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Legislature Approves Mortgage Tax Initiative to Support TCAT

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Legislature Approves Mortgage Tax Initiative to Support TCAT

Tuesday, December 18, 2012
The Legislature will seek State authorization to dedicate revenue from a proposed quarter-percent increase in the county Mortgage Recording Tax to support mass transportation, as is done in 24 other New York counties, to address the ongoing structural deficit experienced by Tompkins Consolidated Area Transit (TCAT). Through the action, approved by a vote of 13-1 the Legislature requests the County's State legislative delegation sponsor and support legislation to authorize such use under the "Additional Tax" element of the mortgage tax that counties are permitted to enact under New York State Tax Law. (Legislator Dooley Kiefer voted no; Legislator Kathy Luz Herrera was excused.)

While counties are permitted to enact the "Additional Tax," without State legislation authorizing a specific purpose, County Administrator Joe Mareane told legislators the revenue from such an increase would flow to the State or municipalities within the county. The Legislature's action does not levy the tax; it asks for State authorization for the requested purpose.

The 0.25% increase would bring the total county Mortgage Tax (a one-time tax on the value of a mortgage levied at the time of closing) to 1%. Current mortgage tax revenue is split between the municipality in which the transaction occurs and the State. The projected $850,000 in annual mortgage tax revenue would be allocated to TCAT to support operational and capital needs. Noting that Congressional "earmarks," the historical source of funding for bus purchases, are no longer available, County Administrator Joe Mareane cautioned that he sees the need to meet TCAT's needs as the greatest source of instability for the County budget and the property tax levy over the next five years. As well as sizable operating deficits, TCAT's upcoming capital needs are assessed at over $13 million, with more than half of that amount needed for bus replacement. The administrator said this approach, if such an increase is approved, would provide "a source of sustained general purpose revenue for TCAT."

Legislator Kiefer sought to broaden the requested purpose to address purposes other than mass transit, as may be needed in the future--'such as for education and other necessary purposes that serve residents' health, safety, and welfare--'maintaining that near-term transit funding challenges may not continue for the long term. That proposed change failed 13-1, with only Kiefer voting in favor. Legislator Carol Chock proposed the requested purpose be changed to "transportation," which failed 12-2, Chock and Kiefer voting in favor. Among other concerns raised during an hour-and-a-half of discussion, how partner shares would remain equitable in light of any future tax and whether TCAT should be asked to specify how such funding would be used.