Concern of $ 4 Billion in Tax Hikes in New York Budget Agreement That Will Cause Exodus

Governor Andrew Cuomo and state lawmakers were prepared Monday night to impose $ 4 billion in new taxes as they tried to define the final details of New York’s overdue budget of roughly $ 200 billion.

Key issues separating the parties, which have passed the April 1 budget deadline, included a plan to legalize sports betting and the possibility of handing out benefits to illegal immigrants and ex-convicts.

But lawmakers seemed willing to hit New York’s big businesses and top-earners with a series of new taxes, despite a $ 12.6 billion cash injection from the COVID-19 stimulus measure. $ 1.9 trillion from President Biden that US Senate Majority Leader Chuck Schumer (D-NY) has. That said is enough to balance the budget.

Andrew Rein, chairman of the Citizen’s Budget Commission, called the planned tax increases “economically risky and fiscally unnecessary” given the federal bailout and higher-than-expected tax revenues during the last fiscal year.

“The simple truth is that we have $ 22 billion more than the state expected when the budget was proposed in January, $ 22 billion over the next two years,” he said.

“That is almost a billion dollars a month.”

Rein also said the tax plan made a mockery of the state’s official Latin motto, “Excelsior.”

“I see this as a budget worthy of our state motto … which means ‘up’ in both spending and taxes,” he said.

Democratic mayoral candidate Ray McGuire, a former Citigroup executive, also warned Monday: “What the state is considering will push higher-income businesses and families out of town, costing us tax revenue and jobs.” .

“If we were to raise taxes to balance the budget, I would agree that people like me who have done well should pay more to help our city,” he said.

“But thanks to the billions in aid from the federal government, we don’t need to raise taxes.”

Another Democratic mayoral candidate, current frontrunner Andrew Yang, warned that higher taxes could lead people to “vote with their feet and head for Florida.”

The budget proposal would impose a new “millionaires tax” that raises the combined state and local rate for wealthy residents of the Big Apple between 13.5% and 14.8%, beating California to create the rate of highest income tax in the country.

People earning more than $ 1 million and couples earning more than $ 2 million would see their rates rise from 8.82 to 9.65 percent until at least 2024.

Two new tax brackets would also be created, one taxing income beyond $ 5 million at 10.3 percent and another in which income greater than $ 25 million is taxed at 10.9 percent.

Another measure would increase the state tax on corporate franchises from 6.5 percent to 7.25 percent through 2023.

“The Legislature is about to pass the largest spending budget in New York history, funded by substantial business tax increases and the relatively small number of households that already generate the most income from income taxes. from the state, “said Kathryn Wiley, CEO of the New York City Partnership, the lobbyist for the Big Apple’s major corporations.

“The best that can be said is that it could have been worse, but this is a small consolation to affected taxpayers. There is no question that spending on those who have suffered the greatest losses during the pandemic is a worthy goal, but it remains to be seen whether the revenues will materialize as taxpayers reflect on their location options. ”

During a conference call with reporters, Cuomo said a bill to allow legal online sports betting in New York would be part of the budget and could open the floodgates to billions of dollars in gambling that is projected to eventually generate $ 500 million in annual revenue for the state.

“We have a conceptual agreement on all the issues,” he said.

The main stumbling block involves who would handle the action, with the governor favoring a single app-based betting operation and the Legislature favoring several.

The Legislature also wants to allow sports betting on Native American reservations and in the “racinos” of the state.

Lawmakers overseeing gambling legislation opposed Cuomo’s top-down approach to mobile sports betting, but said they may not be able to stop it.

“This is the first time I have heard that the Cuomo model [for mobile sports betting] it’s a done deal, ”said Assembly Racing and Gambling Committee Chairman Gary Pretlow (D-Mount Vernon).

“I don’t like your model very much.”

Another vexing issue has been the creation of an “excluded workers fund” to provide unemployment insurance and other benefits to illegal immigrants and parolees.

The $ 2.1 billion proposal has strong support among progressive New York City lawmakers, but more moderate Upstate Democrats have raised objections and called out the idea of ​​rewarding people who don’t pay taxes on the Rent as a “gift” to the Republicans who will beat them during the next election of the year.

“The excluded workers fund is what moved people,” said a Democrat close to the budget talks. “They are trying to clean it up.”

The spending plan has sparked vigorous debate among Democrats who control both the Assembly and the Senate.

“There has been a discussion about it. I’ll leave it at that, ”said Assemblyman Michael Benedetto (D-Bronx), who supports the workers’ fund.

Other spending plans likely to be included in the budget include a $ 1.4 billion increase in aid for needy school districts, funding for pre-kindergarten programs across the state, and a tuition assistance program for SUNY and CUNY students.

A deal on $ 2.3 billion in rent relief is also expected for tenants affected by the COVID-19 crisis, thanks to Albany getting $ 2 billion in federal funding. Sources say additional state aid could be added, but a final amount has not been released.

Cuomo said this year’s budget process has been “complicated” by the COVID-19 pandemic, which has prevented officials from meeting in conference rooms at the state Capitol to discuss their differences.


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