together with five other attorneys general were suing the Trump administration to block its efforts to punish so-called “sanctuary” jurisdictions by putting immigration-related conditions on federal law enforcement grants.
This would cost New York $9 million in funding, a total of $25 million for the six states. In the suit filed in the United States District Court for the Southern District of New York, the coalition argues the Trump administration’s conditions trample the right of states and localities to set their own law enforcement policies and that the Justice Department lacks the authority to impose these new conditions.
“With the lawsuit filed today, New York and other states are sending a message loud and clear that we will not stand for intolerance or hate and we will not be bullied with disgraceful political tactics, let alone ones that are blatantly unconstitutional,” Cuomo declared. “New Yorkers should know that we will continue fighting against this shameful administration and its unjust policies at every turn and will not rest until every New Yorker, regardless of where they come from or how they got here, is treated with respect and dignity.”
In the wake of Donald Trump’s apparent indifference to the continued threat of Russia and other actors undermining our elections, New York is implementing new measures to secure its elections infrastructure and protect against foreign interference.
“The groundbreaking cybersecurity initiative we launch today will harden and protect our election infrastructure from the very real threat of foreign meddling,” Cuomo said. “While the President has abdicated his responsibility to defend this country and left our electoral system open to sabotage by foreign adversaries, New York is fighting back and leading the way.”
The state has also instituted disclosure requirements for political ads on social media.
Countering the Interior Department opening the entire coast to off-shore drilling (possibly torpedoing New York’s plan for off-shore windpower, enough to power millions of households and be the equivalent of a nuclear power plant), the state is advancing its own bill, while threatening to sue the federal government.
New York has also acted with other states to uphold the objectives of the Paris Climate Accord, and to form a regional coalition to combat gun violence.
And anticipating Trump’s anti-women’s rights nominee for the Supreme Court, Brett Kavanaugh, who will overturn Roe v. Wade at the first opportunity, Cuomo is pushing the Republican Senate to codify women’s reproductive rights into state law.
