Last week, New York Governor Andrew Cuomo announced a $1.6 billion dollar property tax credit program. The so-called “circuit breaker” that purports to help ease the burden on working class families.
Under Cuomo's plan, rolled out ahead of the State of the State address, homeowners would get a state income tax credit if they earn less than $250,000 and have property taxes that exceed 6 percent of their income. The governor is concerned that New York's high property taxes are driving young people and businesses out. "This is probably the single most important challenge that we're facing economically as a state," said Cuomo.
The governor will use the circuit-breaker in conjunction with the 2 percent property tax cap he implemented a couple of years ago. Cuomo is including tax credits for more than 1 million renters in his plan by tying taxes to household income.
The New York State United Teachers, which has had a pro-circuit-breaker stance in the past, has reservations about this proposal, its latest disagreement with the second floor. Spokesman Carl Korn labels it "deficient." "It's tied to his property tax cap, which we are challenging in court as unconstitutional. If there's going to be any relief under the Cuomo plan, it would mean that communities would be forced to cut academic programs and services in order to fit under that unconstitutional cap. That would adversely affect students and the quality of education they receive, and ensuring that every child receives a top quality public education really ought to be the state's top priority."
In the past “circuit breaker” legislation has been championed by Democrats and progressives. And this time around, Governor Cuomo has an ally in the Fiscal Policy Institute, a labor-backed think tank. Ron Deutsch is FPI's interim executive director: "The Fiscal Policy Institute studied this issue and we found that there's over 700,000 households in New York that are paying more than 10 percent of their income in property taxes. In fact, a quarter million of those are paying more than 20 percent of their income in property taxes. So this is a very real problem for middle income and low income families, and this particular tax relief is really going to help them."
Albany County Executive Dan McCoy is on the same page. "Even though we're coming out of this great recession of '08 and things are starting to get better, people still need help. They're having a hard time putting food on their table, paying the rent, paying the mortgage, finding a job or they stay on a job that's not paying what they used to make. They've taken cuts in pay. This is really gonna give relief to the taxpayers."
Some critics argue the tax credit is really a subsidy, others suggest the state should provide property tax relief by restoring a more progressive structure of state taxation and revenue sharing with local municipalities.
Cuomo is expected to fully detail his plan and how he'll fund it Wednesday during his joint budget address/State of the State speech.
