Governor Cuomo Outlines Proposal to Cut Property Taxes on Long Island
By Long Island News & PRs Published: February 19 2014
2014-15 Budget Maintains Fiscal Responsibility and Builds On Successes of Past Three Years to Lower Taxes and Create New Economic Opportunities.
Albany, NY - February 19, 2014 - Governor Andrew M. Cuomo today detailed his proposal to cut taxes for residents and businesses during a visit to Nassau Community College in Nassau County. As part of the Governor’s 2014-15 Executive Budget, the proposal continues the fiscal discipline of the past three years by holding spending increases to below two percent, while also reducing taxes by more than $2 billion by 2016-17.
“Over the past three years, we have held the line on spending and enacted fiscally responsible policies like the State’s first ever property-tax cap to curb the rise of property taxes for residents and businesses," Governor Cuomo said. "This year, we must go beyond capping and cut those same taxes that have earned New York the reputation of having the highest taxed counties - both in real dollars and in terms of home value - in the nation. Doing so is essential to continue creating new economic opportunities for New Yorkers and moving our State in the right direction."
Senator Carl L. Marcellino said, “Working alongside Governor Cuomo over the past three years, the State legislature has delivered balanced, on-time budgets that have resulted in the start of a new chapter for New York’s economy. We have begun to open our state up to the private sector, and made New York more affordable to live in by reducing income taxes to their lowest level in six decades. The next chapter begins this year: we must cut the property taxes that have earned counties like Nassau the distinction of being the highest-taxed in the nation for too long. This is one of the single greatest actions that we can take in order to continue reversing years of runaway taxing and spending, and grow the economy on Long Island and in communities all across the State.”
Assemblyman Charles Lavine said, “More than any other tax, property taxes are among the most burdensome expenses for Long Island’s residents and business owners. Governor Cuomo recognizes this, and he has worked to curb the rise of property-taxes, which for years seemed beyond control, by instituting a property tax cap. The next step to making our State friendly to businesses and affordable for our families is to reduce spending. In total, the Governor’s budget proposal would reduce taxes in New York State by more than $2 billion over the next few years, which is a truly unprecedented step in the right direction. I look forward to working with the Governor and my colleagues in the legislature to make this budget a reality and deliver the sweeping tax relief that Long Islanders deserve.”
Nassau County Executive Ed Mangano said, "I am pleased to host Governor Cuomo at Nassau County Community College to present his budget to the residents of Nassau County. Once again, Governor Cuomo has presented a budget that is fiscally responsible and keeps spending under control. Furthermore, he has proposed a series of tax relief measures that will accelerate the growth of Nassau County’s economy, by putting money back into the pockets of our working and middle-class homeowners and cutting taxes and costs for local businesses. Governor Cuomo's plan will also make necessary and important investments that benefit Nassau County residents. I am confident with the Governor’s leadership, we will see another balanced, on-time budget pass this year.”
CONTINUING NEW YORK’S SUCCESSFUL JOB GROWTH STRATEGY
The Governor has proposed a balanced, bipartisan package of tax relief measures that will help to grow the economy and provide much needed relief to overburdened property taxpayers. By 2016-17, these proposals will save taxpayers $2 billion a year.
- Property Tax Freeze: The Executive Budget provides a two year property tax freeze to residents in local taxing jurisdictions that agree to abide by the property tax cap in the first year. In the second year the local taxing jurisdiction must remain within the cap and must submit a shared services plan with neighboring local governments that achieves savings equal to one percent of the combined tax levy in year one, two percent in year two and three percent by year three of implementation. The freeze will generate $1 billion in tax relief for residential property taxpayers. On Long Island, almost 700,000 homeowners will save an average of $565 by the second year of the freeze, saving $394 million for Long Island taxpayers.
- Residential Real Property Personal Income Tax Credit (Circuit Breaker): The Executive Budget creates a refundable tax credit against the personal income tax to provide targeted real property tax relief based on an individual homeowner’s ability to pay. This relief program is progressively structured to provide a greater proportion of benefits to those with the highest property tax burdens as a share of their income. When fully phased in, the program, valued at almost $1 billion, will benefit over 2 million homeowners yielding an average benefit of $500. On Long Island, approximately 367,700 households will qualify for an average real property personal income tax credit of $755. Of the $1 billion in savings that will result from the circuit breaker, $278 million will accrue to residents of Long Island.
- Renters Credit: Available to households with dependents and with incomes under $100,000 and to senior singles earning less than $50,000, renters will be eligible for a credit against their personal income tax, with the credit increasing as income decreases. On Long Island, approximately 104,000 renters will receive an average credit of $269. Long Island renters will receive a total of $28 million in tax relief.
- Corporate Tax Reform: The Executive Budget combines the corporate franchise and bank taxes to provide tax simplification and relief, and improve voluntary compliance. Further, the tax rate on net income is reduced from 7.1 percent to 6.5 percent, the lowest rate since 1968.
- 20 Percent Real Property Tax Credit for Manufacturers: To help lower the cost of conducting business for manufacturers and create jobs, the Budget provides a statewide refundable credit equal to 20 percent of property taxes paid by manufacturers who own property.
- Eliminate 18-a Temporary Assessment for Industrial Customers, Accelerate Phase Out for All Others: At present, the temporary assessment on utilities is scheduled to be eliminated by March 2017. Recognizing the need for immediate relief, the Executive Budget eliminates the assessment on industrial customers in the next fiscal year and accelerates the phase-out for all other customers. The phase-out will save businesses and residents $600 million over the next three years.
The Executive Budget continues the Governor’s commitment to eliminate mandates on to local governments, school districts, and their taxpayers to provide real, recurring relief. The overall savings to local governments, over five years, will be $4.6 billion. Such reforms include:
- Medicaid Relief: Medicaid is one of the biggest costs for counties and New York City. The State is absorbing the growth in the local share of Medicaid growth, saving counties and New York City $1.2 billion over five years. Along with the expense growth, the State is also assuming Medicaid administrative responsibilities for counties. This will result in greater efficiencies and help achieve State and Federal health care reform initiatives.
- Pension Reform: In recent years, pensions have been one of the fastest growing costs for local governments and school districts. In 2012, a new pension tier was created in the State pension system that will save the State, local governments, and school districts $80 billion over the next 30 years. In 2013, local governments and school districts were given the option to have a more stable pension contribution rate, which has greater predictability and allows locals to access the savings from the 2012 reforms.
- Affordable Care Act Funding Acceleration: The 2013-14 Budget used State funds to lower County Medicaid Cap contributions by $86 million through an advancement of enhanced FMAP for the period January 1, 2014 through March 31, 2014 associated with childless adults under the Affordable Care Act Over the next five years, counties and the City of New York will save a total of $2.4 billion as a result of the ACA related enhanced FMAP.
- Early Intervention: Reforms to the Early Intervention program enacted with the 2012-13 budget will save local governments $54 million over five years.
The Executive Budget provides an additional round of funding for the Regional Economic Development Councils. Coupled with the extensive tax relief and reform described above, these actions build upon the economic successes of the past three years to further expand economic opportunities for all New Yorkers.
- Regional Economic Development Councils. The Executive Budget includes $150 million in new economic development capital funding and $70 million in State tax credits that will be combined with a wide range of existing agency programs for a fourth round of REDC awards to fund regional priority projects.
- Strengthening Consumer Protections. The Executive Budget contains proposals under the purview of the Department of Financial Services (DFS) aimed at strengthening consumer protections. These include protecting consumers from costly surprise out-of-network medical bills, curbing no-fault insurance fraud to lower auto insurance rates, lowering the cost of title insurance, and establishing a Student Protection Unit within DFS to serve as the consumer watchdog for New York’s students.
TRANSFORMING NEW YORK’S SCHOOLS
The 2014-15 Executive Budget provides $21.88 billion in total school aid, a record level of assistance from the State. In addition, the Governor is proposing a $2 billion Smart Schools Bond Act to ensure that our schools are equipped with the most up to date technology—to help equalize the playing field for all students. With a $1.5 billion, 5 year investment, the State will embark on a statewide effort to expand the availability of pre-kindergarten for all 4 year olds. This effort will complement a new $720 million, 5 year commitment by the State to support expanded after school programs.
On Long Island specifically, school districts in Nassau and Suffolk Counties will receive $2.6 billion in school aid for 2014-15, exclusive of the Governor’s pledge to provide funding to support expansion of quality Pre-K programs. This represents a $74 million year-to-year increase in School Aid. In addition, if the voters approve the Smart Schools Bond Act in November, the Island will receive $259 million to invest in technology and expansion of Pre-K space. Finally, Long Island schools will be eligible for funding under the Governor’s $720 million, five-year After School Program.
The Executive Budget strengthens the ability of New York's public system of higher education to excel both academically and as an economic engine. New strategic investments will yield further academic gains, create employment opportunities, and connect graduates to jobs.
- Expand and Launch Another Round of NYSUNY 2020 and NYCUNY 2020. The Executive Budget includes $110 million for a new and expanded round of NYSUNY 2020 and NYCUNY 2020 grants, $55 million for each university system. Priority will be given to plans that use technology to improve academic success and job opportunities for students, leverage public-private partnerships through the START-UP NY program, and better connect students to the workforce.
- Offer a Science, Technology, Engineering and Math (STEM) Scholarship. The Executive Budget includes $8 million in funding for a new STEM scholarship program. Full tuition scholarships to any SUNY or CUNY college or university will be offered to the top ten percent of high school graduates if they pursue a STEM career and work in New York for five years.
- Connect the NY Youth Works Program to Community Colleges. To encourage more employers to hire inner-city youth, the Executive Budget will tie the occupational training component of the NY Youth Works Program to the Job Linkage Program.
PROGRESSIVE, SAFER, CLEANER, AND FAIRER COMMUNITIES
Assuring Quality Health Care for All New Yorkers:
The Executive Budget continues historic Medicaid reforms of the Medicaid Redesign Team (MRT) that are achieving better health care outcomes at a more sustainable cost. The Budget supports more effective models of care, sustains the State’s health benefit exchange, encourages regional collaborations among providers and communities, and makes investments in health care infrastructure and health information technology to transform the health care delivery system.
- Increase Medicaid Funding Consistent with the Spending Cap. The Executive Budget reflects the continuation of the Medicaid spending cap enacted in 2011-12 and recommends funding consistent with its provisions. The Budget achieves $10.9 million in savings from public health and aging programs through program reforms, enterprise-wide efficiency measures, and general cost-control efforts.
- Continue Implementation of MRT Recommendations. The Executive Budget continues the implementation of MRT reforms. These reforms represent the most comprehensive restructuring of the Medicaid program in State history, with initiatives designed to improve the full spectrum of health care services. A cost neutral package of new MRT initiatives is proposed to make critical investments in health care delivery. Investments are balanced by savings resulting from targeted Medicaid integrity initiatives to eliminate fraud and abuse, improvements in benefits design, greater controls on pharmaceuticals, and compliance with Federal law that requires spousal support.
- Support the New York Health Benefit Exchange. Through January 17th, over 580,000 New Yorkers have completed applications and more than 326,000 have enrolled in coverage. Federal funding for the initial operations of the New York Health Benefit Exchange will end January 1, 2015, and the Executive Budget provides $54.3 million in 2014-15, growing to $148.3 million in State funding to sustain continued operations of the Exchange. These costs are more than offset by additional revenue generated by increased Exchange-related health insurance enrollment and enhanced Federal Medicaid payments authorized by the Affordable Care Act.
Protecting the Environment:
- The Executive Budget increases the Environmental Protection Fund (EPF), maintains State funding for core environmental, parks and agricultural programs, expands outdoor recreational opportunities, and provides a new round of New York Works capital funding for environmental facilities. State agency and public authority funding will continue to make New York a leader in the clean tech economy, reduce the emissions that contribute to climate change, and allow the transformation of our transmission system to a distributed smart grid network.
- Environmental Protection Fund. The Budget includes $157 million for the EPF, an increase of $4 million from 2013-14 as a result of increased and improved enforcement of the unclaimed deposit program.
- Brownfield Cleanup and State Superfund. The Executive Budget includes legislation to extend the Brownfields Cleanup Program for ten years, with important reforms to protect taxpayers and promote brownfield redevelopment, particularly in Upstate New York. Under the reformed program, remediation tax credits will only cover actual cleanup costs and redevelopment credits will be available for sites that have been vacant for over a decade, worth less than the cleanup costs, or are priority economic development projects. In addition, the Budget includes a new $100 million appropriation to extend the State Superfund cleanup program, including $10 million through the Environmental Restoration Program to address municipally-owned brownfields.
Fair & Just – Public Safety
- Protect Against Gun Violence. A total of $15.2 million will be invested through a new initiative called GIVE – Gun-Involved Violence Elimination to focus on reducing gun violence in New York’s communities. This program will be offered to the same communities currently receiving Operation IMPACT funding.
- New York State Protection Cloud. The State will invest $10 million in shared technology for State and local law enforcement to eliminate barriers to effective information sharing, and support coordinated responses across jurisdictions. As local law enforcement agencies join the system over the next four years, savings to these participating agencies are expected to grow to $12 million annually.
- Continue Right-Sizing Prison Capacity. The Executive Budget reflects the previously-announced closure of four prisons which will save $30 million annually. Affected communities will be eligible for $24 million in new economic development grants to ease the economic impact resulting from the closures.
- Stop Drunk Drivers. Under a proposed new law included in the Budget, drivers found guilty twice of driving while intoxicated or driving while impaired by drugs or alcohol within a three-year period will have their licenses suspended for five years. Drivers who have three such convictions in their lifetime will have their licenses permanently revoked.
- Crack-Down On Youth Texting While Driving. The Executive Budget includes legislation to intensify the efforts to curtail the prevalence of texting while driving by young drivers. Any person under the age of 21 convicted of texting-while-driving will have their license suspended for one year.
REIMAGINING NEW YORK FOR A NEW REALITY
The Executive Budget supports a strategy to transform New York’s infrastructure, transportation networks, power systems, coastal protection, weather warning system, and emergency management, to better protect the State from future extreme weather.
The State is seeking the use of Federal funds appropriated for Sandy, Irene and Lee to implement this far-reaching program. With these resources, New York will rebuild the State’s communities, homes, businesses, and infrastructure to restore the State’s economy and mitigate potential damage from future storms.
- Long Island Office of the Department of Public Service. Consistent with Governor Cuomo's landmark legislation to restructure and improve oversight of electric service on Long Island, the Executive Budget includes $5.5 million in funding for 39 new employees and the creation of a new Long Island Office of DPS (DPS LI). The new office will be empowered to review utility rates and operations, including storm preparedness and performance, to ensure Long Island electric customers receive reliable utility service at just and reasonable rates. PSEG Long Island, the new utility operating the electrical grid on Long Island, is seeking to freeze rates at 2013 levels through 2015.
- New York Works Infrastructure Investment. The Executive Budget provides $135 million of new appropriations for the next round of the New York Works capital program that will address a backlog of environmental capital needs and spur job creation and economic development statewide.
- Establish a State-of-the-Art Weather Detection System. The Division of Homeland Security and Emergency Services (DHSES) will collaborate with an academic partner to secure a private entity to establish and operate a state-of-the-art weather detection system – one of only six such systems in the nation. An initial capital investment of $15 million is being sought from Federal funding related to Superstorm Sandy.
- Create a College of Emergency Preparedness, Homeland Security and Cybersecurity. The Executive Budget includes $15 million in capital resources to fund initial planning and development costs for a new College of Emergency Preparedness, Homeland Security and Cybersecurity within SUNY.
- Equip Gas Stations with Back-up Power Capacity. New York is the first state in the nation with a comprehensive plan to ensure that power is maintained at strategically located gas stations in an emergency. This program is being extended to include approximately 241 Upstate gas stations within a half mile of exits on critical highways. Another $3.1 million will be made available through Federal funding related to Superstorm Sandy.
- Expand State Strategic Fuel Reserves. To prevent future supply disruptions, the current strategic fuel reserve will be expanded statewide to serve emergency responders. The estimated $10 million cost is expected to be supported by the New York Power Authority.
- Prepare Citizens for Emergencies. The Division of Homeland Security and Emergency Services, in collaboration with the National Guard, will offer emergency preparedness courses throughout the year to interested citizens, with a goal of training 100,000 citizens by March 31, 2015. Support for this initiative will come from Federal homeland security funds.
- Achieve Statewide Interoperable Communications. The State will invest another $75 million toward statewide interoperable communications in 2014-15, including a new program distributing $10 million in annual formula-driven grants to counties to support ongoing operations of public safety communications centers.
- Increase Transit Aid Levels. The Executive Budget proposes $4.8 billion of transit aid for systems throughout the State. Downstate systems, funded principally by dedicated taxes imposed in the region, will receive over $4.6 billion, an increase of $90.7 million.