NY renters and owners could see a tax break next year
Gov. Andrew Cuomo on Tuesday embraced a proposal for a two-year freeze on what he called crushing local property taxes.
Under the proposal from Cuomo's tax commission, the state would subsidize the cost of the freeze in 2014 with the first state budget surplus since before the Great Recession. Cuomo credited the surplus to holding state spending increases to under 2 percent during his three years in office.
"It's good news that we are in a position to, frankly, have this luxury of deciding how to invest this surplus because we did what we had to," Cuomo said from the commission's Long Island presentation at the State University of New York at Old Westbury.
The commission recommended $1 billion, about half of the state budget surplus, be used to freeze local property taxes for two years, but only for municipalities and school districts that abided by the state-imposed cap of 2 percent growth in budget spending. In the second year, only municipalities and school districts that took "meaningful, concrete steps toward finding permanent structure savings" by sharing the cost of services with other entities or merging.
The commission highlighted the need to let a temporary income tax surcharge on New York's wealthiest residents to expire as planned in 2018. Cuomo and the Legislature have extended that $2 billion-a-year income tax increase twice after Cuomo and Senate Republicans promised to let it end because it was a "job killer."
The commission also supports accelerating the end of a business utility tax. That temporary increase was implemented during the fiscal crisis and extended by Cuomo and the Legislature until 2018.
The report further recommended tax breaks for employers and specifically for manufacturers. The commission called for New York to reduce its estate tax, which has long been a goal of former Republican Gov. George Pataki, whom Cuomo chose as co-chairman of the commission. Pataki said cutting the estate tax will encourage small-business owners and farmers to stay in New York without fear that their families will be "clobbered" by the estate tax when business are passed on within the family.
Advocates for the working poor were concerned the broad freeze for homeowners and tax breaks for employers might not help low-income New Yorkers enough in continuing hard times. Emblematic of their concern is the proposal to give up revenue by cutting the estate tax.
"The idea that we're cutting taxes for deceased millionaire when we have the worst income inequality in the country and historic levels of homelessness and childhood poverty seems profoundly unfair," said Michael Kink of the progressive group Strong Economy for All.
Cuomo said he will more carefully review the commission's proposals and bring them to the Legislature. Lawmakers could adopt some or all of the ideas in the session beginning in January, the start of the election year for Cuomo and the lawmakers.
"My colleagues in Senate Democratic conference have already been urging for many of the recommendations included in today's commission report," said Senate Democratic leader Andrea Stewart-Cousins.
Cuomo's priority of holding the line on some of the nation's highest property taxes come as New York City Mayor-elect Bill de Blasio plans to press state legislators to pass a tax hike on wealthy city residents. The Democrat wants the city tax increase to fund his signature campaign promise of providing universal pre-kindergarten programs.
Assembly Speaker Sheldon Silver emphasized the need for a "circuit breaker" to make sure property tax relief hits lower income households more. He also noted the state needs additional funding for schools, pre-kindergarten programs, and a proposal to help immigrants pay for college.
In Albany, so many related proposals can often provide an opportunity for a legislative deal.