By Ayala Ben-Yehuda
Chris Petallides may be a successful architectural engineer in the process of building a home in Little Neck, but that doesn’t mean he isn’t feeling the budget pinch with a looming income tax surcharge, water rate hikes and a five-month-old 18.5 percent property tax increase.
Petallides hopes that with some wise accounting, he can just miss falling into the bracket of income earners targeted by the city and state to pay more in taxes over the next three years as a way to close the city’s yawning budget gap.
“I was a little disappointed that the commuter tax didn’t take a bite out of that problem,” Petallides said.
In the budget passed by the state Legislature, the state income tax rate would rise from 6.85 percent to 7.5 percent for individuals earning more than $100,000 a year in taxable income, heads of household making more than $125,000 and married couples filing jointly who earn more than $150,000 after deductions.
The higher rate would be applied only to income earned above the threshold level and would decrease to 7.375 percent and then 7.25 percent in following years before returning to the current 6.85 percent.
Given that Petallides and his wife hover somewhere near the $150,000 level, he was confident that “it’s not going to impact us much, if at all.”
But for people earning more than $500,000 a year, a tax rate of 7.7 percent would apply for all three years.
“As disturbing as this tax increase is, it accomplishes what we were trying to push for here in the Assembly, trying to make (the budget) fairer,” Assemblyman Mark Weprin (D-Bayside) said.
“In my district there are those who will be affected, but the great majority of them will not be affected by that tax.”
Weprin estimated that only 5 percent of state residents would have their personal taxes boosted by the new surcharges.
In addition to the state income tax hikes, the City Council voted Monday to increase the local income tax on top earners from the current rate of 3.65 percent to 4.25 percent. Like the state surcharge, the city’s also would last for three years.
A 5.5 percent hike in water rates approved Monday added yet another increase in the cost of city living to the 18.5 percent property tax increase passed last fall.
“Water in New York City is expensive to begin with, as opposed to Nassau and Suffolk County,” said Petallides, who estimated his bill would rise by about $50 a year.
The 18.5 percent property tax hike, combined with higher assessed values on homes, has caused tax bills to skyrocket for many city homeowners.
The current Flushing resident bought property in Little Neck two years ago, tore down the existing house and is planning to build another in its place.
“I expect to pay more in taxes because it’s going to be a much larger single-family dwelling,” said Petallides, whose tax bill will be about $3,000 for each property until he moves to the Little Neck house.
The engineer seemed to take all the budget troubles in stride, perhaps in recognition of Weprin’s assessment:
“These are desperate times.”
Reach reporter Ayala Ben-Yehuda by e-mail at Timesledger@aol.com or call 718-229-0300, Ext. 146.