LEGISLATIVE AFFAIRS: Bold Thinking Required After the Passage of Tax Reform
Philip Weiden | January 2018
Now that federal “tax reform” has passed and been signed into law, it remains to be seen how the provisions of the bill will affect home values and taxes in the State of New York. It is an opportunity for New York State government to reimagine the way government works and functions.
Several initiatives could possibly be valuable to reign in the cost of government. The first would be a spending cap pegged to the rate of inflation for state and local governments, which would force government to live within its means. New York faces a $4-billion to $8-billion deficit over the next one to two years. Cuts and government reorganization will have to be made to make New York a vibrant and affordable place to live.
Lifting mandates on local government would allow the local government flexibility to meet the spending cap. Currently, requiring a spending cap without eliminating the mandates, the counties and towns are forced to fund, precludes their ability to abide by a spending cap as significant portions of local budgets are consumed by mandates.
Another initiative incorporated in a bill proposed by New York State Senator David Carlucci would allow you to deduct your state and local property taxes at the state level and provide a deduction now that the federal deduction for state and local property taxes has been capped at $10,000.
New York State and local governments could also consider privatizing many services and partnering with private companies in what are called public private partnerships. This would allow private companies to operate services that might result in efficiencies. Sometimes these partnerships do in fact fail, but if they do fail, the possibility exists to allow another private company to take over. These proposals may help to reign in the cost of government. Let’s see if our government is up to the task.