Crucial budget issues remain
Cuomo, Legislature hash out tax hikes on wealthy, but other discussions still continue
The Executive Chamber and the state Legislature resolved the thorny issue of tax hikes on the wealthy in their quest to pass next year’s state budget, but discussions over a $2 billion fund for “excluded workers” continue and are mucking up negotiations.
The deal on the tax raises was first reported by The Wall Street Journal, then confirmed to the Times Union by a source familiar with the discussions.
Legislators were briefed Saturday on the deal, which raises personal income taxes for those with more than a million dollars in annual income to 9.65 percent, a hike of 0.83 percentage points, the Journal and The Buffalo News reported. The deal would also create two new tax brackets for those making more than $5 million and more than $25 million. Income from $5 million to $25 million would be taxed at
10.3 percent, and above $25 million would be taxed at 10.9 percent. These rate changes are expected to raise more than $4 billion in annual revenue for the state.
The top-line total for the budget is not yet final, but the proposed budgets from the Assembly and Senate were more than $200 billion — the largest in New York history.
Gov. Andrew M. Cuomo has always resisted during his decade in office spending increases of more than 2 percent per year and tax hikes. This year he asked for a small tax increase, but ceded to the Legislature’s requests for a larger one. Cuomo is currently the subject of an impeachment inquiry by the state Assembly, and more than half of all elected lawmakers in the two legislative chambers have called for his resignation for allegations of sexual harassment and of having covered up nursing home COVID-19 deaths.
The issue of tax hikes on the wealthy has been among the most contentious between the Legislature and the governor for some time. The Legislature had been prepared late last year to call a special session to pass the tax hikes on the wealthy, but held off when Cuomo opposed the raises at that time. There was also chatter when the Democrats took a supermajority in the state Senate that they could overrule Cuomo’s opposition to the proposal. The agreement between the sides on the issue represents significant progress in the budget negotiations.
But the budget is already late, as last year’s budget wrapped up by April 1. The first batch of state workers will begin going without paychecks if next year’s full budget is not passed by the end of the business day Tuesday, the comptroller’s office said.
“I have a gut feeling unfortunately that people are going to go without pay,” the legislative source told the Times Union.
The person said the Legislature is expected to vote on budget bills Tuesday, but two significant portions of the budget — education-labor and revenue — remain to be decided on. Issues still on the table include mobile sports betting — the Senate sponsor of the sports betting bill told the Times Union an update is expected Monday on the talks — and the “excluded workers” fund to send cash payments to undocumented immigrants who have not received federal unemployment benefits or stimulus checks throughout the COVID-19 pandemic.
“It’s really turned out to be a New York City against the state thing,” although not all New York City people are on board, the source said. The person added that the fund is “by far” the biggest issue still on the table, and it’s unclear where Cuomo stands on it as of now.