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Cuomo Talks State Budget, SALT Tax Deductions

At the end of a hard state budget season, Gov. Andrew Cuomo didn’t pull his punches for the federal government.

On Tuesday, Gov. Andrew Cuomo gave reporters an overview of the budget that was passed by the state legislature late last week, hitting the fight with the federal government regarding the SALT tax deductions and discussed identifying political campaign ads, adding a tidbit about Russian collusion to the mix.

“This was probably the toughest budget that we’ve had to do because we’re battling a hostile federal government,” Cuomo said. “It is hostile in terms of the values of New Yorkers, and it’s also hostile to the economy of New York.”

Cuomo said the federal tax plan that included changes to the deduction of SALT was the first straw. SALT tax deductions allowed residents to deduct state and local taxes from federal taxes. The provision was capped at $10,000 during the passage of the new tax plan. Cuomo said New York has not yet felt the “full ramifications” of the SALT tax deduction because they won’t go into effect until next year.

“When you eliminate the deductibility of state and property taxes, that is a serious blow to New York’s competitiveness,” he said. “(The cap) gave a false comfort to Upstate New York because many people don’t pay $10,000 in property taxes and income tax. The truth is many more people do, and what it is going to do is it’s going to affect the businesses and higher income people in Upstate New York, which will look at those 38 other states and say ‘I can go anywhere else and save money.'”

Cuomo said as an answer to the change in the deduction, the state passed a “radical” provision that transfers income tax to a payroll tax. He said wages paid by an employer are deductible and the employer is held harmless.

“We also set up set up charitable institutions where rather than paying a property tax, you can donate to a charitable institution and you can get the charitable deduction,” Cuomo said. “We’re the first state in the nation to do that. It’s not a perfect solution, the perfect solution is to repeal the SALT provision, but for that you need a democratic congress. That’s something I’ll be working on in November.”

Cuomo said he hoped that the provisions were enough to convince residents they didn’t have to “pack their bags” today.

When it comes to the environment, Cuomo discussed funding $2.5 billion for clean water that can be used for infrastructure and pipes. He said $65 million for the Algal Bloom Plan was also included in the budget.

“These algae blooms are a real problem,” Cuomo said. “They’re in upstate lakes, and many of the lakes are used for drinking water. There is no one cause. Different lakes have different factors. If we don’t get ahead of this, the lakes will not only be unusable for tourism, but they’ll be unusable for drinking water.”

Filtration systems would have to be installed if the problem got out of hand, Cuomo said. However, he said the technology to filter the toxic bacteria that cause algal blooms does not exist yet, and even if it did, the systems would be very expensive.

“So the best course is to nip it in the bud and stop the algae blooms before they get worse,” he said.

Cuomo said there will be another round of Regional Economic Development Councils for about $750 million. He said the councils have been working well. Likewise, there is $100 million for the Downtown Revitalization Initiative.

“The millennials are the reverse of their parents,” Cuomo said. “Their parents moved out to the suburbs from the inner city. They wanted the house; they wanted the backyard; they wanted the patio; they wanted the barbecue. Maybe because the millennials grew up there, the millennials now want to be in downtown areas.”

There are beautiful downtown areas in New York, but they need to be revitalized, Cuomo said, making the initiative pertinent. He said during the development movement for the suburbs, the downtown areas decayed.

“We now have to reverse that development trend,” Cuomo said.

Cuomo said there will also be a shared services program that will ask counties to continue to pursue sharing more services. Cuomo said he “doesn’t accept” that towns and villages cannot share more services.

“I understand the cultural mindset that everyone wants to have their own (equipment), but we can’t afford it,” he said.

Cuomo said the National Comedy Center will receive $50 million. He said he will “go and do a routine.”

“As you know, I am a funny, funny guy,” he said wryly.

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