Bellone Announces Plan to Restore Deductions
Suffolk County Executive Steve Bellone announced Tuesday that the county has created what he called a comprehensive action plan to protect homeowners negatively impacted by new federal tax laws that significantly limit state and local tax deductions. Titled, “The SALT Cap Response Plan,” Mr. Bellone said on Tuesday will help restore tax deductibility for affected homeowners and ease the financial burden of the change in federal tax law.
“My message to the IRS is clear – if you try to stop us from protecting our SALT deductions, we will see you in court,” said County Executive Bellone at Tuesday’s press conference. “Governor Cuomo took the lead in fighting back against the federal SALT tax law with a plan to protect localities, and today, we are following that guidance prescribed by state law. And while we continue to push for Congress to restore these tax deductions, Suffolk County will not wait for Washington to act.”
Pursuant to the federal Tax Cuts and Jobs Act of 2017, deductions for state and local taxes, including sales, income and property taxes, are now limited — a limitation that has burdened residents in New York and especially Suffolk County, said Mr. Bellone. The combined amount claimed for these taxes may not exceed $10,000, or $5,000 for married taxpayers filing separately. Prior to the new federal tax law, SALT deductions were not capped.
A recent audit conducted by the U.S. Treasury Inspector General for Tax Administration found that nearly 11 million Americans would have lost a combined $323 billion in deductions if the new federal SALT tax law would have been in place for 2017. On Long Island, the impact of SALT is even more acute. According to the Urban-Brookings Tax Policy Center in Washington, a total of nearly 530,000 homeowners, or more than one in three tax filers in Nassau and Suffolk Counties, are affected by the SALT cap.
According to Mr. Bellone, the New York State Comptroller estimates that New York sent $24 billion more in tax payments to Washington than it got back in federal spending last fiscal year.
In 2018, Governor Cuomo and the New York State Legislature enacted a series of bipartisan reforms to the New York State tax code designed to protect New York residents from the adverse impacts of the federal law. Among these reforms, the new legislation authorized local governments and school districts to establish charitable gift reserve funds and to offer real property tax credits to incentivize contributions.
As a part of the SALT Cap Response plan, Mr. Bellone has introduced a resolution that would establish a charitable gift reserve fund and authorize charitable gift reserve fund tax credits. This would authorize any owner of real property located within the County to make a contribution to the Suffolk County Charitable Gift Reserve Fund and claim credit against such property taxes equal to 95 percent of that contribution. The County resolution complies with Governor Cuomo’s New York State-passed provision to allow taxpayers to make a voluntary charitable contribution to a charitable gift reserve fund, so long as such fund is established by a given local government.
Mr. Bellone said he also planned to continue efforts to work on restoring SALT deductions on the federal level, and said the county will take steps to mitigate the impact on the housing market by reducing mortgage fees and freezing them in place for three years.
The county has also unveiled a new webpage to provide residents with information and announced that The Suffolk County Department of Economic Development and Planning will conduct an economic analysis of the SALT impact in Suffolk County. The report will begin after a majority of residents file their taxes on April 15.
Southampton Town Approves Community Choice Aggregation Energy Program
The Southampton Town Board voted unanimously on February 26 to look at establishing a Community Choice Aggregation (CCA) Energy Program. The New York State approved (CCA) Program may give ratepayers, as a group, the ability to find cheaper rates through a competitive bidding process than currently available from the Long Island Power Authority, to advance the Town’s efforts to achieve 100 percent renewable electric energy by 2025 and to make a significant impact on the reduction of greenhouse gas emissions. The approved local legislation begins a process of evaluating the potential of the CCA program.
The CCA Program was first proposed by the Town’s Sustainability Committee and its chair of the Energy sub-committee Lynn Arthur. The Towns of East Hampton and Brookhaven have expressed interest in learning more about the Southampton CCA and could join with the Town program in the future. The Town of Brookhaven is currently establishing an exploratory committee to investigate CCA.
After passing the resolution on February 26, the Town now has the local authority to seek the expertise of a CCA administrator to evaluate the potential of the CCA program for Southampton ratepayers.
Moody’s Says Southampton Looks Good
The Town of Southampton announced last week that Moody’s Investor Service’s has continued to rate the town at its highest designation. In its annual comment about the town, the rating agency noted “the credit position for Southampton Town is exceptional, and its Aaa rating is notably stronger than the U.S. cities median of Aa3.”
The report states the Town has a “robust financial position” with a cash balance slightly above the median in the United States. The rating agency also finds Southampton Town’s economy and tax base are “exceptionally healthy” and are aligned with its Aaa rating. The total full value, $60.7 billion, in 2017, $63.7 billion in 2018 and $67. billion in 2019, is significantly above the U.S. median.
“This latest profile gives us confidence that our conservative financial budget measures, under the leadership of Comptroller Leonard Marchese and supported by the Town Board, are working,” said Supervisor Jay Schneiderman.