Local pols praise Cuomo tax deal

City and state officials are giving largely positive reviews to a deal struck in Albany to restructure the state’s income tax code.

Under the agreement announced by Gov. Cuomo, Assembly Speaker Sheldon Silver (D-Manhattan) and Senate Majority Leader Dean Skelos (R-LI) on Dec. 6, most individual taxpayers will see a decrease in their rates.

A three-year-old surcharge on earners making more than $200,000 — called the millionaires’ tax in Albany — will expire at the end of the month, but a new tax bracket will be created for those making $2 million.

The new bracket will charge them 8.8 percent, less than they were paying under the surcharge, but more than if the surcharge had simply expired.

It is expected to net the state up to $1.9 billion in additional revenue. Those making between $40,000 and $2 million will pay graduated rates ranging from 6.45 to 6.85 percent.

“This is a very good deal,” said Assemblyman William Scarborough (D-Jamaica). “Some of us would have preferred to get a little more out of the high end, because we’re still funding a large debt. But in general, this is a good plan. It’s a progressive tax. And it’s simply not fair that people making $40,000 a year and people making $5 million get charged at the same rate.”

As chairman of the Small Business Committee, Scarborough auded the elimination of the MTA Payroll Mobility Tax for qualifying small businesses, money that covers more than 14 percent of the MTA’s budget.

“That boosts small businesses at a time when it’s needed,” Scarborough said.

The reduction is estimated to be about $250 million. Cuomo has promised that the MTA will be reimbursed by the state through other unspecified funding sources.

The deal exempts self-employed individuals making less than $50,000 from the MTA levy, as well as small businesses with payrolls of less than $1.25 million per year, public and private schools, which currently pay 34 cents per $100 of payroll, according to the office of Assemblyman Philip Goldfeder (D-Far Rockaway). It reduces the tax to 23 cents per $100 for firms with less than $1.75 million.

“It was the right thing to do,” Goldfeder said.

Assemblyman Mike Miller (D-Woodhaven) believes the tax code changes are not only more fair, but will stimulate spending and the state economy. He said the reduction of the MTA payroll tax will create a more business-friendly environment in his 38th District.

“This legislation is great news for small business,” Miller said in a statement.

“The MTA payroll tax was simply an unfair burden on small business and non-public schools alike, many of which are struggling to survive,” said Councilman Peter Vallone Jr. (D-Astoria) in a statement. “Our small business owners and educators are the backbone of our state and can breathe a sigh of relief today

Councilwoman Elizabeth Crowley praised Cuomo for his “strong leadership” in reaching the new tax deal.

“Working families see some relief and those who are very comfortable can afford to pay a little more,” she said.

Scarborough too said that the wealthier are in the best position to pay more, and acknowledged that in theory they are also best situated to leave the city for lower-taxed states.

“But they haven’t, even with the surcharge,” he said. “And that is being eliminated.”

Scarborough and Miller also praised the Albany agreement for its inclusion of $25 million in 2012 to fund summer youth employment programs throughout the state.

“And New York City traditionally receives about 60 percent of that money,” Scarborough said.

But not everyone was on board. A coalition of the Tri-State Transportation Campaign, The Straphangars Campaign, the Regional Plan Association and the General Contractors Association of New York applauded the effort to limit the impact of reducing the MTA tax, but has concerns.

“The problem with this is three-fold,” a coalition statement said.

The groups claim that estimates of what is needed can be incorrect, exposing the MTA to serious financial risk; that payrolls can grow while subsidies do not; and that subsidies from the state can be lowered at any time, such as was done with appropriations for student MetroCards.

They called instead for the private schools and small businesses to pay the taxes and then get reimbursed by the state.

Those groups and others also are protesting defeat of a proposed “transit fund lockbox” that would prevent raids from MTA accounts for other spending.

And not on board at all — but for different reasons — is Assembly Minority Leader Brian Kolb (R, I, C-Canandaigua).

“From what has been reported in the media so far, the bottom line is that taxes are being raised in New York State and we still are not dealing with our state’s serious spending problem,” Kolb said in a statement on his website.

“Tax hikes have never been the answer for creating more private sector jobs and long-term prosperity for New Yorkers. That still holds true today.”

Kolb and others decried what they said was a secret deal cut behind closed doors by “three men in a room.”

Mayor Bloomberg was reserving judgement last week.

“I’m only concerned about the effect on New York City, and I haven't read the legislation yet so we really don’t know what that effect is going to be,” he said. “I’m sympathetic to the governor who inherited a difficult fiscal situation. He’s trying to do something about it and I’m not going to tell him how to do his job.”