Focused on taking the burden off Westchester County property taxpayers and combating the loss of the federal SALT deduction, Westchester County Executive George Latimer is calling for the passage of the Westchester County Property Taxpayers Protection Act. The Act would allow for freezing property taxes for the next two years, FY 2020 and FY 2021; allocate 30% of new revenues to local governments and school districts to assist their budgets and tax relief efforts; ensure an annual increase in the County’s reserve fund, as well as end reliance on one-shot revenues and borrowing for operating costs; and create sales tax parity across all of Westchester’s communities, bringing the rate in line with other counties including Rockland and Putnam, and other cities including White Plains, Mount Vernon and New Rochelle. The new countywide standard rate of 8 3/8% would still be lower than that in effect in Yonkers, New York City, Nassau and Suffolk Counties.
The additional 1% in sales tax is estimated to bring in about $140 million/year in new revenue, 20% of which will be shared with the local municipalities and 10% with the school districts. In exchange for this Act, Latimer has committed to maintain the County property tax levy for FY 2020 and 2021 at the same level as this year, FY 2019. This tax freeze will help address the expected increases for many residents and taxpayers from the new Federal Tax Plan, which eliminates all but $10,000 in state and local tax exemptions (SALT).
“This is about generating revenue without raising property taxes, by reaching sales tax rate parity,” Latimer said. “Westchester cannot meet its annual financial obligations in the years to come without steady new revenue; this position has been affirmed by the State Comptroller’s Audit of the County, and the three bond rating agencies that assess creditworthiness for governments. We will fall into State Fiscal Control, with our bond rating dropping further. Anyone who tells you otherwise is simply not telling you the truth. Further, Westchester cannot raise property taxes at any significant level over the next few years - we have reached a saturation point, given school and local taxes as well. As Governor Cuomo has said, and fought against at the federal level, the loss of the full SALT exemption will be hitting our property tax payers hard.
“In my first year, we kept our property tax levy increase below neighboring counties such as Rockland and Putnam, but even this level is unsustainable. We need non-property tax revenue to deliver our services – most of which is mandated by the State of New York. The plan I have presented is prudent and plausible and avoids us undertaking further draconian service cuts, massive layoffs and irresponsible one-shot sell offs of assets.”
Of the 70% that the County will collect, Latimer said there will be priority on rebuilding the County’s Reserve Fund. The goal is to grow it back to $150 million, up from the current $70 million. It is anticipated that the increase will satisfy the bond rating agencies, leading them, over time, to raise the County’s bond rating back to AAA.
Additionally, as it currently stands, the County will have a structural deficit in 2020 and 2021. It has been projected that if sales tax grows at 3%, and the County stays within the property tax cap the County will not be able to meet operating expenses. Latimer said the additional revenue source will also eliminate the need for one-shot finance proposals, and end borrowing for any annual operating expenses.
Mamaroneck Town Supervisor Nancy Seligson said the extra roughly $607k a year will go a long way for her town: “The County of Westchester needs to resolve a budget gap created by the previous County Executive who refused to adequately fund County government by not raising taxes for 8 years. A variety of efforts are required to raise much needed revenue. Westchester County currently has a lower sales tax rate than many other counties and cities. All villages and towns will benefit from the increase and the cities will not be harmed.”
An extra approximately $960k will be given to the village of Mamaroneck, Mamaroneck Mayor Tom Murphy said, “Westchester County, and all of the municipalities within the County, need another revenue source besides crippling property taxes to meet the infrastructure demands of aging suburbs. This is a creative revenue source and I applaud the County Executive’s efforts.”
Nearly $297k will be going to the Village of Larchmont under the plan, Larchmont Mayor Lorraine Walsh said, “I fully support the County Executive’s request for an increase in the County sales tax rate. Increased non-property tax revenue would help local governments meet their goal of staying under the tax cap, while maintaining or increasing the level of service provided to residents.”
Harrison Mayor Ron Belmont said an extra estimated $1.3 million dollars will help his community. “Westchester County residents pay one of the highest property tax rates in the country while having one of the lowest sales tax rates in the state. I am confident that a small increase in sales tax will not only promote economic stability, but will bring us in to parity with other counties in our region.”