Dec 15, 2013|
on Gov. Cuomo's Tax plan
Automatically Generated Transcript (may not be 100% accurate)
It's hard line on news radio 930 WVU and this -- -- for the next half hour and quite a bit of the one after that we're going to be talking about taxes in New York State. Specifically the recommendations that came down this week from governor Cuomo's tax reform commission now he hasn't enacted all of these. He might be able to cherry picked some of these and say OK that's what I like that's why don't. But here's what the commission which he set up recommended. A two year program a property tax rebates and any municipality. That stays within that 2% cap on annual increases. He's going to raise the threshold for a state taxes and cut the rate there. And corporate taxes would lower to the lowest level they've been since 1968. So what's wrong with that let's bring in someone says plenty someone says -- is wrong with its treatment -- is a statewide spokesman for the CI CA a civil service employees association. Steve thanks for taking the time this morning. My pleasure we're digging after about a foot of snow here in the capital region. I'll only afloat -- And we some of our southern interior -- gotten that much in one day alone earlier last week so I don't imagine I I share your pain. Talk to me of the tax proposal here what's wrong with that why why wouldn't it work. Well that this is an administration that really doesn't let the facts get in the way of their sound -- and they have certainly yet. Made it their mission to. -- air. Administration wins the idea of lowered taxes but the idea of lower taxes doesn't actually mean lower taxes. And I think what. Very significant in this particular. Circumstances that the governor. -- used the term cherry picking out earlier. The governor actually cherry pick his results. You know he get appointed earlier reform that commission on that tax fairness which was headed by Peter Solomon. And he did not like they beat the recommendations that seem to be developing -- of that debt commission. And as a result you pointed this George attacking Carl McCall left commission to come up with different results that -- One more to his particular liking and again you know when you talk about that's not getting in the way of the sound -- I think it would be very important for people to go back and take a look at report that was developed for the first commissioned by. Peter Solomon and Pete have paid for by Pete Peters in the former press secretary of the treasury under Nixon. I'm hardly. Somebody who was unfriendly to -- to business and what this report said in that first commission was that -- But by and large New York has paid out to the point right now where it's two billion dollars a year in tax incentives that. Subsidies and what that we might refer to as corporate welfare. And we have gotten no bang for the buck up wiping out two billion dollars we've actually lost jobs here. In new York and this is a strategy that really does not work. That report was largely suppressed. By the administration. And -- they came up with their own set of recommendations. That simply counting the benefit of doing more of the same. Well what is what is wrong with basically lowering property taxes in the way he's proposing it. Why again I think what's and what's important depth and detail understand is that the administration is not really out looking so much at the end results of what you're going to get it's about. Being able to make that claim and I think when you talked specifically about of the property tax. Situation they're basically ham stringing. Local. Governments in their ability to deliver services at the same time the stage is. I'm getting out of the business of providing mental health services they're closing. Prisons there rather eroding a whole range of other road services even the Department of Transportation doesn't seem to be immune to that cut that debt. They yes they are enacting and the responsibilities the status stepping away from so that's going to mean greater burden on localities. Throughout the Cuomo administration and we have seen had bad but laughed. Local government aid program. And that now with this proposal that the governor's putting forward with a string that's attached is that it's only if. You consolidate or stay within that cap that you roll up to see any kind of assistance. From this stayed at the same time all of these other factors coming into play and that's simply means that people locally are going to be paying more and getting less. Philosophically are you against the idea of lower taxes because lower revenue for the state. Means less than government can do for people including your members and those who certainly serve. Well first -- our members are taxpayers to lead then you know when you simply go out inflame an issue. As all would like to pay lower taxes okay who doesn't want that every single one of us wants that they had -- including CS CA members. But the reality is that we should be doing something that's Smart in terms of our policy. That ensures that we can for continued to what provide services that people need. That we're not giving away our money to -- corporations and wealthy individuals who are not really returning the investment to us. Here in the state I mean that's that's the issue. You know we haven't. We able to continue to -- two billion dollars away in corporate welfare. We should at least be expecting that we're going to be seeing a thriving economy and jobs that. So where does this go next this kind of sets the background for the budget battle common on the legislature kicks around a bit. Well I I think that's really a little bit hard to that the Taliban think that there what you're describing it is is likely going to be at least part of what. While we'll come forward. You know I think what you saw this week was. -- pushed back on the governor's proposal from a lot of different quarters including the business. In the in the business area you know -- The empire center. EJ McMahon who was certainly yes. Why didn't somebody who lied doesn't share the same ideology it's the FDA does what we do you know equally critical of that this proposal as as we work. Funny you should mention that we got to move on EJ McMahon is the very next segment thanks Steve. How about that sometimes it just falls into place enjoy the selling. Thank you all right and I didn't mean that well on the Mac and Steve -- Darius is a statewide spokesman for CO CA and he said it himself he gave me the perfect segue. A rare is it that EJ McMahon of the empire center is on the same page as statewide unions. Now let's continue our discussion about taxes specifically. Governor Cuomo's recommendations -- of the recommendations that were given Governor Cuomo this week. From his property tax reform commission. He wants a two year program of property tax rebates and anyplace that stays within the 2% cap. He's lowering estate taxes and the threshold at which they kick in. And he's also lowering corporate taxes. About one of the headlines this week that caught my attention comes from the New York Post. And EJ McMahon and an op -- the headline quo almost pack of tax cut gimmicks. Cuomo has just been handed -- decidedly mixed bag of tax break -- reduction recommendations. Combining pro growth -- next tax cuts with -- gimmicky property tax relief package that would deliver virtually no economic bang for the buck. The guy that wrote that is EJ McMahon from the empire center he's on the line now thanks for joining us there. How is this a gimmick talk to me is special about that line that says delivering virtually no economic bang for the buck isn't it. Is that a given that if we lower taxes that makes things better. Well well if you actually do it if you lower broad based taxes can make things better but the gimmick. It's referring to a part of what was recommended. Which in this case was a part of what the governor's office asked the commission to recommend. Which is a so called freeze and property taxes. Remember the governor. To his credit a couple years ago -- as state to a a cap on property tax -- as you know. Right and it. I think it's something that is oftentimes been been discussed in the context of school boards but it does also apply to municipalities. Right I mean they have to override -- they can override it and they do but it is still seen as this politically symbolic and important and so it's considered a big deal if you override. So that cap -- 2% in fact it's 2% or inflation whichever is less so next year for most places it's going to be more like one point 6%. And even with a fuel announces that could hold down the rate of growth in Texas quite a bit. So that's already having an impact especially as you said on schools schools are really have really felt constrained by this. So that's -- governors turning around and the week here. Kind of strange twist in what this commission recommended was. Well. If you live in a place -- if your property taxes are kept within the cap. The state will and you'll quote unquote rebate. Presumably through your income tax. For the amount of increase paid under the cap. Now that his. What of the passing strange an extremely complicated that you know up everywhere your listeners and people New York's upstate new York and throughout the state outside the city. Pay property taxes to a minimum of three different places school district municipality in the accounting. Sometimes they may pay taxes of five or six different places that they live in the village and -- have a sewer district console on. So how you're gonna measure whether somebody's under the cap and why the state should reimburse that is one question. By the way for people on the way in Western New York. This so called cap -- if you live in. If all the places you live and limit the growth in your taxes to -- -- now on any given year. This rebate check may -- up to raise a total like eighty dollars. So Opel when you don't -- -- it is up to lake enhanced billions so temporarily. For two years and two years old way. They're gonna spend half billion dollars sending tiny checks to people. And what -- what it's gonna take administratively to figure out with that you qualify what you get is gonna cost more in many cases than what they send you. So what am -- getting at that is my definition of the gimmick and that's basically. Something that's designed for political purposes it's meant to be another throw you -- property taxes because polls show you care about your property tax. And what a coincidence gee it just happens becoming ripe for an election. -- it right no coincidence at all actually and you know it's ironic and it's a shame actually that the governor has done a lot I mean. The the property tax cap was a major achievement it was half of the major achievement in this sense the governor did the cap. And had did not and has not embraced that promoted the kind of mandate relief that localities need to live more comfortably within the cap without -- -- services. And we've talked about that in the past but the governor won't do things like reforms the so called -- -- amendment which allows automatic pay increases to unfold for public employees every year. He -- do other reforms to collective bargaining laws that would make it. Make it easier for local officials to restructure their costs and to and to reallocate their work forces and otherwise operate more efficiently -- they do. That so adamant that -- bill you can do me and it really is a big problem but on the other hand he could do the cap. This so called you know the so called tax cut it's really gimmick as I said with a -- -- distribution of money from the state taxpayers to the people. Again it's it's it's something that's meant to basically connect his name was something some little amount of money you'll get that will be called the property tax cut. But property tax cut that the transfer of income from the state treasury for two years to your pocket in small amounts. And you know I guess I just think that it did you know. When you when you think about the opportunity cost of that what other kind of tax cut could be done -- a -- billion dollars that we're wasting on this. So you say it would be better off if he used that half billion for what. Well well well almost anything but the main thing he's not doing -- has not allowed in did not allow this commission to recommend. Was -- begin phasing out and making -- these these so called millionaire's tax increase and making permanent the temporary middle income income tax cuts that they passed a couple of years ago. Right now is I also wrote in the piece the state income tax which is the State's largest single source of revenue and staple. As more loose ends with a cheap sweater. They beat the top three or four brackets are all temporary they're not permit -- -- expire at the end of 2017. That includes reductions in taxes and middle income -- as well as it is very large increase in tax at the top income. There's at the other aspects of the income tax like whether it's lead to inflation and which was an overdue reform. That was done in 2011 temporarily that's also a temporary. Through 22017. So what good that would be phasing out that big tax increase which discourages in the long term. Much higher income people from investing in creating jobs in New York it's small businesses ultimately to. And you would be making permanent the reductions that were -- in the tax and otherwise. Broadening the base of the income tax. And holding the -- is what was possible because those are in line with -- principles that that suggest to be more economically efficient and competitive to do that. He's not doing that he refused to allow the commission even discussing contacts he continues to say that the income taxes because quote quote done. Well it's not done -- -- that completely unsettled. He could've done more in -- to reduce business taxes. And making it and he may yet do that because he's the -- that the way he has staged this. Whole sort of two step process of having two different commissions recommend tax policy that -- -- Is that it gives them a level deny ability all these ideas sort of flowed out there. And then at any of them developed too much criticism from the outside world he kind of an essence step around them. And change them and say well that was what was recommended to me but that's not what I'm doing that's. The one thing he clearly is gonna do. Another part of what this commission recommended as a so called circuit breaker that is. Some -- -- and not tampered -- to be some sort of permanent addition to the tax code that would give you some kind of tax credit. -- and only if the property taxes exceed a certain percentage of your income. All the commission recommended was that concept without specifics. Doing that in a way that that a lot of people noticed and it sent a noticeable sum of money to a lot of people that would have a very large impact the commission's report. Just threw out a bigger than other billion dollars for that I think. To actually do without any sort of large scale it with. Politically make an impact could be well over a billion dollars. So that's going to be bid up if that's proposed in the legislature and and that's another problem because that's not combating the problem of high property taxes that's simply subsidizing them for some people. How much of this do you think will play out and the budget. Submission to come after the first of the year. Well and unfortunately. I think that -- some version of the proper tax circuit breakers virtually certain to be in the governor's budget because he has talked a lot about it. In fact it was that you think accompanies the commission recommended it because basically told the commissioning of the recommend. Now behind you there is you know we have something called star in the dark star we spent three to have billion dollars a year -- -- the largest state subsidy property taxes in the country. So -- been there done that to a very significant degree this is just another way. Of moving money from one pot. Into another and saying that your quote unquote providing tax relief when actually what you're doing is subsidizing some people's taxes with other people's -- EJ we are out of time with your permission I'd love to post the commentaries sent to the post up on a website. I hope you will thank you very much great thank you.