New York Lawmakers Agree on Permanent Property Tax Cap (1)

March 31, 2019, 8:21 PM; Updated: April 1, 2019, 9:28 AM

New York state lawmakers are poised to make a 2 percent cap on property taxes permanent under a deal reached March 31—part of the state’s $175.5 billion budget.

The cap, signed into law in 2011, limits the growth on local property taxes to 2 percent or the rate of inflation, whichever is lower. Overriding the cap requires a supermajority vote of at least 60 percent. The cap doesn’t apply to New York City.

The Senate passed the bill, which now awaits a vote in the state Assembly.

The legislation remains a signature achievement for Gov. Andrew Cuomo (D), and has helped keep tax increases at bay. Taxes in New York state are among the highest in the nation. The law was set to expire in 2020.

Extending the cap builds upon the approximately $25 billion in taxpayer savings since it was implemented in 2012, according to a March 31 release from the governor’s office.

Cuomo wouldn’t agree to a deal on the state’s fiscal year 2020 budget without the passage of a permanent cap, which he said was crucial given the federal limit on state and local tax (SALT) deductions.

The 2017 federal tax overhaul included a $10,000 limit on SALT deductions. Cuomo has said the SALT cap could pressure homeowners to leave the state for places with lower property taxes.

“I’m doing everything I can to combat SALT,” Cuomo said at a March 31 news conference. “I met with the President. I’m working on organizing governors across the country. ...I will continue this fight, which I believe is the most important fight for the State of New York until we get it done.”

(Updates bill status in third paragraph.)

To contact the reporter on this story: Keshia Clukey in Albany, N.Y. at kclukey@bloomberglaw.com

To contact the editors responsible for this story: Jeff Harrington at jharrington@bloombergtax.com; Colleen Murphy at cmurphy@bloombergtax.com

To read more articles log in. To learn more about a subscription click here.