Democratic congressional members along with top New York state elected officials are blasting the Republican budget bill that narrowly passed the House Thursday. The bill paves the way for a GOP tax plan that the Democrats say would decimate New York’s finances and negatively impact middle-class homeowners.
Much of the concern focuses on the potential elimination of the deductibility of state and local taxes, or SALT. Here’s Democratic Hudson Valley Congressman Sean Patrick Maloney of the 18th District.
“This is a terrible idea that will hurt middle-class homeowners in the Hudson Valley to benefit wealthy and well-connected insiders,” Maloney says. “And anybody who votes for this thing should have their head examined if they live where we do.”
And he gives a few Westchester statistics to illustrate the potential impact.
“For example, in Westchester County, 228,000 people claim a state and local property tax and income tax deduction,” says Maloney. “That’s an average of $34,345 per family.”
Nearly 200,000 households in Maloney’s district claim the SALT deduction at an average rate of more than $21,000.
“This is the issue of the moment,” DiNapoli says.
State Comptroller Thomas DiNapoli released a report Thursday saying New York residents stand to lose more than $72 billion in reported deductions for income and property taxes if proposals to change the federal tax code are implemented, a figure for 2015. He says that in addition to downstate counties such as Westchester that report high average SALT deductions, comparatively larger average amounts included $18,492 in Saratoga County, $15,870 in Albany County, $15,551 in Columbia County. DiNapoli told WAMC’s Alan Chartock on the Capitol Connection that the tax plan lacks detail but carries negative impacts for New York.
“Those on the highest and the wealthiest benefit, and the working people and the middle class are the ones that end up paying more,” says DiNapoli. “And this particular proposed change would really target states like New York and Connecticut and California and [New] Jersey. What a surprise, blue states would be the ones that would suffer the most.”
Seven of nine New York House Republicans voted against the tax plan, including John Faso of the 19th district. Faso says he and the other six Republicans could not vote in support of a budget resolution that singled out the SALT deduction for elimination.
“We are wanting to make sure we have a tax reform plan that reduces taxes for middle-class families and for taxpayers so that we can get the economy going,” Faso says. “But we were very concerned about the inclusion of this language from the Senate resolution and that’s why we voted against it.”
Faso says he is committed to finding a solution, though, as comprehensive tax reform is needed. The two New York Congressmen who voted in support of the budget plan, which passed 216-212, were Tom Reed and Chris Collins. Again, Maloney.
“It is not enough for these New York Republicans to vote no. I mean, if this tax bill kills Hudson Valley property values, New York Republicans will have their fingerprints on the murder weapon.” Maloney says. “They need to raise their voices, go to the president, go to their own leadership and kill this thing. They cannot stand by quietly, comforting themselves that they put a red “N” up on a vote board when this thing becomes law.”
Democratic New York City Congressman Jerrold Nadler alleges political gamesmanship.
“So, obviously, the Republican leadership expected that if they needed the votes from Faso, [John] Katko, [Elise] Stefanik and [Claudia] Tenney, then they either had them or they had a good shot at them because they held their votes out; they didn’t vote no until the last minute when they were already over the top. So that’s not an honest vote. It shows that they were probably ready to vote for it had the arithmetic indicated it.”
“Yeah, I just think that’s classic inside baseball kind of stuff. We made plain to the leadership where our votes were going to be, so there was no gamesmanship involved,” says Faso. “We just did exactly what we said we would do.”
DiNapoli says the potential cumulative effect of GOP congressional action on other issues is more than worrisome.
“When you add up the impact, if they would repeal or significantly amend the Affordable Care Act, Obamacare, and the federal budget cuts that are being proposed, that would directly impact New York state and local governments,” DiNapoli says. “If you add on top of it disadvantaging our taxpayers with this double taxation if they would lose this deductibility of state and local taxes, you’re talking about a triple whammy to hit New York state. So there’s a lot for us to be very, very concerned about.
New York Governor Andrew Cuomo also has been vocal on the issue. He stood alongside U.S. Senator Charles Schumer October 23, urging New York's congressional delegation to oppose the repeal or reduction of state and local tax deductions, saying the SALT elimination would destroy the state. He echoed those statements on a joint call with California Governor Jerry Brown Friday.