NEW YORK NOW – The Cuomo administration said Monday that New York will not have to cut spending or raise taxes on the wealthy to cure the state’s fiscal woes because budget officials have now identified $5 billion in resources to plug the deficit.
State Budget Director Rob Mujica told reporters Monday that the newly identified funds are the result of stronger-than-anticipated revenue receipts and aid from the federal government.
“So, as of right now, we have the resources necessary so that there would be no cuts in the governor’s budget,” Mujica said. “So, you wouldn’t require any significant level of tax increases to pay for the restorations.”
That’s after Democrats who lead both the State Senate and Assembly, last week, proposed a package of tax hikes for New Yorkers earning more than $1 million each year.
Those proposals were included in each chamber’s proposal for the state budget, which is a largely ceremonial gesture to kick off final negotiations between the Legislature and the governor’s office before the spending plan is due at the end of March.
Democrats have said those tax hikes, coupled with other revenue raisers targeted at the wealthy, could generate more than $8 billion for the state each year.
That money had been intended for two purposes. The first, and most immediate, was to help cure the state’s budget deficit. Cuomo’s office had estimated the gap to be about $15 billion between this year and next, though that figure has been disputed by analysts.
But lawmakers also wanted to approve a package of revenue raisers to finance long-term investments for the state, like infrastructure needs and school funding gaps.
Assembly Speaker Carl Heastie, D-Bronx, said last week that those proposals were never intended solely to address the state’s budget deficit.
“One of the reasons why we felt like we needed to do the revenue raisers because we need to start to make investments if this state is really going to recover from this pandemic,” Heastie said.
Mike Murphy, a spokesman for Democrats in the Senate, said their position on tax hikes targeted at the wealthy hadn’t changed, regardless of the federal stimulus package and the state’s revised revenue projections.
“It is amazing that they found $5 billion just a week after our one house budget passed,” Murphy said. “Our position remains the same: we need to ensure all New Yorkers are protected and we can pass a budget that doesn’t rely on one shots and austerity but creates long term equity.”
Cuomo has historically been opposed to raising costs for New York’s wealthiest residents, fearing they could be pushed to a different state. Nearly half of the state’s income tax revenue comes from the top 1% of earners, according to state data.
Republicans have taken the same position as Cuomo, saying the rich could leave New York and take their tax revenue with them if the cost of living continues to rise.
Democrats have until the end of the month to resolve the conflict with Cuomo’s office. The budget is due April 1.