It’s a rare occasion for numerous elected officials to congratulate one another on raising taxes, but this time was different.
Westchester County Executive George Latimer, along with dozens of elected officials and school district leaders at Greenburgh Town Hall July 8, rolled out the county’s new plan and responded to the recent passage of the Westchester County Property Taxpayers Protection Act, which raised the Westchester sales tax by 1%.
“When we deal with the issue of sales tax which is what generates the revenue that you’re about to see, we understand that sales tax is seen as a regressive tax, however, property taxes are a more regressive tax,” said Latimer at the press conference. “What we’ve done today … is give us sales tax parity, so that if you buy a product in Waccabuc you pay the same sales tax that you would pay in White Plains.”
The act, which takes effect Aug. 1, raised the county’s sales tax by 1% in its 20 villages, 19 towns, and the cities of Peekskill and Rye, bringing it up to 8.375%, on par with Mount Vernon, White Plains and New Rochelle. (Yonkers currently has a sales tax of 8.875%.) 4% is levied by the state, 4% by the county and 0.375% to fund the Metropolitan Transportation Authority.
The state’s 2% property tax cap, first instituted in 2011 and renewed periodically, was made permanent in the 2019-20 budget.
The act was passed to lessen the blow of the Tax Cuts and Jobs Act, a federal act which limited property owners’ state and local tax deduction (SALT) to $10,000, a hard hit for many residents in Westchester.
The county property tax cap will be frozen at 2% for 2020 and 2021, therefore the 2020 tax levy will be $571 million — the same as 2019.
Of the nearly $70 million to be collected, 20% will go to local municipalities and 10% will go to school districts.
As the new sales tax kicks in next month, Scarsdale Village will get an estimated $423,357 in revenue in 2019 and $918,124 next year. The school district will likely gain $221,087 in new 2019 revenue, with $479,456 to come in 2020.
In Edgemont, the school district can anticipate an additional $91,917 this year and $199,339 next year.
“We have seen years of reduced funding from the state and other sources and increased pressure on our residents,” Scarsdale Mayor Marc Samwick told the Inquirer. “We are very encouraged to see recognition of those pressures and to see county and state leaders come together to provide other revenue sources.”
“While we don’t want tax increases ever, in this case there are benefits for residents,” Samwick said, because the windfall — which amounts to about 1.5% of the total operating budget for next year — will help the village keep local property taxes under control while still maintaining a high level of services.
“The bottom line is that we have never had such a high percentage — about two-thirds — of village revenue coming from property tax, so we are very pleased to have county and state help to diversify our revenue sources,” the mayor said.
“With this new revenue stream, which was approved with overwhelming bipartisan support by the Board of Legislators, we’re able to stabilize the county’s finances,” said Board of Legislators Chairman Ben Boykin. “That’s new money for school districts and municipal governments that doesn’t have to come from property taxes.”
“This is the end of one-shot revenues and borrowing for operating costs,” said Latimer. “We now have a creative source of revenue that is not an additional burden on the county’s property taxpayers.”
According to ATTOM Data Solutions, which collects data from more than 3,000 counties, “Among 1,408 counties with at least 10,000 single-family homes, those with the highest average property taxes on single-family homes were largely located in the greater New York metro area, led by Westchester County, New York ($17,392) … an effective tax rate of 2.9%.”
U.S. Rep. Nita Lowey, a Democrat whose Congressional District 17 comprises all of Rockland County and parts of central and northern Westchester, stated in a July 11 press release that, in her district, 45 percent of taxpayers had relied on the SALT deduction at an average of $26,000.
On July 17, New York State Attorney General Letitia James filed suit against the IRS to have the rule struck down.