By Ken Thomas 

WASHINGTON -- Eight states led by Democratic governors launched a campaign Friday to pressure the Trump administration to reconsider a measure in the 2017 tax overhaul that high-tax states say has led to a sharp revenue decline.

New York Gov. Andrew Cuomo, joined by the governors of Connecticut, Illinois, New Jersey and Oregon, said states would lobby Congress and the administration for the repeal of the $10,000 cap on the federal deduction for state and local taxes. Also joining the effort are Hawaii, Rhode Island and Washington state. The tax break had been unlimited until the 2017 tax law. Now some taxpayers in those states can write off only a portion of what they had in the past.

"It was a terrible political injustice that was done," Mr. Cuomo said on the sidelines of the National Governors Association meeting in Washington. "It will hurt millions of people."

While a majority of residents in each state saw their federal tax liability go down, some wealthy residents of high-tax states such as New York, New Jersey and California could see higher bills this year because of the new cap.

The governors said many of the states were targeted because they are Democratic strongholds. "This is politics masquerading as tax policy," said New Jersey Gov. Phil Murphy.

New York, New Jersey, Connecticut and Maryland sued the federal government in July over the cap, asserting that the tax law unfairly targeted high-tax states governed by Democrats.

Mr. Cuomo has said the law is prompting some wealthy New Yorkers and state businesses -- who pay a disproportionate share of state income taxes -- to move to other states. This has led to a drop in revenue of more than $2 billion in New York, state officials said.

Mr. Cuomo met with President Trump at the White House last week to discuss the tax dispute after the president expressed an openness to change the tax law after hearing from fellow New Yorkers hurt by the provisions.

With Democrats in control of the House, the governors said they planned to push Congress to revisit the cap on the tax deduction. Any measure would face an obstacle in the Senate, where Sen. Chuck Grassley (R., Iowa), head of the Senate Finance Committee, has said he has no plans to reconsider it.

Michael Zona, a Republican spokesman for the Senate Finance Committee, said the panel wouldn't revisit the issue. "The SALT deduction is a federal subsidy for states to raise taxes on their residents without political consequence. The answer to the problem is for states to lower their taxes instead of insisting that taxpayers from lower-tax states subsidize their profligate spending," Mr. Zona said.

--Jimmy Vielkind contributed to this article.

Write to Ken Thomas at ken.thomas@wsj.com

(END) Dow Jones Newswires

February 22, 2019 18:50 ET (23:50 GMT)