N.Y. BUDGET FIX: RENT AID & GAMBLING
$212B plan socks big biz and allows mobile sport gambling
ALBANY — Gov. Cuomo and lawmakers reached a deal Tuesday to approve a $212 billion state budget that will include new taxes on the wealthy, provide COVID relief for renters and businesses, legalize mobile sports betting and create a fund for “excluded workers.”
Details of the already days-late budget emerged as lawmakers debated and began voting on parts of the massive postpandemic spending plan, a process that could easily stretch into Wednesday as several of the key bills were being sorted out.
Assembly Speaker Carl Heastie (D-Bronx) said the final outcome will be a win for all New Yorkers, especially those struggling in the wake of the COVID crisis.
“Budgets are a statement of values, and in my two decades of service to the people of New York I can’t think of a more far-reaching and impactful budget than this,” he said.
The rush to get the 10 budget bills passed, and avoid late paychecks for state workers, meant the governor would have to sign off on so-called “messages of necessity,” allowing lawmakers to vote on the measures without waiting for them to “age” three days as is customary.
“It was our understanding that all of the budget bills have been agreed upon ... we are perhaps still in some level of process, but we’ll be ready to go on the floor,” Sen. Liz Krueger (D-Manhattan), the chairwoman of the Senate Finance Committee, said as the marathon voting session began.
“We will clearly need messages of necessity, and we are hoping to get out of here today completing all of those,” Krueger added.
Several contentious issues stalled negotiations in recent days as Cuomo and his fellow Democrats, who control both chambers, remained at odds over funds for undocumented immigrants and long-sought increases in taxes on the state’s richest residents.
The budget process, meant to be completed before an April 1 deadline, was also complicated by $12.6 billion in federal COVID relief funds and a number of scandals swirling around the Cuomo administration.
Many of the governor’s fellow Dems have called for him to resign in the wake of sexual harassment allegations made by several women, including current and former staffers.
“New York was ambushed early and hit hardest by COVID, devastating our economy and requiring urgent and unprecedented emergency spending to manage the pandemic,” Cuomo said in a statement released Tuesday afternoon. “Thanks to the state’s strong fiscal management and relentless pursuit to secure the federal support that the pandemic demanded, we not only balanced our budget, we are also making historic investments to reimagine, rebuild and renew New York in the aftermath of the worst health and economic crisis in a century.”
While both the Senate and Assembly initially proposed nearly $7 billion in new taxes on the wealthy to aid recovery, the budget will include roughly $4.3 billion in levies on top earners and corporations.
New Yorkers making more than $1 million a year, or couples earning over $2 million annually, will see their taxes increase by nearly a percentage point. Two new tax brackets will also be added for those making over $5 million and $25 million a year.
‘New York was ambushed early and hit hardest by COVID, devastating our economy and requiring urgent and unprecedented emergency spending to manage the pandemic.’ GOV. CUOMO
The move, which critics fear will send the rich fleeing to other states, will mean top earners in New York City will be paying the highest taxes in the nation.
“The tax increases simply are unnecessary and economically risky,” said Andrew Rein, the president of the fiscal watchdog group Citizens Budget Commission. “Additionally, the tax increases both provide incentive for highly taxed New Yorkers to leave or not return to the state, and increase the cost of doing business here.”
Krueger argued during a floor debate earlier in the day that the increases will affect only a small percentage of taxpayers.
“This is not a tax increase on the vast, vast majority of New Yorkers,” she said. “It’s a relatively small, approximately 50,000 taxpayers who are on the wealthiest end of the scale, even during a pandemic and economic meltdown.”
Also included in the budget plan is $29.5 billion in aid to schools, a $3 billion increase over last year, and $2.4 billion for child care. Pandemic recovery measures include $40 million in grants to help the nonprofit arts sector in the state recover as well as a $35 million “Restaurant Return-to-Work Tax Credit.”
“New York State approached this year’s budget with many challenges and the ongoing COVID-19 pandemic,” Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) said. “However, driven by a commitment to long-term equity and prosperity for all, we have accomplished a great deal.”
A $2.1 billion fund for excluded workers, covering undocumented immigrants who were ineligible for unemployment and other state and federal benefits throughout the pandemic, led to in-party disputes among Dems in recent days. It was ultimately agreed upon after heated closed-door deliberations in both chambers.
The spending plan will also feature $2.4 billion in COVID-related rental assistance, which will cover payments for 12 months of back rent and utilities. A $105 million boost expanding prekindergarten and a new property tax credit for households earning less than $250,000 annually, which will max out at $350, as well as a three-year freeze on public university tuition, were also included.
Several policy changes were expected in the final measures, such as nursing home reforms requiring owners and operators spend 70% of revenue on quality care for residents, including 40% on staffing, as well as legislation requiring service providers to offer an affordable $15 per month highspeed internet plan to qualifying low-income households.
An eleventh-hour deal was also stuck to authorize mobile sports betting, a potential $500 million annual revenue stream. The program will closely mirror Cuomo’s proposal requiring operators to bid for a chance to offer mobile sports betting in the state. Lawmakers had sought a different system allowing casinos to host the operations and pay a fee to the state.
The measure authorizes the Gaming Commission to issue a request for applications to at least two interested platforms, and a minimum of four operators to solicit bids for licenses to conduct mobile sports wagering in the state. According to officials, the open process will “maximize revenue while ensuring that the state selects the most qualified and capable providers to deliver world-class wagering platforms.”