Gov. Andrew Cuomo has two major asks of the incoming Biden administration: $15 billion in federal aid and a repeal of the cap on state and local tax deductions.
During an address Tuesday on his proposed fiscal year 2022 budget, Cuomo said the state would “pursue litigation” if it doesn’t receive a “fair share” of a $1.9 trillion relief bill President-elect Joe Biden pitched last week. The bill proposes $350 billion in federal funding for state and local governments, of which New York should receive $15 billion, Cuomo said.
The governor laid out several steps the state would take if it receives less than that amount, in addition to suing the federal government. For example, the state would increase the top income tax rate from 8.82 percent to 10.86 percent. According to the governor, that would raise $1.5 billion in revenue. Cuomo has repeatedly extended the state’s millionaires’ tax, but has not raised taxes since taking office in 2011.
In a briefing book the state released, the governor also laid out a few real estate-related initiatives in the preliminary budget. For one, it includes up to $50 million in tax credits for struggling restaurants and for small businesses who hire additional employees this year.
The preliminary budget also includes language that would prevent property sellers from saddling buyers with the costs of transfer taxes. And it changes a 2019 law that requires members of a limited liability company that buys residential real estate to disclose their identity. The changes apply to real estate investment trusts and publicly-owned companies.
Full details on both measures have not been released. But according to the briefing book, changes to the LLC measure would not interfere “with the law’s underlying purpose of transparency in ownership.”
During his budget address, Cuomo called for the repeal of the $10,000 cap on deductions of state and local taxes, which was implemented by the Trump administration beginning in 2018. The proposed budget includes the creation of a voluntary tax on pass-through entities, which can be used at the federal level and is aimed at reducing the impact of SALT. It would be complemented by a credit that can be used against regular state income taxes to offset the voluntary tax.
The briefing book also notes that the budget “advances” $1.3 billion in rental assistance from the federal government. The funding will support renters who earn less than 80 percent of area median income and are facing financial hardship. The state plans to prioritize the unemployed and set up a hardship fund for undocumented individuals, according to the briefing book.
As previously announced, the governor plans to launch a $16 billion “Midtown West” project, which includes the expansion of Penn Station and the development of more than 20 million square feet of commercial and residential space.