LEGISLATIVE AFFAIRS: February Legislative Update
Philip Weiden | February 2019
The New York State budget is facing a sudden major shortfall because of changes due to the cap at $10,000 on state and local taxes (SALT), according to Gov. Andrew Cuomo. It is the biggest drop in income tax collections in many years. This could be one of the effects of the federal tax reform law.
The state spending plan proposed at $175 billion is now “unsupportable” according to the governor.
One of the reasons for the sudden deficit is the wealthy in New York are changing their primary addresses and moving to other states. Currently the top 1% of earners pay 50% of the taxes in the State of New York. High income earners in this group tend to have mobile income and income that can suddenly plummet even in a mild recession.
In 2011, after the housing crash the state had a $10-billion budget gap that they were forced to close. This resulted in cuts in services and years of austerity. The housing market has since come back and while prices have recovered, they have not reached pre-recession levels. The governor will have to contend with the Assembly and the Senate that may demand more taxes and fees in order to close the budget gap.
The governor warned that the drop in tax collections could mean less money for programs and services. As an association we are going to continue to fight to lower real estate taxes, but this year’s budget gap is going to make it difficult because of potential losses in revenue to the state and local governments.
Another issue: Consolidated Edison, the natural gas supplier for Westchester County, has said they will institute a natural gas moratorium on new gas connections starting in March. This moratorium results from no new natural gas lines having been built in years and the Cuomo administration’s rejection of any new pipeline projects, according to Con Ed.
Increased demand means more supply is needed and that supply cannot be brought to new customers if the infrastructure is not there to support demand. National Grid on Long Island is also considering this ban, which would halt development of a stadium at Belmont Park and possibly preventing the New York Islanders from moving back to Long Island.
Finally, the governor has proposed legislation that will prohibit discrimination due to the source of a resident’s income. Heretofore, a landlord could refuse to rent to a prospective tenant who relied on a Section 8 voucher to supplement their rent. The bill will likely pass this year as both the New York State Assembly and New York State Senate have Democratic majorities.