The State Legislature has passed the $175 billion state budget for Fiscal Year 2019-20. The budget includes nearly every priority the Governor outlined in his State of the State budget message in January.
On the tax front, the budget includes a permanent property tax cap, and – instead of a recurring pied-à-terre tax – the state will raise the so-called “mansion tax” and the real-estate transfer tax on multimillion-dollar properties. Those taxes will be one-time fees and raise a combined $365 million. T he tax would be increased in seven “progressive” tiers: Homes sold for between $2 million and $3 million would see an increase of 1.25%, and the increase would ” top out” at 4.15% on homes sold for $25 million or more. Homes that are sold for $25 million or more would also see an increase in the state transfer tax, from 0.4% to 0.65% for residential New York City properties. That would bring the total to 4.55% for the most expensive homes – more than tripling current rates. New York City will also become the first city in the country to introduce congestion pricing.
Among the Governor’s other stated objectives included in the budget are a limited plan to publicly finance campaigns and bail reform. The budget addresses some campaign finance reform by guaranteeing a small-donor match system, but details were left up to a newly created commission that would determine key details like the ratio of the match and contribution limits.
In addition to reaching a timely budget, the Governor was able to achieve a $10,000 legislative pay raise (which was dependent on the timely budget) as well as a payraise for himself from $179,000 annually to $200,000. Cabinet secretaries and the Lt. Governor also received raises. The Governor stated: “This is the best budget that has been produced since I’ve been governor and I applaud all the people who worked on it.”
Assembly Speaker Heastie (D-Bronx) was less enthused, noting: “I’ll be the first one to say that this is not a great budget. There’s not a lot of happiness in this budget. There’s a lot of things that are missing in this budget.”
The Senate and Assembly Democratic Majorities did achieve some progressive goals that had been stopped by the Republican Senate in previous years including:
- a ban on plastic bags;
- a suite of criminal justice reforms;
- a provision making permanent the property tax cap
- codification of parts of the Affordable Care act into state law;
- an increase of school funding; and
- to create the framework of a statewide public campaign financing system.
With the 2019-20 state budget now completed, there are approximately three months remaining in the 2019 legislative session. T he post-budget session will likely consider some form of marijuana legislation. Governor Cuomo said New York will pass a law to legalize recreational marijuana – left out of the final budget – before the State Legislature adjourns in June, although supporters are concerned that a stand-alone bill may not have the support to pass.