New York Daily News
Swelling budget books
New York State lawmakers are passing a whopping $212 billion budget. Cross your fingers hard and hope the wealthy people taxed at tops-in-the-nation rates to foot the bill don’t head south, turning lots of the spending into unsustainable future obligations. The budget, which imposes new rules on nursing homes, helps renters, ups school aid, creates a $2.1 billion fund for undocumented workers ineligible for federal COVID relief, and probably more, due to surface as watchdogs look in every nook and cranny, pays for it with new revenue streams from mobile sports betting — a tax on the poor — and $4.3 billion from higher income tax rates on millionaires and elevated corporate franchise taxes.
That hike is silly overkill, much more than needed to cover state expenses. Proponents argue the increases will support education aid costs in future years when federal aid runs dry. They say too that the roughly 50,000 millionaires impacted won’t feel much pain and won’t leave. The millionaires might not leave — economic evidence on tax flight is mixed — but it’s foolish to outright dare them not to for no great reason at a time when the state’s economic future is so tenuous.
But millionaires are only one piece of the puzzle. Middle-income New Yorkers burdened by high taxes (which they can’t deduct against their federal liability) aren’t just departing in significant numbers for less onerous taxes when they head to Florida, Arizona, Tennessee or North Carolina. In those states, housing costs are drastically lower; child care and food and insurance are cheaper. A family of four in Austin will pay $20,000 less per year on average in not just taxes, but also housing expenses and costs for food and household necessities than they would if they lived in Albany.
Four out of every five dollars of New York’s income taxes are being paid by people earning more than $100,000 annually. We can’t afford for them to leave. Pray they stay.