Gov. Andrew Cuomo again threw cold water on the idea of raising taxes on the wealthy in New York as a way to close the state’s $15 billion deficit Wednesday, saying he has renewed hope of help from Congress after Democrats were projected to take control of Congress.
“It’s a very good development for the state of New York,” Cuomo said.
But Democrats in the state Legislature took the opposite position, encouraging their colleagues to support measures that would raise revenue from the richest New Yorkers.
Among them was Senate Majority Leader Andrea Stewart-Cousins, D-Westchester, who said in her opening remarks of this year’s legislative session Wednesday that the state’s wealthiest earners should help shoulder the state’s budget gap.
“We need to get serious about making sure that everyone shares the burden,” Stewart-Cousins said. “We need to ask more of the millionaires and billionaires who have gotten even richer during this pandemic.”
Both Stewart-Cousins and Assembly Speaker Carl Heastie, D-Bronx, have said in recent months that Democrats in either chamber would back higher taxes on the wealthy. So far, no proposal has been seriously considered by either chamber.
That could change in the coming months as Cuomo and Democrats in the Legislature begin negotiations on the state budget, which is due at the end of March.
New York is currently facing a budget deficit of about $15 billion due to lost tax revenue and the state’s response to the coronavirus pandemic. Without a way to fill that budget gap, the state will likely be forced to make a series of spending cuts across the board.
Cuomo, for his part, has said he wants to wait for President-Elect Joe Biden to take office later this month before deciding how to move forward with the state’s budget crisis.
He’s hoping Biden can negotiate a new stimulus package with Congress that would provide a significant infusion of aid to state and local governments. That way, the state will know how much it needs to raise revenue through new taxes, if at all.
And with Democrats projected to win two crucial seats in the U.S. Senate out of Georgia this week, Cuomo expressed renewed hope Wednesday that the federal government will come through with a relief package.
Plus, Cuomo doesn’t see tax hikes as a quick fix for the deficit. He argued Wednesday that, even if New York raised income taxes on the rich to match the current highest rate in the country — in California — it still wouldn’t be enough to fix the state’s finances.
“If you raise the income tax rate in the state to the highest rate in the nation ... and you taxed billionaires, multimillionaires, any income over $1 million ... it only raises about $1.5, $1.6 billion," Cuomo said.
Some Democrats have questioned Cuomo’s math on that statement, saying a combination of proposals has the potential to eliminate the state’s deficit and more. They’ve introduced several ideas to raise revenue from the wealthiest New Yorkers.
Sen. Jessica Ramos, D-Queens, is sponsoring a bill that would create a mark-to-market tax, for example. That would essentially place a tax on certain assets that generate value over time. Ramos’s bill would only apply to billionaires.
“We have more billionaires than any other place on the planet,” Ramos said. “We have to get these 120 individuals to pay their fair share in taxes.”
There are other proposals to raise revenue from the richest New Yorkers as well. Aside from higher tax rates, Democrats also have proposals to raise revenue from stock transactions, second homes, and more.
Those ideas, if seriously considered, would likely end up as part of the state budget. Lawmakers are expected to begin negotiations with Cuomo on the spending plan in the coming weeks.