State and Local Tax Deduction (SALT) Cap Will Hurt California Cities and Taxpayers

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Eva Spiegel, (916) 658-8228; Cell: (530) 400-9068
 
Dec. 15, 2017

FOR IMMEDIATE RELEASE
 

State and Local Tax Deduction (SALT) Cap Will Hurt California Cities and Taxpayers


Sacramento In response to the House and Senate conference report released today that will cap the state and local federal tax deduction to a combined $10,000 for property, income and sales taxes, the League of California Cities® released the following statement: 
                                                                                                                                                         
This agreement leaves millions of hardworking California middle class families paying more in taxes, adds to the housing affordability crisis in the state by cutting back on a key incentive for homeownership, and jeopardizes resources available to cities to deliver core services to their residents. 
 
In 2015, 6.1 million California taxpayers claimed the SALT deduction with the average deduction at around $18,000. Nationwide, of the 43 million Americans who claim the deduction, 87 percent have a gross adjusted income of under $200,000.

“California cities appreciate that the agreement preserves the tax-exempt status of Private Activity Bonds (PABs), which are an important tool local governments use to finance major public projects including transportation and water infrastructure, affordable housing construction and schools, said League Executive Director Carolyn Coleman.
 
“However, California still stands to lose under the tax package leaving our taxpayers and cities with fewer resources in 2018. By limiting SALT, taxpayers will be faced with double taxation on hard earned incomes and cities may be forced to reduce services due to cut backs in resources. With many California cities and residents yet to fully recover from the Great Recession, we’re disappointed that the conferees did not preserve the full SALT deduction.”  

Established in 1898, the League of California Cities is a nonprofit statewide association that advocates for cities with the state and federal governments and provides education and training services to elected and appointed city officials.
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