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Cuomo tax panel recommends $2B in relief

Gov. Andrew Cuomo is shown at Stony Brook

Gov. Andrew Cuomo is shown at Stony Brook University. (Nov. 13, 2013) Credit: Darren McGee

A commission appointed by Gov. Andrew M. Cuomo recommended $2 billion in tax relief Tuesday, including a two-year property tax freeze for homeowners living in areas that abide by the 2 percent property tax cap and take steps to share or consolidate services.

The plan, unveiled at SUNY Old Westbury by the Tax Relief Commission, would rely on a state surplus to fund the initiatives, which also include reductions in the state estate tax and tax cuts for corporations, manufacturers and utilities.

Cuomo, a Democrat running for re-election next year, said New Yorkers pay roughly $50 billion a year in property taxes -- among the highest in the nation -- and that businesses and residents are fleeing to lower-tax states.

"It is a tax that is crushing New Yorkers," Cuomo said. "It is also a crushing tax for businesses."

Any changes would require legislative approval, and state legislative leaders had mixed reactions to the plan.

The panel, led by former Republican Gov. George Pataki and former State Comptroller Carl McCall, a Democrat, also called for a property tax "circuit breaker" that would provide homeowners with a credit when taxes exceed a certain percentage of personal income.

The panel did not suggest income levels for homeowners to qualify for the program.

State officials said they expect Cuomo to propose a similar credit for renters.

A two-year freeze on property taxes would cost $1 billion, according to the commission.

In year one, all homeowners living in municipalities that adopt local budgets and stay within the cap would receive a state income tax credit equal to the growth in their property taxes. The freeze would apply to taxing entities, including counties, towns, villages, school districts and water and sewer districts, according to state officials.

In the second year, the freeze would continue only if governments abide by the tax cap and take "concrete" steps to reduce costs by sharing or consolidating services such as purchasing and payroll with neighboring jurisdictions. It was unclear if the freeze would continue beyond a second year.

Nassau County Executive Edward Mangano and Suffolk County Executive Steve Bellone attended the announcement and backed the plan.

"The only way that we're going to reduce the tax burden and bend the cost curve over time is to have governments become more efficient," Bellone said.

Mangano said the plan would "stimulate job growth in the county and the state."

Huntington Town Supervisor Frank Petrone said the town would do its part to follow the panel's recommendations. "Town taxes have stayed well within the 2 percent tax cap in Huntington and we plan to stay within the cap," he said.

Kevin Law, president of the Long Island Association, the region's largest business group, said homeowners would benefit from the freeze.

"Any type of tax relief for our residents and businesses is good news," he said.E.J. McMahon, head of the anti-tax Empire Center, an Albany think tank, said the plan amounted to an election-year "gimmick" that won't significantly help the economy.

He said the average homeowner might get a $90 to $200 tax credit.

Municipalities will say, "We never [consolidated] before, but because it will put $50 in people's pockets this one year, we'll do it?," McMahon said.

State legislative leaders gave the commission's proposals mixed reviews.

Senate co-leader Dean Skelos (R-Rockville Centre) said the panel advocated many ideas long championed by the GOP, such as the elimination of an energy surcharge. But he said the proposals do not go far enough.

"Shifting costs from one taxpayer to another would be a missed opportunity," Skelos said. "It's time to get to work on a comprehensive tax cutting and regulatory relief plan."

Senate co-leader Jeff Klein (D-Bronx) offered mild praise for the plan and said New York needs "more targeted" tax proposals.

Assembly Speaker Sheldon Silver (D-Manhattan) supported the "circuit breaker" as a way to protect some middle- and low-income property owners. But Silver indicated he wouldn't support tax cuts at the expense of key education programs.

"Any proposal should be premised on a principle of fairness to all New Yorkers, city residents, suburbanites and rural residents alike," Silver said.

The report will likely form part of Cuomo's 2014 agenda to be outlined in his State of the State address on Jan. 8.New York City is not covered by the tax cap and city residents would be excluded from the freeze.

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