Sounding a refrain that will most likely echo through his re-election campaign this year, Gov. Andrew M. Cuomo on Monday announced a sweeping $2 billion tax relief proposal, a catchall of cuts for property and business owners, renters and upstate manufacturers.
The announcement, a peek into his goals for the coming legislative session, carried an unmistakable and oft-repeated message: New York’s reputation as a high-tax state cannot be tolerated, and tax reductions will be among his top priorities.
Mr. Cuomo, a Democrat, said the state would be able to pay for the tax cuts because his administration was tightly controlling increases in spending and expected growing surpluses in coming years. The plan would be phased in over three years; Mr. Cuomo’s office would not provide details about how the cuts would be financed in the short term.
The proposals by Mr. Cuomo, to be included in his State of the State address on Wednesday, largely mirrored the suggestions provided to him last month by a panel led by former Gov. George E. Pataki, a Republican, and former State Comptroller H. Carl McCall, a Democrat.
“The commission fundamentally recognized that New Yorkers need tax relief,” Mr. Cuomo said. “You have got a lot of hardworking families, a lot of homeowners who are getting crushed in this state by taxation.”
During an hourlong presentation at the Capitol, the governor offered proposals intended to please an array of constituencies.
Addressing complaints that the tax panel’s recommendations did not sufficiently benefit taxpayers in New York City, he proposed an income tax credit for renters who earn up to $100,000.
He also proposed a more aggressive tax cut to benefit what remains of the manufacturing industry in upstate New York, whose struggling economy he has sought to reinvigorate, calling for the elimination of corporate income taxes for manufacturers in regions north of the New York City area. Their tax rate is currently 5.9 percent, and the commission had proposed cutting it by about half.
But, Mr. Cuomo said, “You can’t beat zero.”
Eager to establish a reputation as a business-friendly tax cutter, Mr. Cuomo embraced several ideas that have been questioned by liberals, including reducing the corporate income tax rate to 6.5 percent, from 7.1 percent. He also proposed raising the estate taxexemption to $5.25 million, from $1 million, so New Yorkers would no longer “leave the state to die.”
And he repeatedly called for thousands of local governments to consider consolidating with their neighbors, at one point ticking off a list of tax-collecting entities.
“Towns, villages, district — water district, sewer district, fire district — another district just to count the other districts,” the governor said. “We were government-crazed in this state.”
And now, he said, “They have a life of their own.”
Mr. Cuomo pitched a plan proposed by the panel in which the state would provide a tax rebate equal to the increase in a homeowner’s property tax bill for two years, tantamount to a freeze. His office said the rebate would save the average homeowner $350 per year. The second year would be tied to municipalities’ demonstrating “concrete steps” toward sharing services — though local governments say they have been aggressive in cutting costs and sharing services.
Another proposal would provide a tax credit prompted by how much of a homeowner’s income goes toward property taxes, an arrangement known as a circuit breaker. Homeowners earning up to $200,000 would be eligible, and the average household would save $500.
Mr. Cuomo and members of the Legislature are up for re-election in November, and Republican and Democratic leaders in the State Senate and State Assembly voiced qualified support for his proposals.
Still, after years of austerity budgets, some Democratic legislators are wary about Mr. Cuomo’s eagerness to funnel any extra revenue into tax cuts.
Michael Kink, the executive director of the Strong Economy for All Coalition, which includes powerful labor unions, said the state would be better off investing more money in education, housing and antipoverty programs.
“If you’re giving tax breaks to millionaires and billionaires,” he said, “you’re inflating the prices for Francis Bacon paintings at Sotheby’s; you’re not creating jobs in Utica or Buffalo.”
But business groups were thrilled with the governor’s cuts, which would also speed up the planned elimination of a utility assessment. Randy Wolken, the president of the Manufacturers Alliance of New York State, said the plan sent “a powerful message to the nation.”
“We need to change the environment and the perception of New York as a high-tax state,” Mr. Wolken continued. “And the governor has taken the next step, saying we don’t want to tax them at all.”
Edmund J. McMahon, the president of the Empire Center for Public Policy, a conservative research group, said he remained unconvinced that the promised property tax measures would have any substantial economic impact.
“These are tiny marginal temporary savings,” Mr. McMahon said. “They won’t do anything to speak of for the economy. They are meant to increase the ability of the governor and Legislature to say they reduced your property taxes.”
©2014, New York Times
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