The $ 1.9 trillion COVID-19 relief package approved by the U.S. Senate eliminates New York State’s projected budget deficit, possibly denying the need for sharp tax hikes or spending cuts, according to the office of Senate Majority Leader Chuck Schumer on Monday.
“Okay. Thanks to @SenSchumer, the NYS budget deficit for this year is ….. Zero, nothing, granddaughter, zilch (New York terms),” Schumer radishome Angelo Roefaro tweeted.
The American Rescue Plan provides the state government with unrestricted $ 12.6 billion in aid, a measure advocated by Schumer, the senior senator from New York. The measure was approved by the Senate in a 50-49 vote and is expected to be handed over to President Biden for approval by the Democratic-led House of Representatives on Tuesday.
Asked whether the geyser of the pandemic relief eliminates the need for tax increases or spending cuts, Roefaro told The Post that “the statement speaks for itself.”
Roefaro continued: “The way NY decides its budget policy is a matter for the state legislature and the administration. Our job was to provide resources to help New York cope with and overcome Covid and its impacts, including the tax impact. And we did it fully ”.
Faced with a budget gap of several million and a restricted left flank in the state legislature calling for massive tax increases on the rich, Cuomo proposed raising the income taxes of the richest New Yorkers to a maximum rate of 10.86% , of 8.82%. Wealthy New York City residents pay a combined state and local income tax rate of 14.7%, the highest rate in the country.
But a budget analyst said there is no need to raise taxes now, as the geyser of federal stimulus funding flows into New York from Washington.
“There’s no need to raise taxes,” said EJ McMahon of the Empire Center for Public Policy, who long ago claimed Cuomo was exaggerating New York’s tax problems.
He said the income tax on the rich proposed by Cuomo as part of his executive budget plan “is no longer necessary.”
McMahon said the federal aid is so large that it is enough to prevent significant tax hikes over the next two fiscal years.
Asked about Schumer’s office claim, Cuomo’s budget spokesman Freeman Klopott referred to the governor’s comments on Sunday, when he said tax hikes continue on the table despite the influx of funeral funding .
“It’s on the table…. It’s the difference between $ 12.5 and $ 15 [billion]. And make no mistake, the $ 12.5 billion is very, very useful. But, as you know, because I’ve said it a hundred and fifty times, I think we needed $ 15 billion, ”Cuomo said.
“So we have a gap and tax increases are on the table. And they are on the table of the Assembly and the Senate, I don’t speak for them, they can speak for themselves, but yes, they are on the table. because you have damage to repair “.
Cuomo expressed concern about what happens when the single federal cash infusion disappears. Expenditure has risen during the pandemic despite an economic recession triggered by the security blockade, falling tax revenues and mass layoffs.
McMahon said Cuomo is right to worry about what happens beyond the next or two budget cycles. The governor and state lawmakers must draft a new budget before April 1st.
But McMahon is also concerned that Cuomo, abused and weakened by multiple allegations of sexual harassment and residential scandals, may be more able to meet lawmakers’ tax and spending wishes than in the past. Prominent Democrats, including Senate Majority Leader Andrea Stewart Cousins (D-Yonkers), are calling for his resignation.
“The question is whether he will try to buy friends. People on the left would love to shake it up, ”McMahon said.