With a host of Long Island Democratic politicos and two busloads of older adults from Rockville Centre’s Sandel Senior Center seated before him, Gov. Andrew Cuomo appeared at SUNY Old Westbury on Feb. 28 to tout legislation that would make the state’s 2 percent property tax levy cap permanent and reduce taxes for the middle class.
The governor has found support for the plan in Long Island’s Democratic Senate delegation. Sens. Todd Kaminsky, of Long Beach; John Brooks, of Seaford; and Kevin Thomas, of Levittown, appeared alongside Cuomo after the rally as a show of support.
“It’s extremely important that we are here today,” Kaminsky said. Reducing taxes at the state and local levels, he said, “is a simple message, but it’s just something that we have to get done.”
Cuomo used the Long Island Association-sponsored rally to hammer away at President Trump’s 2017 Tax Cuts and Jobs Act, which reduced the federal income tax deduction for state and local taxes to $10,000, while previously it was unlimited. The measure, Cuomo said, was a “big tax giveaway” to the wealthy and wealthy corporations that “could affect the long-term trajectory of this state.”
“Everything we have done right,” the governor said, “they are trying to derail.”
Because New Yorkers will lose billions to the federal government under the plan, Cuomo said, he is seeking to ensure that the tax levy cap will remain on the books indefinitely — it is to expire in 2020 — while reducing state income tax rates.
Under Cuomo’s plan, those earning less than $150,000 would pay a reduced state income tax rate of 5.5 percent, and those earning $151,000 to $300,000 would pay 6 percent. Currently, those earning $13,900 and $300,000 pay 5.9 and 6.85 percent, respectively, with three income brackets in between. The governor projected that the plan, if enacted, would produce $4.2 billion in tax savings for six million New York filers by 2025. He added that the rates would be the state’s lowest in 70 years.
Without tax relief, New York will find it increasingly tougher to compete with other states economically. Businesses, he said, will be reluctant to move their operations here, and many may move away.
The Senate passed legislation on Jan. 23 to make the tax levy cap permanent. Sen. James Gaughran, a Democrat from Northport, sponsored the bill. “We cannot let Long Islanders be taxed out of their homes,” Gaughran said in a statement. “It is critical that New York state takes steps to provide real tax relief to Long Islanders, while the federal government continues its attack on New York taxpayers.” Sen. Anna Kaplan, a Democrat from Great Neck, co-sponsored the measure.
The bill, which passed the Senate 58-2, must be approved by the state Assembly before Gov. Andrew Cuomo can sign it into law. So far the Assembly has not acted on a permanent tax levy cap. It is not entirely clear why. Assembly Speaker Carl Heastie, a Democrat from the Bronx, has said the Assembly is on a different timeframe than the Senate, while pundits have speculated that Assembly Democrats from New York City are using tax legislation as leverage to win rent control concessions.
"The tax cap is working," said Kevin Law, the LIA's president and CEO. "We need it to stay competitive. It's time we make it permanent."
The New York State United Teachers union is lobbying hard against making the tax levy cap permanent. “The tax cap places an unconstitutional supermajority requirement on votes for school budgets seeking to increase the school funding tax levy by more than 2 percent or the rate of inflation,” the union states on its website. “The tax cap affects students all across New York, but hurts our poorest districts the most, placing the most severe limits on their ability to raise funds.”
The tax levy cap has reduced local property tax growth from 5.3 percent to 1.9 percent per year and saved taxpayers $24.4 billion over the past six years, according to Cuomo.