Message from the Mayor: SALT deductions, Leaf Blower laws, condo conversions Lime Bikes, Weekend activities
Posted on: June 7, 2018 - 12:07am
Fellow Residents;
There are quieter Board meetings, and then there are Board meetings where a range of important issues are covered that impacts our daily lives. Last night was one of those. We talked about the looming SALT crisis (not road salt), condo conversions, leafblower law enforcement, Lime bikes and more: in short, topics that affect just about all of us.
SALT and “non-profit donations”
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As part of the Federal tax-cut legislation last year, most Federal personal income rates went down, and certain deductions were eliminated or limited. The most impactful of these changes that hit us here in Hastings were changes to the “State and Local Tax” deduction (known by the abbreviation of “SALT”), which were capped at a total of $10,000 for a taxpayer. This will likely have an outsized negative impact next year on some taxpayers in Hastings who pay property taxes.
Governor Cuomo has proposed a mechanism by which the Village (or any taxing authority) could allow property owners to make a “charitable donation” to the village, 95% of which would be deductible against their local taxes. So, if you annually owe the village $2,000 in Villages taxes, you could make a $2,105 “charitable donation” to the village, and the Village would credit 95% of that against your $2,000 tax liability, essentially eliminating the local tax obligation. The entire point of this legerdemain is that the “charitable donation” could then be deductible from your taxes because charitable deductions are still permitted under the updated tax code.
The mechanism to implement this concept is complex and the likelihood that the IRS will disallow this application of the charitable deduction high – the Treasury Department has already warned to that effect. Furthermore, the proposed mechanism requires the Village to attest to the charitable nature of these donations and that no goods or services are given in response. We believe the result would be that the taxpayer utilizing this dodge would likely see his deduction denied, would then need to resubmit his taxes due to the Village as a proper tax payment, and then pay a penalty and interest to the IRS for the ineligible deduction. The Village, in turn, would need to refund the original payment, and potentially be placed in legal jeopardy.
The Board decided that implementing this “charitable donation” would likely result in the Village participating in an outcome that would end in interest and penalties to those residents who participate and logistical and legal risk for the Village. While this scheme could, in theory, result in “extra” revenues to the Village (since only 95% is applied against taxes due, the rest is a boost to our revenues) and possibly result in a tax savings to residents who deploy this trick, it is more likely to end in bitterness all around. We have joined most surrounding communities in choosing not to implement what we would need to do to be able to handle these sort of “charitable deductions” and the school has, as well, decided not to pursue this.
Intra-village cooperation on leaf blower laws
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We are now in that portion of the year where leaf blowers are largely not permitted in Hastings (through to October 15th). While we enforce this law, it is apparent to many observers that the enforcement has limited effect. We have met with the other Greenburgh villages and agreed that a major problem preventing enforcement is that we have taken widely disparate approaches in the various villages to the leaf blower issue. Other than (generally) agreeing that the noise generated from the gas blowers is simply too loud, our various local laws differ on just about everything else, including when these bans apply, to what sort of devices, under what circumstances, and how they are enforced. A contractor covering the villages is left trying to decipher the local village version of the law as they move from street to street. We have agreed to set up a group across the communities and try to come up with a harmonized law that, at least minimally, sets a common standard across all villages so at least it is clear what cannot be done during a set timeframe. The outcome, hopefully, are clearer guidelines, better understanding and better enforcement.
Meanwhile, we will repeat for the umpteenth time: there is no leaf blower use between May 15th and October 15th, period. Not for contractors nor residents. If you see someone using it, please call the police desk (914-478-2344) so we can address it.
Letter in support to a law limiting condo conversion
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Among the many unanticipated side-effects of the limited SALT deduction is the possibility that New York will see a spike in conversions of housing developments to condominiums, which are treated differently under State assessment and taxation rules. For historical reasons, condominiums are assessed and taxed at much lower rates than regular homes (known as “fee simple”) of similar size and finish. The concern is that the capped SALT deduction ($10,000, see above) will result in a surge of conversions, resulting in lower taxes for the new “condo” owners, but higher taxes for everyone else as the tax burden is redistributed to the fee-simple taxpayer. The Town of Greenburgh is looking to petition the State to pass a law that would prohibit these after-the-fact condo conversions to help prevent the further burdening of regular homeowners. We agreed to send a letter in support of Greenburgh’s petition. We are NOT seeking to change the law on how existing condo orders are assessed and taxed: just looking to prevent opportunistic changes to existing taxation categories.
Lime Bike Discussion
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There are a variety of bike-sharing plans out there right now. Some, like in NYC, are docked in stations. Others are “dockless”, where the user unlocks the bike (whether via an app or a keypad on the bike), use it for some period of time and then leave it at or near the destination, where it locks up again and then appear available on the phone app for the next user. One such company is LimeBike, which has kicked off operations in Yonkers and White Plains (and some 80 other cities or campuses world-wide) and whose bikes are, increasingly, being found in the area. Lime has approached Hastings, asking to add us to the its range of allowable use, and also to populate it with bikes for the public. The bikes cost a dollar for a half hour and can only be used by adults. The idea is that you check your app for the nearest Lime bike (which are, no surprise, a bright lime hue), unlock it, and go. You’re supposed to park it in a way that does not get in the way of pedestrians or cars. They’ve taken off in the cities where they have been deployed. They come at no cost to the Village, provide an exhaust-free and fun way of getting around, and are exercise to boot. The Board peppered the Lime Bike representative on Tuesday night with questions to understand the model. We can choose to become a destination for bikes based in Yonkers (already, technically, happening – you may have seen some green bikes around), or an actual source for bikes, with a number based here (perhaps 50, maybe more, maybe less) in Hastings for use by the community. This Board has never shied away from experiments and we’re considering giving this a try. We would like to hear from you. Thoughts? (board@hastingsgov.org) You can download the Lime Bike app from the App Store or Google Play to get a sense of how it works, where bikes are currently available, and even renting one.
Another busy weekend
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A reminder that the rescheduled Spring Thing is this Sunday this weekend from noon to 4PM. This is a Hastings tradition, with vendors, Fire Department cook-out, live music, bouncy castles, carnival games and more. Down the hill, the Hastings Flea will also be in session. Later in the afternoon, the Historical Society will have it’s lecture on Sunday at 3PM at the Library. You could keep busy all afternoon. Free for all.
If there are any questions or comments, please reach out…
Sincerely,
Peter Swiderski