By Assemblyman Will Barclay
The Tax Relief Commission issued its final report this month. The commission was established by the Governor and was charged with providing recommendations to cut $2 billion in state taxes over three years. Included in its final report were property tax relief recommendations that the Governor will consider.
Three property tax relief recommendations were outlined. They include a property tax freeze, a circuit breaker, and a tax credit for manufacturers. The commission recommends freezing residential property taxes for two years but only for jurisdictions that are within the property tax cap; property tax relief will only continue into a second year if the local government adopts reforms that reduce costs, such as sharing services or consolidating.
The circuit breaker would establish a personal income tax credit for taxpayers whose real property taxes exceeds a certain percentage of their household gross income. Manufacturers would receive a tax credit and specifically, Upstate manufacturers would benefit.
While I’m pleased to see this conversation taking place, I’m disappointed by the lack of recommended budget cuts or long-term cost-savings measures included for localities or school districts.
The reason we have such high taxes is New York has a spending problem.
For example, last year we spent 42% of our total budget on Medicaid, yet we continue to offer several coverage options within the framework of Medicaid that other states do not offer, such as dental care.
Medicaid costs are only expected to grow because last year, the state predicted 400,000 additional people would qualify for Medicaid due to changes caused by Obamacare – the giant federal mandate that requires people purchase health insurance.
In fact, according to news articles published recently, out of the roughly 1.6 million that have enrolled in Obamacare, 1.46 million actually signed up for Medicaid.
The latest report contains only temporary fixes and does not fully consider that the state needs to cut spending.
Tax freezes, tax credits, and tax rebates are temporarily helpful but we need more permanent fixes, ones that will reduce the property tax load for New Yorkers for years to come.
We also need to stop passing state mandates onto localities. I sponsor legislation that would prohibit new unfunded mandates from passing the State Legislature (A1570).
Also, the report encourages consolidation but we’ve budgeted for consolidation and shared services in the past.
This year’s state budget provided $79 million in grants for local governments to fully explore and utilize shared services and consolidations.
Those resources have been largely underused and many times, the voting public rejects consolidations. We need to provide more direct tax relief to small businesses, but this latest list does not make recommendations for small business tax relief either.
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