When it comes to the Ulster County For Fair Taxes Act, which aims to levy a surtax on the county’s top earners, County Comptroller March Gallagher has some concerns. Four of them, actually.

Earlier this week, Gallagher posted on the comptroller’s office’s website her thoughts on the proposal. If enacted into law, the county would get a 16.75 percent surcharge which would apply to single filers who report more than $200,000 in state income tax and to joint filers who report more than double that. The surcharge is not on total income, only on state taxes paid on income in excess of the thresholds.

“As the county continues to adopt deficit budgets that anticipate relying on fund balance appropriations, and we face impacts from federal cuts, I applaud [County Executive Jen Metzger] and the Legislature for considering additional new revenue sources,” Gallagher wrote. “While we don’t need this revenue today, we may need additional revenues in the 2027 and 2028 budgets or else we could see property tax increases.”

Her first concern is that the surtax will be applied to people in the economic upper middle class. She wrote that she’d prefer that the “ultra-wealthy” be taxed more. “Although the financial impact might be low for people and families over the threshold, the thresholds established create a wedge between those families in Ulster County who are moderately well off and everyone else when, in my opinion, the wedge should be driven between nearly all of us and the billionaire class,” she wrote, noting that the income levels as they currently appear “do not capture just the top 1 percent of filers, but indeed the top 3.3-3.8 percent of filers.”

She also noted that as inflation increases, more people (the ones who get raises at least) will find themselves subject to the surcharge. “If inflation trends continue to drive wage growth, we believe that 2026, 2027 and 2028 could see many more filers pushed from the $100,000-$199,999 income range into the over $200,000 income range,” Gallagher wrote. “Will the income ranges included in the surcharge increase with inflation over time? The law as proposed has no mechanism to facilitate this.”

Her second concern: The UCFFTA could discourage needed professionals from moving into Ulster County. “There is a split in the literature about whether tax increases actually do cause outmigration,” she wrote. “The chosen threshold of $200,000/$400,000 may dissuade certain professionals from making residence in Ulster County. For example, we have a hard time recruiting doctors to Ulster County. This legislation will not help.”

She suggested tax reform at higher levels would be a better alternative. “Since state income tax is largely based on federal income tax, what we need to bring tax fairness is major federal income tax reform that closes loopholes exploited by the ultra-wealthy without creating a patchwork of tax laws among counties and states that could result in people moving for tax purposes,” Gallagher wrote.

In Concern Three, she writes the discussion about raising income taxes “is taking place in a vacuum.”

“We are not facing an imminent risk to the county’s finances, but we are anticipating hard times ahead,” Gallagher wrote. “I understand that it takes time to get a proposal like this fully adopted; however, since the state legislature will not take up the measure until next year, we do have time for a broader discussion. I have heard from constituents who would never pay this tax themselves yet remain concerned that the county may be considering new revenue sources before thoroughly evaluating spending and identifying potential efficiencies within the budget. There really haven’t been discussions in the budgetary context of cuts in light of the potential changes in federal funding which could increase Ulster County taxpayer responsibility for SNAP and Medicaid costs.”

The fourth concern has to do with what’s done with the money raised by the surtax, which may be as much as $20 million a year according to a county estimate.

"While I applaud the pursuit of new revenues, tying those revenues to a distinct need would protect taxpayers,” Gallagher wrote. “For example, we could consider triggering an income tax surcharge should the county’s Medicaid weekly share increase or should the state SNAP benefit error rate remain above 15 percent in 2027, which would cost Ulster County taxpayers at least an additional $6.2 million annually. During the Great Recession, Ulster County’s sales tax revenues declined 8 percent. We could consider triggering this new revenue for the following tax year contingent on a specific reduction in sales tax.”

The full report may be read by clicking here: https://comptroller.ulstercountyny.gov/ulster-county-income-tax-surcharge/