The $ 1.9 trillion COVID-19 aid package passed by the U.S. Senate nullifies the projected New York State budget deficit – potentially negating the need for hefty tax increases or austerity, says Senate Leader’s office Chuck Schumer Monday.
“OK. Thanks to @SenSchumer, NYS’s budget deficit for this year is… .. Zero, nada, niete, zilch (NY terms),” Schumer spokeshusband Angelo Roefaro tweeted.
The US bailout provides the treasury with $ 12.6 billion in unlimited aid, a measure advocated by Schumer, the senior New York senator. The measure passed the Senate by 50-49 votes and is expected to clear the Democrat-led House of Representatives on Tuesday and hand it over to President Biden for approval.
When asked whether the geyser of pandemic relief eliminates the need for tax increases or cuts, Roefaro told The Post, “the statement speaks for itself.”
Roefaro continued, “How NY decides its fiscal policy is a matter for the state legislature and the administration. Our job was to provide resources to help NY overcome and overcome Covid and its consequences, including the tax consequences. And we did that completely and completely. “
Faced with a multi-billion dollar budget deficit and a troubled left flank in the state legislature calling for massive tax increases for the wealthy, Cuomo proposed raising income taxes for the wealthiest New Yorkers to a top rate of 10.86%, a increase of 8.82%. Residents of New York City pay a top combined state and local income tax rate of 14.7%, the highest rate in the country.
But a budget analyst said there is no need for a tax increase at all now as the geyser of federal stimulus funding flows from Washington to New York.
“There is no need for a tax increase,” said EJ McMahon of the Empire Center for Public Policy, who has long argued that Cuomo exaggerated New York’s tax woes.
He said the income tax on the wealthy that Cuomo is proposing as part of his executive budget plan is “no longer necessary.”
McMahon said the federal aid is so great that it is enough to avoid major tax increases for the next two fiscal years.
When asked about the allegation made by Schumer’s office, Freeman Klopott, spokesman for Cuomo, referred to the governor’s comments on Sunday when he said tax increases are still on the table despite the influx of funeral fees.
It’s on the table… It’s the difference between $ 12.5 and $ 15 [billion]And don’t get me wrong, the $ 12.5 billion is very, very helpful. But as you know, since I’ve said it 150 times, I think we needed $ 15 billion, ”said Cuomo.
“So we have a gap there and there are tax increases on the table. And they are on the table before the People’s Assembly and the Senate, I do not speak on their behalf, they can speak for themselves, but yes, they are on the table, because you have to repair damage. “
Cuomo expressed concern about what will happen if the one-off infusion of federal money wears off. Spending has soared during the pandemic, despite an economic recession triggered by security lockouts, a drop in tax revenues and massive layoffs.
McMahon said Cuomo is rightly concerned about what will happen after the next budget cycle or two. The state governor and lawmakers must prepare a new budget by April 1.
But McMahon is also concerned that Cuomo – battered and weakened by multiple allegations of sexual harassment and nursing home scandals – may be more in line with lawmakers’ tax and spending wishes than he has in the past. Prominent Democrats – including Senate Leader Andrea Stewart Cousins (D-Yonkers) – are calling for him to step down.
The question is whether he will try to buy friends. People on the left would like to throw him off, ”McMahon said.