With April 1st marking the beginning of a new fiscal
year, New York – along with other states – had to have handed their budgets
in. One aspect of this is the permanence
of the yearly 2 percent property tax cap will become permanent and $1billion
will be added to the education budget.
Another is the creation of the public campaign finance system which is
valued at $100 million .
Regarding transportation and infrastructure issues, Manhattan is
about to be subject to a congestion-pricing system. In addition, taxes on NYC real estate
transactions will see an increase. And
“mansion houses” (those that sell for more than $25 million) will be subject to
According to chairman of the Regional Plan
Association, Scott Rechler:
“If our transit system is the beating heart of our city, then our arteries are severely clogged, Congestion pricing is the right solution at the right time, and it is only fitting that New York City be the first city in the U.S. to incorporate it.”
of the budget was focused on earmarking funds for the MTA for New York’s
transit system and commuter railroads.
The option of changing the state income tax code to a different system is not totally abhorrent to New York firms. The idea of the code becoming a payroll tax system has indeed, not been completely rejected as this alternative is explored by the state.
The reason for the possible change, is that it could help those New Yorkers who have been negatively impacted by the recent restrictions that have been put on to state tax detections from federal returns (due to the massive US tax code restructure that took place at the end of last year). So now, Chief Executives who have some of the largest numbers of employees in their companies, are willing to consider this new system.
Other issues up for discussion concern the biotechnology industry. Just last week NYC government asked for proposals on the most effective use of $100 million funding and city lands to put toward the establishment of a life sciences hub in an effort to actually put New York in the playing field with cities like Boston and San Francisco. This is just part of a larger amount of money – $500 million in resources – New York has attributed to attract biotech investment.
For an “average person” who cares about their finances, “using trusts is one of the most important things [they] can do,” according to director of Pioneer Wealth Partners, John Blattmachr. This is what the New York attorney said at the recent estate planning conference held in Northern Trust, Naples. In its third year, the event was attended by 60 tax planners and financial analysts who heard Blattmachr say “in trusts we trust.”
He then went on to explain the reasoning for this statement. He said that: “it protects funds from claims from creditors, divorcing spouses and the government,” and, given that nearly 50% of marriages end in divorce these days, it is essential that one finds a way to protect their assets from an ex-spouse for the same of safeguarding family funds.
It is not only Blattmachr who understands the importance of trust funds. In an article written by Selena Maranjian, it was explained how “A trust, or trust fund…is especially useful for people with children who are still minors or for those who would like some of their assets to go to their beneficiaries without the hassle of probate.” She also said that it can actually “help you care for your loved ones, and defer taxes too.” Those are attractive concepts to everyone.
Blattmachr also points out that he believes trust funds come with no disadvantages, “unless the trustee is dishonest or becomes incompetent…[which can be a] problem, particularly for the elderly,” given that there is a significant increase in dementia with age, rendering seniors much more “vulnerable to sticky-fingered trustees.” But that issue, he adds is exactly why “people should not wait until they’re in their twilight years to set up an estate plan and choose a reputable and experienced trustee.”
A bill was recently passed in the senate requiring NYC to put a limit on how much money it raises from property taxes to a maximum 2 percent increase per year. The fact is, the limit is already in use in the rest of New York State. It is just NYC that is lagging behind.
However it might not be put in place so easily. The de Blasio administration is seriously against it, claiming it would result in a serious deprivation of billions of dollars for the city. Sometimes the property tax can get incredibly burdensome, such as what happened in 2003 when the property tax rate was increased by 18 percent in an attempt to stabilize recession revenues.
In 2004 property owner tax has increased 84 percent (totaling $22.6 billion). Further, homeowners have seen their yearly tax bill increase from an average of $4,607 from $2,354.
So this tax cap might be a welcome amendment to the city of New York.