has introduced a bill that would repeal the mortgage recording tax, which the
city relies on for more than $1 billion in annual revenue.
budget watchers say the measure had little chance of passing. The tax brought
$1.8 billion to
coffers in 2007, according to state tax receipts, although revenue is expected
to fall as the economy slows this year.
Freshman Assemblyman Lou Tobacco, a Staten Island Republican, introduced the
proposal March 19. None of the bill’s co-sponsors, two Democrats and eight
Republicans, are from
The bill was sent to the Assembly’s Committee on Ways and Means, which handles
A legislative memorandum explaining the need for the legislation said the tax
was especially difficult for young families trying to buy a home.
“This is a burdensome tax on the people living in
purchase a home in the state of
James Parrott, deputy director and chief economist for the
nonpartisan budget watchdog Fiscal Policy Institute, said any change to the tax
He said only about $200 million of the $3.4 billion collected
by the recording tax in 2007 was used by the state government, and that was to
fund the State of New York Mortgage Agency, which helps low- and
moderate-income residents get a mortgage.
state’s counties received $500 million, and regional transportation authorities
including the Metropolitan Transportation Authority (MTA) saw $800 million in
revenue in 2007, Parrott said.
“I don’t know if the sponsor and co-sponsors are aware
that the money goes to counties or directly to local government and regional
transportation and (the State of New York Mortgage Agency),” he said.
“This is not a way to put pressure on state government … (but) it would
provide a tax cut.”
Assemblyman Tobacco did not respond to requests for comment.
The MTA reported last week that receipts for the tax in
March will be $37.5 million, 19 percent below its forecast in the 2008 budget.
The mortgage recording tax charges a 2.8 percent fee on commercial loans over
$500,000. For commercial or home loans less than $500,000, the rate is 2.05 percent, while for home loans greater than $500,000 the rate is 2.175 percent.