NY Senate Republicans Propose Tax Cuts, Credits to Combat Unaffordability

Introduction to the Proposal

ALBANY, N.Y. (NEXSTAR) — State Senate Republicans unveiled a series of bills on Wednesday targeting the affordability crisis, proposing tax cuts and cost reductions for families and businesses. The proposals follow the Senate Democrats’ recent $259 billion budget plan, which—according to the Senators—will aggravate financial strain on New Yorkers.

Criticism of the Current Budget

Senate Minority Leader Rob Ortt criticized the budget for increasing spending and taxes, calling it unsustainable. He and the other Republican senators at the press conference announcing the legislative package framed it as a necessary shift away from the Democratic spending agenda. They want Senate Democrats to include the proposals in the final state budget, arguing that New York deserves relief from the rising cost of living.

Details of the Proposal

Senate Republicans argued that their proposals represent immediate, tangible relief by easing the cost of living, reducing financial burdens, and promoting economic growth. Their legislative package, part of the GOP’s “Liberate NY” agenda, would cut personal and small business tax rates, lower utility costs, and help first-time homebuyers. Other proposals included exempting state taxes on cash tips and overtime pay, and providing a $1,000 "baby bonus" tax credit for parents of newborns.

Specific Bills and Their Provisions

• S3914 would let New Yorkers avoid state income tax on overtime pay starting in 2026, when they’d be able to subtract that pay from federal income.
• S587 would let New Yorkers subtract cash tips counted as wages from their income and state taxes starting this year. This would mean that servers, bartenders, and other tipped workers take home more money.
• S4487 would give an Empire State Child Tax Credit of $1,000 for each newborn, starting in 2026. Parents who claim a newborn as a dependent would be eligible, even if it’s more than what they owe in taxes.
• S850, from Sen. Patricia Canzoneri-Fitzpatrick, would create a first-time homebuyer tax credit covering five years, starting in 2026. The credit drops, from covering 50% of property taxes in year one of home ownership to 10% in year five. Buyers who haven’t owned a home in the last three years would be eligible.
• S1031, from Sen. Rob Rolison, would change how public utility costs are paid and create a ratepayer protection tax credit. It’s supposed to prevent companies from externalizing their costs related to state-mandated climate mediation. New Yorkers who pay utilities and make under $250,000 would be eligible for the credit.
• S1487 would lower tax rates for businesses with a base income up to $500,000 starting in 2027, with more cuts in 2028 for those earning $400,000 or less. The bill also expands eligibility for small business deductions.
• S1559 from Sen. Anthony Palumbo would change how New York calculates the STAR property tax exemption and state income tax rates. Part A changes the "enhanced STAR" exemption base amount each year to match inflation, doubling it starting in the 2025-2026 school year. Also, the basic STAR exemption increases to $60,000.

Tax Rate Changes

Part B of S1559 lowers income tax rates. It changes the income brackets and the tax percentages for different income levels. These changes affect people filing as single, married filing jointly, and married filing separately, lowering tax rates in 2025 for 2026’s tax return. For single filers:

• Income up to $12,000 per year: 2%
• $12,000 to $16,500 per year: $240 + 2.5% of the amount over $12,000
• $16,500-$19,500 per year: $353 + 3.25% of the amount over $16,500
• $19,500-$30,000 per year: $451 + 3.90% of the amount over $19,500
• $30,000-$100,000 per year: $861 + 4.45% of the amount over $30,000
• $100,000-$250,000 per year: $3,976 + 4.65% of the amount over $100,000
• $250,000-$1,500,000 per year: $10,951 + 6.85% of the amount over $250,000
• Over $1,500,000 per year: $96,576 + 8.82% of the amount over $1,500,000

For married couples filing jointly, the percentage rates are the same, but the dollar amounts are all double those for single filers.

Conclusion

The proposed tax cuts and credits by NY Senate Republicans aim to alleviate the affordability crisis in New York by reducing the financial burden on families and businesses. With a focus on easing the cost of living, promoting economic growth, and providing relief from the rising cost of living, these proposals offer a comprehensive approach to addressing the state’s affordability issues. Whether these proposals will be included in the final state budget remains to be seen, but they represent a significant effort by Senate Republicans to combat unaffordability in New York.

FAQs

• Q: What is the main goal of the NY Senate Republicans’ proposal?
  A: The main goal is to combat the affordability crisis in New York by proposing tax cuts and cost reductions for families and businesses.
• Q: What are some of the key proposals included in the legislative package?
  A: Key proposals include cutting personal and small business tax rates, lowering utility costs, helping first-time homebuyers, exempting state taxes on cash tips and overtime pay, and providing a $1,000 "baby bonus" tax credit for parents of newborns.
• Q: How do the proposed tax rate changes affect single filers and married couples filing jointly?
  A: The proposed changes lower tax rates in 2025 for 2026’s tax return, with specific income brackets and tax percentages for single filers and married couples filing jointly.
• Q: Will these proposals be included in the final state budget?
  A: It remains to be seen whether these proposals will be included in the final state budget, as they need to be agreed upon by the Senate Democrats.