Average New York City households will pay as much as $2,300 more in taxes and fees in 2010 than last year — but brace your wallets for further impact.
With Gov. Paterson set to unveil his proposed 2010-11 budget for the cash-starved state on Tuesday, fiscal watchdogs say New Yorkers are already reeling from a spate of tax and rate hikes that add up to a serious blow.
“It’s burdensome — people feel they are paying a lot, and they’re not going to be happy about anymore,” said Carol Kellermann of the Citizens Budget Commission.
But the city faces a $4 billion deficit and the state fears a looming $3 billion gap.
“I think both the city and state will propose additional fees and penalties to raise more revenues. It’s probably a safe bet such things will happen,” Kellermann said.
The city added or raised several key taxes last year, and New Yorkers will feel the full, 12-month brunt in 2010. It hiked its general sales tax from 4 to 4.5 percent. Combined with the 4 percent state sales tax and a commuter tax, consumers now pay 8.875 percent on most purchases.
The city also restored its 4.5 percent sales tax on clothing over $110, while the state did not.
In a stealth move that got little notice, the Bloomberg administration also tacked the 4.5 sales tax onto gas and electric bills — that’s expected to enrich city coffers by $74 million. The new tax will cost a household an extra $28.50 this month alone, based on a typical Con Ed January bill — $551.28 for gas plus $80.97 for electricity, a spokeswoman said.
Homeowners will pay 7 percent more in property taxes, though landlords will likely pass on a rent hike to tenants.
The average property-tax bill for a single-family home in Manhattan, $18,600, will jump by $971 in 2010; in the other boroughs, add $184 to the average $3,500 bill, says the Independent Budget Office. Condo owners will pay $415 a year more in Manhattan and $71 in the other boroughs, an average citywide increase of $276.
It gets worse for families. The City University of New York raised full-time tuition 15 percent at its four-year colleges, from $4,000 to $4,600, starting last September, and 13.4 percent at its community colleges, from $2,500 to $3,175. Trustees have voted to hike tuition another 2 percent.
The State University of New York has raised tuition from $4,660 to $5,070 since last year.
The Legislature hiked more than 50 state taxes and fees estimated to generate $8 billion in revenues this fiscal year — from adding a 5-cent deposit on bottled water, to raising income taxes for married couples making $300,000 or more.
The lawmakers rejected Paterson’s proposed “obesity tax” on sugary drinks but raised the tax on wine about two cents a bottle and on beer about 1.5 cents a six-pack. It will charge $25 instead of $15 to reissue license plates. Drivers will also pay a $50 surcharge to renew registration, fees imposed — among subway, bus, taxi and bridge-toll hikes — to bail out the MTA.
The state also hiked taxes on utilities, health insurers and car-insurance companies — costs bound to trickle down.
“They’ll say, ‘Oh, we’re taxing business,’ but business always passes it on to the consumer,” Kellermann said.
The Tax Foundation, a fiscal watchdog based in Washington, DC, says President Obama kept his promise not to raise taxes his first year — except on cigarette smokers. The feds hiked the tax on a pack of cancer sticks from 39 cents to $1.01. Adding New York’s $2.75 and the city’s $1.50 brings the total tax on 20 smokes to $5.26.
But Obama will spur “change” when the “George Bush tax cuts” of 2001 to 2003 all expire in 2011, the foundation notes. That’s when the president is expected to carry out his plan to raise income taxes for couples with income over $250,000 and single people with income above $200,000.
Feel the squeeze
Here’s an estimate of how higher tax rates and fees in 2010 raise costs for a city family of four that earns $75,000 a year, has a kid in college, owns a Manhattan condo and a car, and includes a pack-a-day smoker:
CITY
General sales tax
* Increase: raised from 4 to 4.5%
* Added cost: $170
Tax on clothing over $110
* Increase: 4.5%
* Added cost: $26
Property tax
* Increase: 7% hike
* Added cost: $415
Gas and electric
* Increase: new 4.5%
* Added cost: $185
CUNY tuition
* Increase: 15%
* Added cost: $600
MTA
Subway and bus fares
* Increase: $8 hike on monthly pass, $2 hike on weekly pass
* Added cost: $392
Bridge tolls
* Increase: $1.86 hike on Verrazano, 91 cents to $1.01 increase on major crossings
* Added cost: $30
Taxi tax
* Increase: 50 cents
* Added cost: $234
STATE
* Increase: 3 cents a gallon on beer, 2 cents on wine, 5 cents on water bottles
* Added cost: $25
FEDERAL
Cigarette tax
* Increase: 39 cents more to $1.01 a pack
* Added cost: $219
Total hike: $2,296
Sources: Independent Budget Office, NY state Department of Taxation and Finance, Con Ed, Tax Foundation