Give us our $15B
Cuomo warns feds he’ll sue if COVID aid to state falls short
ALBANY — Gov. Cuomo presented “best” and “worst” case budget scenarios Tuesday before vowing to sue the federal government should Washington fail to deliver $15 billion in COVID aid.
The governor’s annual budget address turned into an airing of grievances as Cuomo unleashed a verbal assault on the outgoing Trump administration and called on newly empowered D.C. Democrats to help New York balance its books — or he’ll see them in court.
“If Washington doesn’t provide New York State with our $15 billion fair share, we will pursue litigation,” Cuomo vowed during the remote presentation in Albany.
The governor said the Trump administration is solely to blame for the Empire State’s current economic woes as he called for a repeal of a cap on deductibility of state and local taxes, or SALT, and repeated his accusation that the feds are the reason for the state becoming the epicenter of the coronavirus outbreak last spring.
“New York paid a bill for COVID that no state in the nation paid for, and it’s not even close,” he said. “The legal crisis is legally and ethically Washington’s liability. President Trump is gone. But the damage to New York remains. The COVID assault on New York State in the spring was due to federal negligence.”
Cuomo laid out two scenarios for his executive budget, either $15 billion flows from Washington and all is well — or the state receives only $6 billion and is forced to implement spending reductions, increase taxes and borrow to cover costs.
Should the state get the lower amount, New York would be forced to implement “drastic cuts,” including $2 billion from schools, $600 million from Medicaid and $900 million in other reductions to services statewide, Cuomo said.
“It would hurt New York dramatically, and it would delay recovery,” he said.
Additionally, the state would have to increase income taxes on top earners to 10.82% from a current rate of 8.82%, he said. For the wealthiest residents in New York City, that would mean a combined state and local income tax rate of 14.7%, the highest in the country.
On the other hand, $15 billion of “fair funding” would avoid any cuts and help pay for budget proposals including a $130 million pandemic recovery program that covers $50 million for restaurants in the five boroughs.
While the governor again noted his support for revenue-raising moves such as legalizing adult-use marijuana and mobile sports betting, he shot down the idea of raising taxes on the state’s wealthiest residents unless Washington drops the ball.
Progressive lawmakers and advocates have battled Cuomo over the idea in recent months, and the fight is likely to ramp up as legislative leaders craft their own spending proposals and the budget deadline of April 1 approaches.
Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) said the state can’t rule out raising taxes on the rich as part of the economic recovery from the COVID crisis.
“We have a responsibility to ensure our recovery and that this recovery is not balanced on the backs of the hard-hit New Yorkers,” she said. “The wealthy have gotten wealthier during this crisis even as the middle class has shrunk and millions of New Yorkers have struggled to make ends meet.
“We must be ready to act as a state to advance efforts to raise revenues, including having the hyper-wealthy share this burden,” she added.
Rebecca Bailin, campaign manager with the Invest in Our New York Coalition, a group calling for the passage of a slate of bills proponents argue will raise more than $50 billion by closing loopholes and taxing the wealthy, panned Cuomo’s proposals.
“Cuomo would rather pretend to play a waiting game with Washington while advocating for regressive taxes than simply end tax breaks on the wealthiest New Yorkers,” Bailin said.
State budget director Robert Mujica offered some good news to municipalities and service providers that have endured 10 months of the state “withholding” 20% of payments as he announced that already approved federal funds will reduce the across-the-board cuts to just 5% for the time being.
Mujica also clarified Cuomo’s math as some critics have contended that the state’s budget hole is smaller than the $15 billion frequently cited by the governor. The $15 billion is a combination of the deficit from the current fiscal year budget, which is $5 billion, and a projected $10 billion gap for next year.
He also confusingly said that the legal action threatened by the governor would focus on the $10,000 SALT cap.
“The lawsuit is related to the impact of SALT on the state and whether or not the reduction, or the taking away of SALT from just a few states was proper,” Mujica said.
A federal judge dismissed a SALT lawsuit filed by New York and three other states back in 2019, a decision which is being appealed.
A Cuomo spokesman later said that both Cuomo and Mujica were talking about the appeal, saying it would be dropped if Democrats in Washington overturn the provision.