With New York facing a record-setting $15 billion deficit amid the COVID-19 pandemic, Gov. Andrew Cuomo’s budget proposal includes a potential tax hike for the state’s wealthiest residents.
In his budget proposal this week, Cuomo proposed raising taxes on the rich to a combined level of 14.7 percent, which would be the highest state and local tax rate in the nation as New York looks to dig out of the financial hole created during the pandemic.
The top tax rate would rise to 10.86 percent, up from 8.82 percent, making it the highest income tax in the nation. It would only impact those making more than $5 million annually.
It is estimated that the tax hike would raise $1.5 billion in revenues, still leaving the state with a massive deficit.
Other measures planned to potentially increase revenues for the state include the legalization of adult-use marijuana, legalization of sports gambling, and a delay of a planned tax cut for the middle class.
Without federal assistance - Cuomo called on the new administration to provide $15 billion in aid - the governor said that the state may have to cut expenses, raise taxes, and potentially borrow due to the budget shortfall.
Among the doomsday scenarios, Cuomo said that the state could be forced to cut billions in school funding, approximately $600 million in Medicaid, and nearly a billion dollars in other cuts.
“The story of COVID has many chapters - we launched the battle last year and now we must not only finish it, but begin an aggressive post-COVID reconstruction," Cuomo said. "We are in a different time and a different world than just one year ago and we shouldn't be surprised that this budget will look different.
“This budget is really the economic reconciliation of the COVID crisis, the cost of the Covid crisis,” he added. “This year, it’s going to be about reconciling the responsibility of the battle and completing the battle.”
If the federal government provides New York with the $15 billion Cuomo believes the state is owed, he vowed to:
- Advance a $306 billion infrastructure plan that includes $29 billion in green energy investments;
- Enact a multi-billion program to preserve 100,000 affordable homes;
- Institute a $15 cap on broadband for low-income families, address food insecurity, and continue an investment fund to help undocumented New Yorkers;
- Create a $130 million Pandemic Recovery and Restoration program to aid small businesses, restaurants, arts, and entertainment;
- Establish a $40 million Infectious Disease Resiliency Commercialization Fund to fast-track innovations and address emerging health threats.
“We have a plan in place, a strength that we have not had before and I believe our future is bright, but Washington must act fairly if we are to emerge on the other side of this crisis,” Cuomo said. “Despite the federal irresponsibility, which allowed COVID to ambush our state, New Yorkers are ready to begin rebuilding, but for that to happen, we need SALT repealed and $15 billion in rightfully deserved federal aid - and we need it now.”
“After years of federal hostility, I believe the stars are lined up for that to change - we just need to do it. We built the greatest state once before and I know that we will do it again."
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