Cuomo Warns of N.Y. Tax Hike, Cost Cuts Without $15 Billion Aid
(Bloomberg) -- New York Governor Andrew Cuomo warned of tax increases on the wealthy and cuts to schools, local government and social services unless the state gets a budget-balancing $15 billion infusion from President-elect Joe Biden’s $350 billion stimulus proposal.
Cuomo, 63, presented a state budget for fiscal 2022 on Tuesday with two scenarios: “worst case” and “fair funding.” Under the former, New York receives about $6 billion from the federal government, which he said would force him to raise revenue, cut expenses and turn to “significant borrowing.”
If New York gets the $15 billion, the budget would fund $600 million of labor agreements, restoring $900 million of tax reductions, funding a scheduled, $400 million tax cut on the middle class and providing $1.1 billion in additional state support for education, according to Cuomo. His budget also includes $2.8 billion of childcare support for families and $7.5 billion for higher education.
“I believe Washington will be fair,” Cuomo said of the Biden administration. “I believe the stars are lined up for change.”
Though he spoke optimistically, he also warned that he would sue the federal government if New York doesn’t get its “fair share.” New York has historically sent more to Washington than it has received, Cuomo said.
Should New York get $6 billion, it would have to cut spending and raise revenue to close the remaining $9 billion deficit in the budget, he said. If he agreed to a legislative proposal to raise the top income-tax rate to 10.86% from 8.82%, New York City residents would face a combined tax rate of 14.7%, the highest in the nation. That would only raise $1.5 billion, forcing “drastic cuts,” he said.
“New Yorkers deserve and demand fairness,” Cuomo said during a presentation of the annual budget for the fiscal year that begins April 1.
Cuomo is also calling on the incoming administration to repeal a $10,000 limit on state and local tax deductions, known as SALT, which was passed in 2017 and has inordinately impacted high-cost states like New York and New Jersey. In New York, 52 of 62 counties saw taxes increase under the new law, according to Cuomo. A repeal would return $12.3 billion a year to New Yorkers, he said.
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