The Ulster County Fair Taxes Act

The Problem: A Tax System Stuck in 2012

Ulster County's property tax levy has remained frozen at approximately $74 million since 2012 — even as the costs of running county government have risen more than 30%. Meanwhile, 41% of renters and homeowners spend more than half their income on housing, and roughly one in three working households cannot afford basic necessities.

The current tax system relies primarily on property taxes and sales taxes — both of which are regressive, meaning they hit lower-income residents harder as a share of income. A household earning $40,000 pays the same property tax as one earning $400,000 for the same home. That's not fair, and it's not sustainable.

The Federal Cost Shift

The situation is about to get worse. H.R. 1 (the “One Big Beautiful Bill Act”) and the Trump administration's FY2026 budget are transferring an estimated $1 trillion in costs to state and local governments over 10 years. According to the National Association of Counties (NACo), the impacts include:

• SNAP administration: Federal cost-sharing drops from 50/50 to 25/75 beginning FY2027. New York counties face $266 million in added annual costs.
• Medicaid: Removal of the 5% FMAP incentive and other changes shift hundreds of millions more to states and counties. Medicaid already covers more than 26% of Ulster County residents.
• FEMA BRIC cancelled: $750M–$1B annually for local hazard mitigation eliminated.

Ulster County cannot wait. It needs new, fair revenue sources now.

Read NACo's full “Big Shift” analysis ↗

The Solution: A Progressive Income Surcharge

The Fair Taxes Act authorizes Ulster County to enact a surcharge on high-earning residents — structured as a percentage of the New York State income tax owed on taxable income above a threshold. Critically:

• Only taxable income above $250,000 (single) or $500,000 (joint) is affected — not gross wages or salary. Many filers whose salary is above the threshold will owe nothing after deductions. Under these amended thresholds, only about the top 1% of county tax filers would pay anything.
• The surcharge is 18.75% of the NYS income tax owed on taxable income above the threshold. For most affected filers, this equals roughly 0.1% to 1% of total income — rising toward 2% only for those with tens of millions in income. See the Income Tables for exact amounts by income level.
• Business income taxed at the entity level is carved out. Income of partnerships and S corporations that elect New York's pass-through entity tax (PTET) is excluded, so local business owners who report business income on their personal returns are not caught by the surcharge.
• The NYS Department of Taxation and Finance collects it automatically through existing withholding and filing systems. No new county bureaucracy is needed.
• Revenue is estimated at $9–15 million per year — allowing Ulster County to reduce its dependence on regressive property and sales taxes that burden working families regardless of income.
• Non-residents are explicitly excluded. Part-time residents pay on a prorated basis reflecting the portion of the year they reside in Ulster County.

What the Surcharge Is Not

The surcharge does not change or reduce anyone's New York State income tax obligation. It is an additional local tax administered by the state for Ulster County's benefit. It is also entirely separate from New York City's income tax.

A Note on “Millionaire Flight”

Critics have warned that wealthy residents might relocate to avoid the surcharge. The evidence does not support this concern. Assemblymember Sarahana Shrestha has noted:

“It is a myth that because of New York's tax reforms, millionaires have left. They have actually increased in number.”

The research supports this. A landmark peer-reviewed study by Cristobal Young, Charles Varner, and colleagues — published in the American Sociological Review (2016) — found that millionaire tax increases produce very little migration, and that elite taxpayers are far less mobile than commonly assumed. New York's own experience bears this out.

Legislative Status

S.10532 and A.11460 were introduced on May 19, 2026 and announced publicly on May 22, 2026. The 2026 New York State legislative session ended without the bills coming to a vote. They must be re-introduced in the 2027 session.

In the meantime, the Ulster County Legislature is formally considering the proposal in 2026 — using the current bill numbers as the basis — to demonstrate broad local support and build consensus ahead of the 2027 state session.

Once the state authorizes the surcharge, the Ulster County Legislature — which holds a 19–4 Democratic supermajority — would adopt a conforming local law following required public hearings. The earliest it could take effect is January 1 of the year following state enactment.