Trump plan to end exemption for property tax gets chilly reception

ALBANY — Leaders of statewide groups representing county governments and real estate professionals are among those registering strong concerns about President Donald Trump’s proposal to do away with the deduction for property taxes on federal returns.”I think eliminating that tax deduction will definitely curb home ownership,” said William Cherry, the president of the New York State Association of Counties and the elected treasurer of Schoharie County’s government.

He said the ability to take a deduction for property taxes “makes perfect sense because otherwise you are paying taxes twice.” He noted his comments reflected his own views based on his personal experiences, as the Association of Counties has not taken an official position on the tax plan advanced by the Trump administration last week.

Also voicing strong reservations with the proposed elimination of the deduction for property taxes was Christine “CJ” DelVeccio, the president-elect of the New York State Association of Realtors.

“The biggest economic driver we have across the United States is real estate — home ownership — and this would hurt home ownership,” DelVecchio said.

DelVecchio said states such as New York and California, both strongholds for the Democratic Party, would likely get the brunt of the negative impacts from Trump’s proposal.

Other elements of the Trump tax plan include the doubling of the standard deduction, trimming the current seven tax brackets to three and eliminating an assortment of tax breaks.

The one-page plan provided few details, with Treasury Secretary Steven Mnuchin explaining that the White House wants to create relief for the middle-class, not the wealthy.

But Rep. Brian Higgins, D-Niagara Falls and Buffalo, said Thursday the Trump plan is “based on a discredited economic theory known as trickle-down economics” — with the biggest beneficiaries being the rich.

Higgins said he was optimistic that the New York and California congressional delegations will lead the fight against eliminating the exemption for state and local taxes. “I think you will see bipartisan support for rejecting that idea.”

On the other side of the congressional aisle, Rep. John Faso, R-Kinderhook, said he was concerned that the deduction for property taxes could be in jeopardy because some of his colleagues from states with lower taxes view it as a subsidy for “high spending” states such as New York.

“I respond this is a matter of federalism, and you shouldn’t subject this income to a double taxation,” Faso said on public radio station WCNY last week.

A spokesman for Rep. Elise Stefanik, R-Willsboro, would not indicate whether she has a position on the specific proposal to wipe out the deduction for property taxes. Tom Flanagin, the spokesman, said in an email response that Stefanik is “a strong supporter of fundamental tax reform” and “applauds” Trump for making changes to the tax code a priority.

The tax debate is playing out in Washington as New York school boards prepare to put school budgets to voters May 16.

The state School Boards Association reported Wednesday that the average proposed school district tax levy increase for 2017-18 will be 1.48 percent. The percentage of the increase, the association noted, is more than half a percentage point below the 2 percent property tax cap.

The association also said just 12 school districts will try for tax levy overrides this year, down from 36 last year, because their increases exceed their allowable tax levy limits. The districts seeking voter approval for the override need to get the backing of at least 60 percent of voters.

Niagara Falls is one of the 12 districts in New York that is trying for approval for an override.

Joe Mahoney covers the New York Statehouse for CNHI’s newspapers and websites. Reach him at jmahoney@cnhi.com

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