I didn't know where to post this, I figured shop til you drop would be the best section.
From this morning's New York times
From this morning's New York times
Mayor Michael R. Bloomberg is proposing to cut property taxes by roughly 5 percent and eliminate the city sales tax on clothing and footwear as New York enjoys the bounty from its booming economy and real estate market, city officials said yesterday.
Mr. Bloomberg plans to outline his proposals today in his annual address to the City Council. The property tax cuts, which would be in addition to an existing $400 annual rebate for homeowners, would apply for at least the next fiscal year, aides said, while the sales tax cuts would be permanent. The entire tax relief package, which also includes measures meant to benefit small businesses, would consume $1 billion of the city’s $55 billion budget.
The tax cuts represent a departure for Mr. Bloomberg, who last year used the bulk of a $5 billion surplus for a reserve fund to pay future health care costs and to offset projected deficits. This time, Mr. Bloomberg concluded that given the city’s overall fiscal health, revenues that had come in so much higher than expected should be shared with taxpayers and plowed back into the economy, aides said.
The proposals are likely to further burnish the mayor’s reputation among New Yorkers, which took a heavy beating during his first term, when he pushed through an 18.5 percent tax increase. Mr. Bloomberg is in his second and final term, and has drawn increasing interest as a potential candidate for national office, and his decision to cut taxes fuels speculation about his future.
The mayor’s proposal is likely to get a sympathetic hearing from the City Council, whose members have been calling for tax relief and who set the tax rate as part of the budget process.
City officials, who briefed reporters about the proposals on the condition of anonymity, declined to discuss the cuts in detail.
But, they said, the city was flush enough to set aside $750 million for the property tax cut, at least for the fiscal year beginning in July, which would translate into an average overall reduction of 5 percent. The average yearly tax bill for a condominium owner is $6,449, so a 5 percent cut would translate to $322 annually. The average tax bill on a house is $3,098, and a 5 percent cut would save $160.
The officials cautioned that they could not yet say precisely what a $750 million cut would mean for different types of properties because single-family homes and condominium and co-op apartments are taxed at different rates through a complex formula whose variables have not yet been set for the next year.
Officials did say that they took into account the new tentative assessment roll announced last week, which shows property values on the rise. Mr. Bloomberg plans to commit to only one year on the property tax break because, one aide said, “he’s comfortable that the city can afford the $750 million reduction or cut, but not confident that he can guarantee it on an ongoing basis.”
Although the officials would not say how large the budget windfall is or describe its source in detail, in recent years the city has benefited from taxes on both the enormous volume and size of real estate transactions and from huge profits on Wall Street.
Last week, city officials said that the value of all city properties increased 19 percent last year, a sharp rise at a time when many real estate markets were cooling or declining.
In announcing surpluses in the past, Mr. Bloomberg has often tamped down expectations about the health of the city’s finances, and has been accused by some budget experts outside his administration of using revenue estimates that were too low as a tactic to limit spending.
The rest of Mr. Bloomberg’s tax cut proposals would require state approval, aides said.
The mayor has already begun seeking an extension of the popular $400-a-year property tax rebate for the owners of one-, two- and three-family homes and co-op and condominium apartments through 2009. That rebate started in 2004, but the annual program will end if the state does not reauthorize it.
Bloomberg administration officials said that reducing the property tax rate was needed to reauthorize those rebates, since when Albany originally granted permission for them, lawmakers required the city to lower its overall tax rate in order to extend the rebate program past 2006.
Under the mayor’s sales tax proposal, an existing exemption from the 4 percent city sales tax for clothing and footwear under $110 would be extended to purchases above that amount. The city cannot, however, expand the parallel exemption for clothing items under $110 from state sales tax and a Metropolitan Transportation Authority sales tax surcharge to purchases above that amount. So those items would still be subject to the state and M.T.A. tax, a combined 4.375 percent, rather than the current 8.375 percent city, state and M.T.A. tax.
Such a change would make clothing sellers in the five boroughs more competitive with those in New Jersey, where all clothing is exempt from the sales tax. In Connecticut, clothing under $50 is exempt from the state’s 6 percent sales tax.
Finally, Mr. Bloomberg is proposing changes to business taxes that would bring city policy more in line with federal and state provisions, officials said. Those include increasing deductions, creating credits and simplifying filing requirements for unincorporated business and some corporations, with an eye toward helping small-business owners.
source: http://www.nytimes.com/2007/01/17/nyregion/17bloomberg.html?_r=1&ref=nyregion&oref=slogin
