NY leaders are fuming: How the tax bill affects the state

ALBANY – Gov. Andrew Cuomo and Democratic leaders in New York ripped the Senate’s version of the tax-reform bill that passed in Congress early Saturday.

Cuomo said the Senate version is no better than the House bill passed earlier this month that would end state and local tax deductions, which would particularly hit high-tax states like New York.

The Senate bill was initially worse for New York than the one that ultimately passed overnight: It retains property-tax deductions up to $10,000 a year.

But Cuomo and other Democratic officials said the change is little solace for a state that gives $40 billion more in tax revenue to Washington than it receives in return.

"New York, they're using as a piggy bank to finance the tax cuts in other states in the Midwest and in the south. That's exactly what they're doing," Cuomo said Saturday before he left for his third trip to Puerto Rico since a hurricane ripped through the island in September.

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Like the House bill, the Senate plan would nearly double the standard deduction and expand the child-tax credit.

It would let tax filers deduct mortgage interest up to $1 million, while the House bill would cap it at $500,000.

The Senate bill would also repeal the individual mandate to buy health insurance under the Affordable Care Act known as Obamacare -- a move that would impact New York's robust health exchange that enrolls more than 4 million New Yorkers each year.

Now the Senate and House will look to reconcile their plans in hopes of striking a deal before year's end.

Republicans and the White House praised the Senate bill's passage.

"The policies in this bill will cut taxes for hardworking families and put our economy on a path of sustainable economic prosperity and job creation," the White House said in a statement.

"We have a once-in-a-lifetime opportunity to reclaim America’s great destiny."

For New York households that itemize their taxes, limiting how much they could deduct would have significant impact on people's finances -- especially downstate, which has among the highest property taxes in the nation.

For example, the average property-tax bill in Westchester County is $15,000, the most of any county in New York, a report last month from state Comptroller Thomas DiNapoli said.

If a final bill is approved and signed by President Donald Trump, state and local governments, as well as schools, fear a loss of tax revenue -- as well as pressure to lower municipal taxes to offset the cut in income-tax deductions.

"New Yorkers will be especially hard hit," the New York State United Teachers union said in a statement.

"The elimination of the state and local tax deduction will undoubtedly lead to massive tax increases for many middle-class families, taking money out of their household budgets so the rich can get richer."

Cuomo and other Democrats have pressured Republicans in Congress from New York to reject the tax reform.

While both Democratic Sens. Kirsten Gillibrand and Minority Leader Chuck Schumer railed against the measure, the GOP House members have been split.

Four of the nine members -- upstate Reps. Chris Collins, Tom Reed, John Katko and Claudia Tenney -- voted for the bill last month.

“Thankfully, the fight isn’t over. We can win this, but only if we all get involved," New York City Mayor Bill de Blasio, a Democrat, said.