Assemblymember Cahill: President’s Proposal to Eliminate Tax Deductions a Raw Deal for NY

Urges governor to lead by fighting against ill-conceived plan
January 4, 2005

Assemblymember Kevin Cahill (D-Ulster, Dutchess) expressed concern that a plan by President Bush’s administration to revamp the federal tax code would cost New Yorkers tens of billions of dollars in tax deductions. Mr. Cahill worries that if the plan is enacted, millions of middle- and low-income households would lose deductions they rely on to help make ends meet.

"One of Bush’s proposals eliminates the federal deduction for state and local taxes, including income and real property levies," Mr. Cahill said. "The effects of that could be disastrous for New York’s working families and it would be yet another example of the President ignoring the needs of our state. We’re already being shortchanged with federal homeland security funding and the lowest-in-the-nation Medicaid reimbursements; this is another bad idea New Yorkers cannot afford."

Despite being the victims of two terrorist attacks, New York receives less homeland security funding per capita than most states, and was second-to-last in the nation in 2003 Office of Domestic Preparedness Homeland Security grants. New York also suffered this year from the expiration of the Federal Medical Assistance Percentage program, costing taxpayers over $1 billion in lost Medicaid funding for vital health care programs.

According to The New York Times, about 38 percent of households in New York file for some sort of federal deduction of state and local taxes – including property taxes. On average, those households would lose the ability to deduct about $5,600 per year under the President’s plan.

"Governor Pataki devoted a lot of time and energy running around the country campaigning for the President and the Republicans in Congress this past year," said Mr. Cahill. "One would hope that all that effort would somehow come to benefit hard working New Yorkers. The Governor must go to his friends in Washington and demand that this proposal be put to rest."