Governor Cuomo’s commission to study tax cuts will miss a Friday deadline (missed the deadline) to report it’s findings by December 6th, after controversy over former Governor George Pataki’s desire to cut income taxes for all wage earners, including the wealthy.
Although the tax commission has now bogged down over co chair and former Governor George Pataki’s push to lower income tax rates, it’s original charge was to look at ways to lower New York’s highest in the nation property taxes, as well as finding ways to reduce business taxes.
The state’s Business Council President, Heather Briccetti, who is on the commission, says the tax rates are an obstacle to growing the state’s economy.
“Obviously business taxes are very high,” Briccetti said. “If you can do something to alleviate that burden, there’s more opportunity for job creation.”
She says it’s trickier, though to regulate property tax rates, which are set and collected by local governments and school districts.
Ron Deutsch, with the progressive policy group New Yorkers for Fiscal Fairness, says there is a way for the state to lower property taxes paid to local governments and school districts. And that’s through what’s known as a circuit breaker. It’s a system that sets a threshold on what percent of a taxpayer’s income should go toward paying property taxes. Any amount over that limit, the state would subsidize in the form a rebate. Deutsch says it’s called a circuit breaker because it’s intended to work on the same principle as an electrical circuit breaker, which interrupts the flow of electrical current when a circuit becomes overloaded.
“It’s really the best way to deliver targeted relief to people who need it the most,” Deutsch said.
Deutsch admits that it’s not as flashy as some other programs, like the STAR property tax program, which is set to give $350 rebate checks to all homeowners with children who make up to $300,000 a year. The checks are due in October 2014, just before Election Day. Deutsch says a circuit breaker gives money to those who actually are struggling to pay their property taxes, and he hopes commissioners will recommend it .
“We’re going to be holding their feet to the fire,” Deutsch said.
Briccetti , with the Business Council, agrees that STAR has not worked to lower property taxes overall, and has had unintended consequences, like simply subsidizing growth in school spending.
“Sometimes it has backfired,” Briccetti said.
She says businesses need help too, they pay 40% of the property taxes in the state.
Taxes are likely to be a key issue in the upcoming legislative session. Governor Cuomo says he intends to seek tax cuts in the new state budget, though he’s said he’s not interested in cutting income taxes right now. Meanwhile, New York City Mayor elect Bill de Blasio has said he wants to raise taxes on the wealthy to pay for pre kindergarten. The governor has been non committal, saying he and the new mayor will work in out in January.