State Legislature Passes Tax Reduction Plan

Senator David Carlucci (D-Rockland/Orange) and Assemblyman Ken Zebrowski (D-New City) voted in favor of new legislation to cut taxes for middle class taxpayers and bring tax relief to small businesses and non-profit organizations affected by the.  The two houses of the state legislature voted on the new tax structure Wednesday night and early Thursday morning.

The new tax structure was part of a larger economic reform package that included $50 million in additional relief for businesses, farms and municipalities devastated by recent flooding from Hurricane Irene and Tropical Storm Lee.  It also reduces the tax burden for manufacturers to incentivize job creation in the Hudson Valley.

Carlucci commented on the bi-partisan program.

“Middle class New Yorkers will have more money in their pockets and small businesses will no longer have to pay the job-killing MTA payroll tax,” said Carlucci.  “I came to Albany to help move this state forward and break the political gridlock that has plagued Albany for decades.”  

Zebrowski said under the new tax code, 99 percent of all New Yorkers will experience some tax relief.  A new tax bracket created for those earning more than $2 million annually will generate $2 billion over the each of the next three years.

“With this new revenue, we can focus on restoring aid to Rockland County school districts that are in dire need of additional funding,” Zebrowski said. “Making sure our schools have the necessary funds to help our children receive a better education is crucial to our communities as we move forward.”

The tax plan includes a tax break for almost four and a half million middle class taxpayers.  A breakdown follows:

Income Level

Previous Tax Rate

New Tax Rate

$40,000 to $150,000

6.85%

6.45%

$150,000 to $300,000

6.85%

6.65%

$300,000 to $2 million

7.85% - 8.97%

6.85%

Over $2 million

8.97%

8.82%

The plan includes reduction of the MTA Payroll Tax and establishment of a flood recovery grant program. 

The MTA Payroll Tax will be eliminated or reduced for more than 700,000 small businesses and non-profit organizations with payrolls under $1,250,000 and self-employed individuals making less than $50,000.  Private elementary and secondary schools and parochial schools, will be exempt from the tax.

The $50 million flood recovery grant program will allow recovery efforts to continue in regions impacted by Hurricane Irene and Tropical Storm Lee.  It provides $21 million for small businesses, farms, multiple-dwellings and non-profit organizations; allocates nine million dollars for county flood mitigation or flood control projects and an additional $20 million included in federal disaster declarations.

The $20 million is designated for property owners and non-profit groups that sustained direct physical flood-related damage costs not covered by other federal, state or local recovery programs.  Grants of up to $20,000 will be available to businesses included on the Small Business Administration's list of organizations that have sustained damage.

Flood mitigation and flood control projects would be eligible for part of the $9 million in grants money. The grants for each county would range from $300,000 to $500,000 but counties could jointly apply. Rockland is eligible since it is included on Federal disaster declarations list.

The additional $20 million included in federal disaster declarations will be distributed on an as needed basis.  Local governments will be permitted to let taxpayers impacted by the storms pay their property taxes in installments.

Additional provisions of the legislation include a Jobs Retention Credit for businesses with at least 100 employees that have been impacted by a natural disaster.  Firms would be eligible for the credit would be available to firms if they retained or expanded their workers' roles. The credit targets the financial services, manufacturing, software development, new media, scientific development and agriculture sectors. 

The legislation creates the state’s first-ever infrastructure fund to inject more than $1 billion into creating jobs to rebuild roads and bridges; parks, dams and flood control projects; upgrade water systems and educational facilities; and invest in energy efficient improvements to commercial and residential buildings.

 Zebrowski said additional unspent resources from the tax reform revenue will be placed in a new dedicated reserve fund that will be used toward future needs, such as local mandate relief and education.