Cuomo seeking support for fight
Wants Democratic governors to back rollback of tax cap
Gov. Andrew Cuomo enlisted seven other states with Democratic governors to join New York in an effort to roll back the 2017 Republican tax law’s $10,000 cap on state and local tax deductions (SALT), a provision that he described as amounting to “a declaration of economic war between Democratic states and Republican states.”
At the winter meeting of the National Governors Association here, Cuomo gathered with the governors of Connecticut, New Jersey, Illinois and Oregon to push revision of the SALT cap, telling reporters that “pardon the pun, (it) adds salt in the wounds both literally and figuratively.”
“It’s wrong, it’s divisive, it’s poisoning for this nation,” Cuomo said. “It’s a cancer in the American body politic and it’s spreading.”
Cuomo was quick to jump on statements by President Trump in an interview earlier this month with regional newspapers including the Times Union that he is “open to talking about” changes. In the interview, the president expressed surprise that the SALT cap could harm middle-class upstate New Yorkers and not just wealthier New Yorkers downstate.
Cuomo met one-on-one with Trump at the White House last week to plead his case.
Although Trump is known for 180-degree turns in his policy pronouncements, Cuomo said he believes the president is “going to have to be open to speaking about it, because it’s going to be at the top of the Congressional agenda.”
In addition to the governors from the four states at the Friday news conference, Cuomo has gotten Hawaii, Washington and Rhode Island to join his cause.
Although the tax-filing season remains relatively young, Cuomo said that state tax revenues are down 55 percent and the state already faces a shortfall of $2.6 billion. Many New York homeowners and taxpayers had some to rely on SALT deductions to help make life in a high-cost, high-tax state affordable.
Cuomo argued that New York and other states with Democratic governors essentially are being punished for “investing in education, health care, infrastructure. That’s why you have state and local taxes.”
For that reason, New York
is “between a rock and a hard place.” Raising revenues “compounds the problem but so does finding “areas to cut in already stretched budgets,” he said. “That’s where the federal government has put us at this time.”
Prospects for actual changes to the SALT provision are uncertain at best. Sen. Charles Grassley, R-iowa, chairman of the Senate Finance Committee, has already said will not reopen the tax bill to adjust SALT.
SALT, he argued, amounts to “a federal subsidy for states to raise taxes on their residents without political consequence.”
On Friday, Cuomo countered that New York is the nation’s largest “donor” state, meaning that it forks over $36 billion in federal taxes than it gets back in federal expenditures. By contrast, he said, Iowa gets back $3.5 billion more in spending than it pays in federal taxes.
Although SALT revisions face strong headwinds in the Senate, House Speaker Nancy Pelosi is prepared to push it through the House, now under Democratic control.
“Speaker Pelosi will put it on the table,” Cuomo said after the news conference. “The Senate won’t do it, but it still takes two to tango.”
SALT elimination or revision could be a bargaining chip when the Senate wants the House to act on legislation that it favors, Cuomo said. “This should be at the top of the Congressional agenda.”
Trump, Cuomo said, “doesn’t have an option. It is going to be an issue. The Democratic Congress is going to raise it. They have to raise it. When you target Democratic states and Democratic states control the Congress, it has to be on the table.”