The federal tax reform proposals would place a greater tax burden on homeowners and taxpayers in New York.
The associations representing New York State's schools and local governments today sent a letter to the State's congressional delegation
, asking them to oppose federal tax reform proposals that would place a greater tax burden on homeowners and taxpayers in New York.
The plan being advanced by President Trump and leaders in the House of Representatives proposes to: 1) eliminate state and local tax deductions, 2) eliminate or cap the federal tax exemption for municipal bonds, and 3) limit the mortgage interest deduction to certain mortgages.
The associations representing our school and local leaders sent the letter to all members of New York's congressional delegation
, including Senators Charles E. Schumer and Kirsten E. Gillibrand, asking them to oppose these reform proposals as they consider the overall federal tax reform package.
Currently, federal tax filers can deduct state income and local property taxes from their federal tax bill. In New York, over 3.3 million households took this deduction in 2015. If this deduction is eliminated, these New Yorkers will see an average annual tax increase of $815, according to the National Association of Realtors.
"Homeowners have sent strong message that they want no big increases in local and school taxes," said Timothy G. Kremer, executive director of the New York State School Board Association. "If the federal tax deduction were eliminated as proposed by the administration, out-of-pocket costs for homeowners would skyrocket. We probably will see organized opposition to school budget proposals across the state, which, if successful, would mean layoffs, program elimination and irreparable harm to our state."
"New Yorkers are already overtaxed. Our congressional members must understand that these three actions would have a direct and negative impact on their constituents and our communities," said Peter Baynes, executive director of the New York Conference of Mayors (NYCOM).
"The elimination of the state and local tax deduction would essentially double tax New Yorkers. We are taxed at the local and state level, and then again at the federal level on the state and local taxes we already paid. It is inconceivable that the federal government would implement this, and we are asking the congressional delegation to reject these proposals," said Stephen J. Acquario, executive director of the New York State Association of Counties.
Another of the tax reform proposals would limit the Mortgage Interest Deduction to homeowners with mortgages exceeding $550,000. As proposed, this reform would severely diminish the accessibility of the mortgage interest deduction for average homeowners in New York.
"Home ownership stabilizes neighborhoods, promotes thriving communities and expands the local tax base. Eliminating tax incentives for home ownership increases the cost of acquiring a home, decreases the value of homes currently owned and could easily increase the number of abandoned or "zombie" properties," said Gerry Geist, executive Director of the Associations of Towns of the State of New York (AOT).
The local leaders are also asking Congress to oppose eliminating or limiting the federal tax exemption for municipal bonds that lower the borrowing costs for critical infrastructure capital projects in local governments across the state. Over the last decade more than 3,500 school and local government projects have been financed using tax exempt bonds in New York, accounting for nearly $150 billion in investments in our future. If the exemption had not been in place, taxpayers in these jurisdictions would have spent $45 billion in higher interest costs. This reform would drastically reduce future investments in critical local infrastructure projects.
"As representatives of schools and local governments across New York, we urge our elected leaders at the federal level to oppose efforts to eliminate the federal deduction for state and local taxes, change the mortgage interest deduction, and eliminate or limit the federal tax exemption for municipal bonds," the four leaders wrote in their letter to the delegation.
The New York State Association of Counties is a bipartisan municipal association serving all 62 counties of New York State including the City of New York. Organized in 1925, NYSAC's mission is to represent, educate and advocate for member counties and the thousands of elected and appointed county officials who serve the public. For more information, visit www.nysac.org