DON’T FRET, RICH PEOPLE
Yes, spending plan will cost you, but it’ll be all better once the feds rejigger taxes to allow more deductions: Andy
ALBANY — Gov. Cuomo donned rose-colored glasses Wednesday as he tried to assure the state’s most affluent residents that tax hikes included in New York’s $212 billion budget will lead to a “net reduction.”
The governor’s math relies on Washington restoring deductions for state and local taxes, known as “SALT,” which Cuomo has been pushing with little success for nearly four years.
“When you talk about this tax package you cannot talk about it without anticipating a SALT repeal,” he said during a budget briefing. “When SALT is repealed, the taxes will be going down.”
Cuomo and other Democratic governors have called on President Biden to make the change and once again allow taxpayers to deduct all of their state, local and property taxes from their federal returns.
Progressive lawmakers, meanwhile, celebrated the increased levies on the wealthy, which include raising income tax rates for single filers reporting over $1 million a year, and joint filers making more than $2 million annually, to 9.65% from 8.82%.
The budget, being voted on in the Assembly Wednesday after passing the Senate overnight, also create two new tax brackets for those making $5 million or more and anyone earning above $25 million a year. However, the changes are temporary, as the new rates expire in 2027.
Among other changes, the spending plan also raises the corporate franchise tax rate to 7.25% from 6.5% for three years.
Business groups and some fiscal watchdogs panned the plans.
“The final budget agreement contains a significant increase in the cost of state government, and — given a substantial influx of federal funding — an unnecessary multibillion-dollar tax increase, including an increase in business taxes,” said Heather Briccetti, president and CEO of the Business Council of New York State.
Cuomo noted that changes to the capital gains and estate taxes were struck down.
“The feeling was that those taxes would do damage to the state and actually cost the state more money than we would raise,” he said.
The governor spent over an hour going over the highlights of the budget, which includes a host of progressive plans to ramp up the state’s economic recovery from the COVID pandemic.
“A budget really isn’t a budget. It’s not just about the numbers,” he
said. “It’s an action plan for the future, and this one is a three-year COVID management, recovery and renewal plan.”
The budget, aided by a $12.6 billion infusion of federal COVID relief funds, includes record spending for education and $2.4 billion in rent relief for tenants who’ve lost work or income due to the pandemic. Another $2 billion in aid was approved for undocumented immigrants who did not qualify for federal stimulus checks or unemployment during the crisis.
Cuomo touted the fact that the plan restores $600 million in pay raises for state workers that were delayed last year as the pandemic took hold and will legalize mobile sports betting.
The governor expressed some reservations about the funds for “excluded workers,” saying he’s wary of fraud.
Advocates and left-leaning lawmakers held their own celebratory press conference outside the state Capitol, championing the tax hikes and spending, including $29.5 billion in school aid.
Sen. Michael Gianaris (D-Queens) said that the Democratic-led Legislature has not given up on plans to impose a higher capital gains tax or an inheritance tax on large estates.
“We’ve only just begun,” he said. “So strap in and get ready because we have a lot more work to do.”
Earlier, after the Senate completed voting on the 10 late budget bills, Majority Leader Andrea Stewart-Cousins (D-Yonkers) addressed the chamber and defended the massive spending plan.
“These historic investments are not only vital to our current recovery, but they are also the foundation for shared prosperity and broad opportunity,” she said. “Which is why we are not just plugging today’s deficits and leaving the problems of the future for another time.
Instead, we are asking those who have done the best during this pandemic to give a little more so that we can truly rebuild our state in a sustainable way,” she added.
‘Cuomo and the state Legislature must do more to end homelessness and address the longterm rent crisis.’ HOUSING JUSTICE FOR ALL