Release #452-00

 

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Sunny Mindel / Lynn Rasic (212) 788-2958

MAYOR GIULIANI SIGNS BILL REDUCING CITY PERSONAL INCOME TAX SURCHARGE

Remarks by Mayor Rudolph W. Giuliani at Public Hearing on Local Laws

The bill before me today is Introductory Number 825, sponsored by Council Member Berman in conjunction with my Administration. This bill, effective January 1, 2001, would reduce the surcharge that the City places on the personal income tax.

In 1991, the City began charging residents a fourteen-percent surcharge on their personal income tax. At the time, residents were promised that the surcharge would be temporary. Today we take the first step toward fulfilling that promise by significantly reducing the surcharge. The reduction will save New Yorkers $87 million in 2001 and over $200 million by 2004.

Since 1994, my Administration, in conjunction with the City Council, has worked to undo the heavy tax burden that the City had imposed on its residents and businesses over the years. Unfortunately, recent actions by the State Legislature directly impacted the City's ability to further reduce taxes. Last year, the Legislature strained the City's budget by imposing a pension COLA that will cost hundreds of millions of dollars in the coming years. A year earlier, the Legislature eliminated the commuter tax, depriving the City of over $500 million annually.

Despite these actions in Albany, City residents now pay over two billion dollars less in taxes than they did seven years ago. The savings are a result of a wide array of tax reductions and eliminations. For example, in December of 1998, we dropped the City's 12.5% personal income tax surcharge, saving taxpayers $779 million in Fiscal 2001. We have also eliminated the sales tax on clothing and shoe purchases under $110; significantly cut the hotel tax; provided real property tax relief to co-op/condo owners; and drastically reduced the commercial rent tax. In addition, my Administration persuaded Albany to add a personal income tax component to the State STAR property tax relief program to accommodate the large number of renters in New York City. The STAR program will take effect in January 2001.

The reduction in the personal income tax surcharge is symbolic of the change in the City's philosophy of government. The fact that New York City imposes the surcharge, a tax on taxes, recalls the City's out-of-control tax and spends days. Those days are over. During the last seven years, my Administration has cut taxes more than any other Administration in the history of the City. By significantly reducing the surcharge today, we augment the new policies that have slashed City taxes to their lowest levels in thirty years.

For the reasons previously stated, I will now sign the bill.

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