6th Proposal: Continue to Reduce the Local Property Tax Burden By Making the State's County Shared Services Panels Permanent
Governor Cuomo: "I've been working for years to cut the state's income tax, we have it down to record lows, and in one fell swoop, they do a 20 percent increase. It will make this state structurally less competitive, and they know it, and I believe that's one of the purposes. To make the blue states economically less competitive than the red states."
Earlier today, Governor Andrew M. Cuomo held a conference call to discuss the impact of SALT on New York State, and to unveil the 6th proposal of the 2018 State of the State: the 2018 taxpayer savings plan to continue to combat New York's most burdensome tax - the local property tax. More information on the proposal is available here.
A rush transcript of the Governor's remarks is included below.
Governor Cuomo: Hello, thank you very much for joining us this afternoon. I have, as you heard on the call, I have Mr. Mujica with me who will be available for comment or for questions. It looks like the federal government is going to pass the tax bill which we've talked about before with the state and local deduction. It is a fraud on this nation. This is an administration that ran for office saying they want to help the middle-class and the working men and women of this country. And this is a tax bill where 60 percent of the benefit goes to the top one percent, period. Forget all the spin, forget all the politics, that's the facts. And then they have a tortured theory of trickle down, how the corporations, because they're going to get a windfall, will then pay the employees higher wages. Yeah, or they'll pay themselves higher wages.
And then in the tax plan is the SALT provision, which is an economic dagger directed at this state. It is a gross injustice. This is the number one donor state in the United States of America. We give $48 billion more than we get back, it was Senator Daniel Patrick Moynihan's point repeatedly. It's still true, and now they want to take more from New York to finance the tax cut in their home states, which is all this is about. This a U.S. Senate that is using the blue states to fund the red states. And it's a U.S. Senate that doesn't have any Senators from the blue states, so it's all too convenient for them. But it looks like it's going through, it will effectively raise the state income tax 20 percent, and will effectively raise property taxes 20 percent, right? Depending on the individual's bracket. But you just take their 20 percent number as illustrative. I've been working for years to cut the state's income tax, we have it down to record lows, and in one fell swoop, they do a 20 percent increase. It will make this state structurally less competitive, and they know it, and I believe that's one of the purposes. To make the blue states economically less competitive than the red states.
It also will be a twenty percent increase on property taxes. Now property taxes are the greatest tax in the state of New York. People don't understand that, it's two and a half times, for most people, what they pay in income tax. And it is one of, if not the highest property tax in the United States. To increase property taxes 20 percent is going to be a dramatic negative impact on property tax payers all across the state. It's so bad that it could even effect the value of homes. You take a place like Long Island, where half of the property tax payers will experience a significant increase, it could affect property values. Upstate New York that pays the highest property tax by percentage of home value - they're going to be significantly hurt by this cut.
We've also been working on reducing property taxes, as you know. And had a number of initiatives to do that, property tax cap etcetera. Taking over the increase in Medicaid, which costs the state now billions, and holding the local governments harmless. Making government consolidations easier - I've been working on this since I was the Attorney General. Last year we did, for the first time ever, something called shared services initiative. The point of the shared services initiative is Mr. County Executive, Ms. County Executive, please assemble all the local governments in your jurisdiction and at least have the conversation about finding efficiencies. I can't tell you how many local governments have just never met. When they say, "well we can't find any efficiencies," they never even had the conversation. They never even asked the question. So our shared services initiative said have the assembly, have the meeting, have the conversation. The County Executive is empowered to the extent some County Executives said, "well you know we don't really have the authority to have the conversations with our local governments." Okay, shared services panel - you now have the authority to have the conversation. Have it, and if you come up with savings, we'll match the savings. 34 counties participated, they came up with about 400 projects saving about $200 million.
So even though it's hard, and it's politically difficult because everybody wants their own political fiefdom and this says fiefdoms should cooperate, it worked. If this tax bill actually gets passed, it's going to make the need to reduce property taxes even more urgent. Therefore, in the State of the State, I'm going to announce an initiative to take the shared services panel to the next level—which is to make them permanent and continue them. To set aside in the budget $225 million to match next year's savings that we hope to get from the shared services panel. And to take $125 million in state funding which is for local governments performance and efficiency funding and make that funding accessible only through shared services panels, which will further incentivize the shared services panels.
We are also taking a specific action, some of the local governments came back and said they were interested in pooling the coverage for health care costs but were unable to because of regulations that the state has in place. And I've tasked DFS to come up with a solution and actually facilitate that kind of pooling of health care coverage etcetera. Because that's one of the easy savings, right? Collective purchasing, and using your purchasing power - so health insurance, which has been a driver of the increase will be facilitated through DFS and this will be a proposal that will be laid out in the State of the State and included in the state budget that I'll present later on in January.