Latimer Makes ‘Read My Lips’ Promise on Property Taxes
By Dan Murphy
Last week, we reported that a plan to increase the sales tax in Westchester County by one penny, 1 percent, was not a part of the recently passed state budget. Earlier this year, Gov. Andrew Cuomo said that the proposal, which would increase the sales tax across most of the county in exchange for not raising county property taxes for two years, did not belong in the state budget agreement, but could be adopted at a later date.
That later date has come, with state legislators approving the one penny sales tax increase and sending it to the governor’s desk, where he is expected to sign it. With the power of Westchester State Sen. Andrea Stewart-Cousins, who also serves as the Senate’s majority leader, behind the measure, the Westchester County Property Taxpayers Protection Act was likely to be approved for several reasons.
First and foremost, it comes with a “read my lips” promise by County Executive George Latimer not to raise property taxes over the next two years, 2020 and 2021. More on the political dangers of that promise later. Any time Westchester homeowners and taxpayers, who pay the highest property taxes in the nation, hear that even a part of their property tax bill will not be increased, it is welcome news. Just ask Rob Astorino, the former republican county executive who was able to win election and re-election as before losing to Latimer, for one reason and one reason only – not raising county property taxes for eight years.
Usually, an increase in sales taxes is considered a “regressive tax” because it hurts all residents of that community, including the lower-middle-class and the poor, who all have to pay the extra sales tax when they go food shopping or pay for everyday items.
But the sales tax increase in Westchester will not affect the large cities in the county, because Yonkers, White Plains, New Rochelle and Mt. Vernon already pay a rate of 8.375 percent – the rate that would go into effect for the rest of the county. So those communities, and elected officials in those communities, can easily support this sales tax increase because it does not affect their residents and also gives some of those same residents a 0 percent county property tax increase for two years. The sales tax increase will go into effect, and be paid for by residents of the county’s towns and villages, and the cities of Peekskill and Rye.
Westchester’s current sales tax of 7.375 percent is one point lower than neighboring rates on Long Island, and in Rockland and Putnam counties. The increased revenue for the county ($140 million over three years) will also replenish the county reserve fund and raise the county bond rating back to AAA. The county will also be able to halt a plan to sell 14 acres of the Bronx River Reservation park to balance the budget.
Before sending the plan up to Albany for approval, Latimer commented on the county’s financial standing. “If the proposal is included in the 2019 state budget as we have requested, the County Board of Legislators will then act on the proposals,” he said. “Westchester cannot meet its annual financial obligations in the years to come without steady new revenue. We will fall into state fiscal control, with bond rating dropping further. Anyone who tells you otherwise is simply not telling you the truth.
“Westchester cannot raise property taxes at any significant level – we have reached a saturation point, given school and local taxes, as well. In my first year, we kept our tax levy rate below neighboring counties such as Rockland and Putnam, but this level is unsustainable. We need non-property tax revenue to deliver our services.
“This plan is prudent and plausible and avoids us undertaking further draconian service cuts, massive layoffs and irresponsible one-shot sell off of assets. There will be much to talk about in the days to come. I will explain the plan in any forum.
“If you want honest talk from an official, here it is. I’m not here to pander to fear or partisanship, but rather to work together on all sides to stabilize our finances for the near term. I welcome the two-way dialogue,” said Latimer.
The two-way dialogue that Latimer welcomed two months ago has come in confusion from some county residents about how much revenues will be raised per year. The $140 million in additional sales tax revenue is not per year, but over a period of three years.
Another nit-pick criticism is that the one penny, or 1 percent increase is actually a 14 percent sales tax increase, because the plan will increase the sales tax from 7.375 to 8.375 percent, which is actually a 14 percent increase.
Depending on who you speak to, or listen to, the sales tax increase plan could either be political genius or disaster. The political genius could be if Westchester County government is able to live without any additional property taxes for two years, then Latimer, or his successor, could run on a record of providing property tax increases of 2 percent, 0 percent and 0 percent, while providing the same level of services and providing political peace and stability in Westchester County.
The political risk comes in making a pledge that you cannot keep. President George H.W. Bush made that pledge at the 1988 Republican convention with his infamous “Read my lips, no new taxes” pledge. Bush went back on that promise two years later, when he agreed to a budget deal with congressional democrats that raised taxes.
What is frequently not discussed about President Bush number 41 and his “read my lips” pledge is that he put country before politics, and by raising taxes with congressional democrats in 1990, our nation had a decade of economic growth and balanced budgets that has never been seen again.
Latimer runs the same risk. Westchester Journalist Phil Reisman, a frequent critic of Latimer on WVOX radio 1460 AM, recently asked what would happen if the county were unable to collect enough revenue from sales taxes because people were shopping more online and less in the malls?
Right now the analysis is on Latimer’s side. With neighboring counties already at 8.375 percent, and with Westchester’s largest cities also at the same, there is some rationale for a sales tax increase, the largest being that the homeowners of Westchester, who pay the highest taxes in the USA, will get a two-year reprieve on their county tax bills.
