The relief package that Congress approved Monday did not include a financial bailout for states affected by the pandemic, leaving New York with a multimillion-dollar budget deficit for the new year.
The leader of the State Assembly said that now is the time to push through new taxes on the rich to start making up for the loss.
The state deficit is at least $ 8 billion, according to government budget office Andrew Cuomo, although the governor said it could be closer to $ 15 billion.
Assembly Speaker Carl Heastie and the Democrats he runs in this House have been pushing for months to enact new taxes on wealthier New Yorkers to help make up for the deficit. Supporters argue that the state’s more than 100 billionaires have seen their wealth increase during the pandemic.
“The Assembly … supports revenue collection before the end of the year,” Heastie said.
Heastie would like to set new higher income tax brackets before the end of the year so the state can start closing the gap now. He said he is concerned that if higher taxes are agreed upon in the state budget, which will take effect on April 1, they could be made retroactive in early 2021. Heastie said the state constitution it requires that a “warning” be given for new taxes and wants to avoid possible legal challenges.
“It’s a legitimate question to have answered,” he said. “I think there is a constitutional issue.”
There are precedents for the collection of new taxes retroactively. During the last recession, in mid-2009, the state enacted a temporary surcharge on New York’s richest as part of its budget, but it went into effect earlier this year.
Cuomo said that even if new taxes were passed this month, they would not bring in enough money to prevent mass layoffs of front-line workers.
“That means we’re going to fire the people we need to make the vaccines,” Cuomo said. “Dismiss the expenses of the National Guard, fire the police, fire the people, fire the people in the hospital, in the midst of a pandemic.”
Cuomo wants to wait before making decisions about closing the budget gap until after Joe Biden is sworn in as president on Jan. 20. to convince Senate leader Mitch McConnell to change his mind and agree to authorize federal aid for states and local governments.
“I just hope Joe Biden comes in quickly and that sanity restores the nation,” Cuomo said.
Heastie said he does not believe the federal government, even with a Democrat as president, will solve all of the state’s fiscal problems.
“He hopes Joe Biden, the Biden administration, can come in as the cavalry and save the day,” Heastie said.
Heastie said if Democrats don’t win two Senate seats in Georgia in the Jan. 5 election, then even the Democratic president might not be able to win a bailout package from a strengthened Senate Republican majority.
“Mitch McConnell could continue to be the same impediment he has been to giving state and local aid,” Heastie said.
Any new fiscal measure would also need the approval of the state Senate. More than 30 Democratic state senators, who are the majority in this house, say they support additional taxes on the state’s millionaires and billionaires. But the Senate has not yet committed to approving anything before the end of 2021.
However, it is increasingly likely that both homes may return before Dec. 31 to pass protections for tenants who are on eviction and for homeowners threatened with foreclosure as a result of the loss of related jobs. with the pandemic.