Bellone Joins Westchester, Nassau County Executives In Calling For Repeal Of SALT Deduction Cap

A trio of downstate county executives is launching a suburban petition drive to urge Congress to repeal the cap on the state and local tax deduction, known as SALT, that was imposed by 2017’s Tax Cuts and Jobs Act.

The SALT deduction previously had no limit, meaning households could deduct 100 percent of their state income tax and local property taxes on their federal tax returns. Then the 2017 federal tax law capped the SALT deduction at $10,000 per household annually, starting in 2018.

For most Americans, the new cap had no effect on their federal tax bills. But for many suburban homeowners in New York State — where property taxes alone can exceed $10,000 annually — the new cap meant their itemized deductions would go down and, as a result, their federal income tax bill would go up.

The three county executives — Steve Bellone of Suffolk, Laura Curran of Nassau, and George Latimer of Westchester — blasted this as “double taxation” during a joint virtual press conference on Thursday, April 15. They are calling on suburban New Yorkers to tell their representatives in Congress to support the cap’s repeal.

Mr. Bellone, speaking from Washington, D.C., said capping the deduction resulted in the largest federal tax increase on middle-class homeowners in history. He also said that even before the cap, New York was already sending billions of dollars more to Washington than it got back in federal spending.

“We did not take that lying down,” he said. “We fought back. We worked together to push back against Washington’s massive tax increase. We formed a group with Westchester that passed a charitable trust fund that would have allowed homeowners to be able to contribute in ways that would have still been deductible on their federal taxes and on their state taxes.”

The IRS shot down that workaround, leaving local lawmakers with one option: appealing to Congress.

The makeup of Congress is much different now than it was when the cap was instituted in 2017. Back then, Republicans controlled the House and Senate. Now, the Democrats control both.

Mr. Bellone emphasized the importance of repealing the cap to provide relief to middle-class families as the counties seek to “build back better and stronger” while emerging from the pandemic.

The three county executives represent 4 million New Yorkers, and they are looking to expand the “suburban coalition,” he said. Ms. Curran called it a “triumvirate of Downstate suburbia” that is stronger together. “We’re going to keep making the case, fighting for our taxpayers, especially our suburban property taxpayers because they know that they’re being shortchanged,” she said.

Mr. Latimer said the three counties working together in a common effort hasn’t been seen before. “It’s going to take that type of common effort to make the important statement that we have to make,” he said.

The repeal of the SALT cap was done in a mean-spirited way, he said. “It was done in a one-party way, and it was done in a way that really represented a revenue offset to the tax breaks that they were giving out to large corporations and very wealthy individuals. And they did that on the back of middle-class taxpayers in White Plains, Riverhead, Mineola and all the communities in between.”

Mr. Latimer identified reasons why taxpayers in these areas have higher local taxes than other parts of the country, and defended them: “We provide services here that people want, services that help our area grow. We’re the largest metropolitan area in the United States of America. We have the greatest concentration of people, and whether you’re talking about the sewage generated by those people, or moving those people to and from their workplace, you need to have these additional local services — and they cost money, and they’re paid for out of your state and your local taxes.

“And to sort of expect that New York and New Jersey and Connecticut are going to turn into South Carolina and Texas tomorrow because of ideology just is not only unrealistic, it’s cynical.”

Another difference between this and earlier fights against the cap, according to Mr. Latimer, is that people have seen the change in their tax bills for two years now. “We have different decision-makers in Washington, and we have the real-world impact that people can see and feel, and we think that makes it a much more powerful case to make now,” he said.

The announcement coincided with the traditional date of Tax Day, but this year, due to the pandemic, federal tax returns are instead due by Monday, May 17.