NEW YORK NOW – Assembly Speaker Carl Heastie, D-Bronx, says members of his chamber are prepared to return to Albany in the coming weeks to prevent major cuts to education, local governments, and hospitals that could be proposed by Gov. Andrew Cuomo without federal aid.
Heastie, in an interview with reporters at the state Capitol Thursday, said if Cuomo followed through on his warning to cut spending by 20%, the Assembly would “look to respond.”
“I think these cuts are unacceptable, and I think you would see the Legislature look to respond,” Heastie said. “None of us can fathom 20% cuts to education. Those are cuts that I don’t think we’ve ever imagined, we’ve ever seen, in recent times.”
“We can not tolerate those types of cuts,” he said.
It’s not that Heastie blames Cuomo for the potential cuts. He said that, like Cuomo, he would like to see the federal government help New York through the financial crisis caused by the state’s response to the coronavirus — a multibillion dollar effort.
New York has projected the state could lose more than $13 billion in revenue over the next fiscal year because of the disease. That’s on top of the billions of dollars spent by the state in its response to the crisis, which was last pegged at above $3 billion.
Freeman Klopott, a spokesman for the state Division of Budget, said the state’s fiscal situation has forced them to develop a plan that would reduce spending by more than $10 billion.
Because 90% of the state budget funds schools, health care, and local governments, there’s virtually nowhere else to cut, Klopott said. Without help from the federal government, they’re out of options, he said.
“We fully agree with the Speaker: the spending cuts we are facing have never been executed to this level in modern history which is why the Governor has been calling on the federal government to take action since the start of this crisis,” Klopott said.
“Any category where we don’t reduce spending will simply mean deeper cuts in another,” he continued.
Some lawmakers, and advocates, have called on Cuomo and the state Legislature to enact a new tax on the ultra wealthy to provide a safety net of funding. They’ve argued that the state’s financial woes — both before and after COVID-19 — could be solved with that money.
As the state Legislature returned to Albany this week to approve a package of bills related to COVID-19, a coalition of unions and advocacy groups rallied through a digital press conference for legislation that would enact a new tax structure in New York.
New York hasn’t enacted a new tax rate for the rich since 2011. That’s when Cuomo and lawmakers agreed to place an 8.82% tax rate on the highest earners, which currently qualify as single filers making more than $1.07 million, and couples making double that amount.
Tax rates are even higher in some areas of New York, where local income tax is applied. In New York City, the combined state and local tax rate for the wealthiest residents is nearly 13%.
Union leaders, and some Democrats in the state Legislature, are now seeking to raise those taxes higher. It’s not a new position; they’ve called for a new top-tier tax rate for years to provide a consistent funding stream for the state.
But the situation is different in the era of COVID-19. Instead of calling for higher taxes to create new programs, they’re trying to preserve the ones that already exist.
Cuomo, in recent weeks, has said state spending for schools, local governments, and hospitals could be cut by as much as 20% if Congress doesn’t provide billions of dollars in economic relief to New York. The state, he said, doesn’t have the money to fund its budget.
“There cannot be a national recovery if the state and local governments are not funded,” Cuomo said Wednesday. “That is a fact.”
He was given new power by the Legislature in April to cut state spending throughout the year, based on revenue, to balance the state’s budget. If the state doesn’t meet its revenue goals, Cuomo has the power to cut funding accordingly.
The Legislature, per the law, is able to prevent, or modify, those cuts through a joint resolution, meaning both the Assembly and Senate have to agree to it.
Cuomo is banking on the federal government to cure the state’s projected deficit, but so far that hasn’t happened. The U.S. House approved a bill with funding for state and local governments, but the U.S. Senate has yet to consider the legislation.
Schools, in particular, have been placed in limbo heading into the next school year, uncertain how to budget their finances moving forward.
In a worst-case scenario, where the federal government doesn’t provide any funding for New York and the state can’t boost revenue, schools would be devastated by a 20% cut, said Andy Pallotta, the president of New York State United Teachers.
“It would be a devastation that we do not have to have,” Pallotta said.
“As it’s been said, there’s a lot of money in New York state, and a lot of it stayed here while they went to the virgin islands and hamptons, and while they’re probably revving their jets right now thinking they should come back, and they should pay their fair share,” he continued.
That idea currently doesn’t have support from a majority of Democrats, who control both chambers of the state Legislature. Cuomo has also been hesitant to embrace higher taxes on wealthy New Yorkers, saying it could drive those residents out of state.
Heastie said the idea isn’t off the table in the long-term, but that he wants to see the federal government act before considering any additional revenue actions.
“I’d rather let the federal government plug the hole and then we’ll look and see what we can do next year,” Heastie said. “Even though we have a pandemic, the needs of the world and the needs of the people still have to continue.”
Senate Majority Leader Andrea Stewart-Cousins, D-Westcheser, has made similar remarks in the past, and members of the Senate have been told to plan on a return to Albany at some point this year.
“I think we’ve got to have everything … on the table, but we certainly do not want to balance our budget on the backs of the most vulnerable,” Stewart-Cousins said on WCNY’s The Capitol Pressroom. “I think everything has to be looked at.”
There are individual proposals in the Legislature, as well, that would address specific funding disparities.
State Sen. Shelley Mayer, D-Westchester, has a bill that would temporarily raise taxes on residents earning more than $5 million over the next two years. That revenue would be used, exclusively, to provide additional funding for schools and public colleges.
“Our majority leader has said that all these revenue ideas are on the table,” Mayer said. “We’re fighting for the federal money, but we need to have a plan of revenue and our conference, I believe, will have one. And I hope my bill is part of it.”
Lawmakers left Albany Thursday after approving a package of bills aimed at providing relief for residents, like assistance with rent for low-income individuals and protections from price gouging during a public health crisis.
Lawmakers who spoke to New York NOW said they wouldn’t be surprised if they were called back again this year. Session was originally scheduled to end next week.