Taxpayers on both sides of the Hudson River are losing billions a year due to the federal government’s SALT property tax limit — and Governors Andrew Cuomo and Phil Murphy want Congress to put an end to the costly cap.
The respective governors of New York and New Jersey spoke to reporters at Cuomo’s daily press briefing Friday and called on Congress and the President to get rid of the SALT (State and Local Taxes) cap, a relic of the previous administration’s “tax cut” bill of 2017 which, they said, disproportionately harmed both states.
The SALT cap — which limits federal tax deductions for state and local tax payments at $10,000 — is causing New York state to lose about $34 million a day in tax revenue, according to Cuomo. Murphy said the cap cost the Garden State about $3 billion last year.
Both New York and New Jersey sorely need every penny they can get amid the COVID-19 pandemic, which has hit the states hard and blown massive holes in their budgets. Both Cuomo and Murphy publicly appealed to Congress and President Joe Biden to cut the SALT out of their spending diets for good, and ease the pain of property owners.
“We need to repeal SALT, because every day that SALT is still in place, you have people paying more in taxes that they shouldn’t be paying, and it hurts this state and other states that were victims of the SALT attack,” Cuomo said.
Murphy agreed with Cuomo, noting that, for years, both New York and New Jersey have paid more in federal taxes than it received back in federal aid. The SALT cap has only aggravated the disparity, in his view, at the cost of both government and taxpayers alike.
“It is high time that this thing gets taken off the books,” Murphy said. “The longer it stays on, the more people can get hurt.”
Shortly after Cuomo and Murphy spoke, Queens/Long Island Congressman Tom Suozzi agreed with their call. Suozzi and Senate Majority Leader Chuck Schumer, of New York, introduced companion legislation in the House and Senate repealing the SALT cap.
The measure stands a solid chance of becoming law now, as both houses of Congress and the White House are in Democratic control.
“The cap on the SALT deduction was a target on blue states and a real body blow,” Suozzi said. “Every day the SALT cap is in place, the taxpayers of New York are hurting. Since coming to Congress, I have worked on this issue relentlessly. In 2019, my legislation to restore the SALT deduction was passed in the House of Representatives, only to die in the Senate led by Mitch McConnell. The people of New York are hurting. Fortunately, Senator Schumer is now the Majority Leader of the Senate, and last week he and I introduced companion legislation to restore the SALT deduction. Congress must act immediately.”
The two governors also implored Congress to agree to distribute more of the $350 billion in state and local government aid in the upcoming budget bill to New York and New Jersey, both of which were the hardest hit by the COVID-19 pandemic last March and April. Cuomo likened the situation to a natural disaster such as a hurricane, noting that the places hardest hit by such a catastrophe always receive the most aid to rebuild and recover.
“When a state gets hit by a hurricane, that state gets relief,” he said. “The places that paid the highest price for the emergency” get the most help, “and our state and our region paid the highest price for the emergency” of COVID-19.