The issue of whether to tax the wealthiest New Yorkers at a higher rate is once again a topic at the State Capitol. Assembly Democrats are out with a tax plan that would redistribute some tax revenue from the richest to the poorest New Yorkers.
The Assembly plan would make permanent a temporary tax surcharge on New Yorkers making more than a million dollars a year when it expires in 2017. Democrats would also add new, higher tax brackets for those who earn between $1 million and $5 million, between $5 and $10 million, and a rate at nearly 10 percent for those who make more than $10 million a year.
Meanwhile, middle class taxpayers would continue to see a small reduction in their taxes, implemented at the same time as the temporary tax surcharge on millionaires, and the state’s poorest workers would be eligible for a larger earned income tax credit.
Assembly Speaker Carl Heastie said his members want to see a fairer tax structure.
“For a long time this house has wanted to see a more progressive tax structure,” Heastie said.
Heastie said there also needs to be more revenue generated to fund schools.
“The amount of money for education that the governor put in his budget is not enough,” Heastie said.
Governor Andrew Cuomo has proposed raising aid to schools by just under a billion dollars this year. That falls far short of what education advocates and the State Board of Regents say is necessary. They estimate closer to $2 billion is needed.
The property tax also funds schools, but the state’s property tax cap, now in its fourth year, will result in a zero percent increase in local taxes this year. The tax cap is 2 percent or the rise in the consumer price index, whichever is less. The rate of inflation, based on a market basket of goods, is estimated to be 0.12 percent this year. That may be good news for property owners, but it squeezes schools who have costs that are rising far above the rate of inflation, says Michael Borges, with the New York State Association of School Business Officials.
“Our major expense drivers are wages, pensions, health care and special education costs,” Borges said. “Those costs are not typically represented in the CPI."
And he said poorer schools will suffer even more than wealthier ones. So-called high needs schools will be able to raise a maximum of $10 more per public, while wealthy or low needs schools can raise up to $27 per student, under the cap.
Heastie said Assembly Democrats would like a straight 2 percent per year tax cap, but he said it’s a non-starter with Cuomo and Senate Republicans.
Republicans, who control the State Senate, also are rejecting the Assembly’s income tax plan, saying they don’t support raising any taxes at all on “hardworking New Yorkers.”
Cuomo has not directly responded to the Assembly plan. The governor has spent parts of the past three weeks at the Capitol during the busy legislative session, but has made no public appearances. A spokesman, when asked for a comment, referred back to remarks that the governor made nearly a month ago, on Jan. 8, where Cuomo was noncommittal.
“I’m thinking about this year this year and then I’ll think about next year next year,” Cuomo said. “And I’ll think about the year after next year the year after next year.”
Heastie said he’s not worried by the governor’s lack of response. He said Cuomo has changed his mind on key issues before.
“Last year, the governor said it was good to dream, when we talked about the minimum wages,” Heastie said. “So let’s see what happens this year.”
Last spring, Cuomo was not a supporter of the push to raise the minimum wage to $15 an hour, and he cast doubt on its success. Since then, the governor has acted administratively to phase in the wage increase for fast food and state workers, and is pressing for a bill to enact a $15 minimum wage statewide.
