$212 BILLION DEAL
Budget includes increase is school aid, tax hike for state’s wealthiest residents
ALBANY, N.Y. » New York will boost spending by billions of dollars over the next year, and hit the highest earners with a steep income tax hike, in a bid to revitalize the state’s hard-hit economy, according to a budget deal announced Tuesday by lawmakers and Gov. Andrew Cuomo.
Cuomo and legislative leaders said the agreed-upon $212 billion state budget for 2021-22 would include a “record” $29.5
billion in school aid, a $3 billion increase from last year, as well as funding for “green economy investments,” rent relief, child care, small business recovery and broadband internet access.
The state’s annual budget deadline is April 1. This year’s tardiness means at least 39,000 state workers are facing the prospect of getting their paychecks late.
Lawmakers hoped to pass the budget by midnight Tuesday, but the Senate and Assembly seemed likely to work past that hour.
The Legislature and governor released few specifics to the public about some of the most contentious parts of the budget: the expected tax hike on millionaires, specifics of an
agreement to legalize mobile sports betting, and eligibility requirements for a $2.1 billion fund for undocumented immigrants and other workers who have been excluded from COVID-19 assistance.
But Senate Majority Leader Andrea Stewart-Cousins said in a statement that “working and middle-class taxpayers will receive the relief they desperately need, while the wealthiest New Yorkers will help their neighbors.”
The tax hike on the wealthy would be a win for lawmakers on Democratic Party’s left wing, who say millionaires in Manhattan penthouses have fared far better amid the pandemic then struggling small businesses and low-income New Yorkers.
States including California, Minnesota and Washington also are considering so-called “wealth taxes,” raising taxes on capital gains or setting new top income tax rates.
Democrats in New York hope the tax increase will bring in at least $2.8 billion this upcoming year and prevent the need for spending cuts in years to come.
The $212 billion budget is 9.9% larger than the state’s 2020-21 spending plan of $194.6 billion. That increase is due in part to extra federal COVID-19 relief that New York won’t get again next year, including an expected $12 billion for the state government alone.
Freeman Klopott, a Cuomo budget office spokesperson, said state spending alone would increase 3.8% under the budget if that extra federal funding is excluded.
New York’s tax revenues are rebounding faster than expected, Congress has sent billions to New York over the past year, and Cuomo has reduced state spending by at least $1.7 billion since last spring. That’s all helped New York balance its budget. But Cuomo and Democrats want to give a jumpstart to an economy still hit by job losses from the COVID-19 pandemic. Employment in New York is still more than 1 million jobs below pre-pandemic levels, with fewer than half of lost jobs recovered so far, according to state Comptroller Thomas DiNapoli.