Cuomo warns of tax increase
‘Tremendous’ increase to help offset crippling deficit
ALBANY — New Yorkers should anticipate significant tax increases to help raise state revenue and offset a crippling budget deficit caused by the coronavirus pandemic, Gov. Andrew Cuomo said Wednesday.
The governor spoke definitively about an upcoming tax increase for the state during a coronavirus briefing at the state Capitol as the state’s multi-billion-dollar deficit mounts from economic setbacks and unprecedented COVID-19 pandemic spending.
The state estimates a $14.9 billion revenue shortfall this year and more than $30 billion over two years, mounting to nearly $63 billion over four years.
“If there’s no federal aid and we have to do the budget, you’re going to have to do tremendous tax increases,” Cuomo said. “You’ll probably see tax increases in any event — pardon my skepticism about Washington. You could see dramatic tax increases that would hurt families and hurt the economy.”
Cuomo did not specify a sum or a proposed percent increase, but posed the question Wednesday.
“How much? … How much on whom and how much do you need?” he asked. “A tax increase is not a political statement. It’s a policy statement and it’s a revenue device. That’s why it has to be done in the budget.
“We need federal aid — period,” the governor added. “I believe there will be a lot of cuts, but that has to happen within all the context of decision in a budget. I believe a lot of tough decisions will need to be made.”
Cuomo, New York City Mayor Bill de Blasio, state Senate Majority Leader Andrea Stewart-Cousins, D-Yonkers; state Assembly Speaker Carl Heastie, D-Bronx; and multiple labor activist groups sent a letter to the state’s congressional delegation Wednesday urging lawmakers to provide adequate funding for U.S. states and localities in the pending stimulus bill to avoid devastating cuts. Cuomo and leading officials have sent numerous letters to various federal departments and executives this year requesting additional COVID-19 relief for states and local governments.
“There is no tax increase that can make up for the lost revenue from Washington,” Cuomo said. “I am telling you, we cannot close this financial gap without federal aid, and that’s what the letter to Congress says.”
Last week, House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Charles Schumer, D-N.Y., threw support behind a $908 billion compromise federal coronavirus relief package. Democrats see the measure as a down payment for additional funding they plan to legislate after President-elect Joe Biden’s administration takes office Jan. 20.
Lawmakers continue to finalize the assistance plan.
“I don’t want to give up on Washington yet, because if you assume there’s no aid from Washington, balancing this budget is going to be detrimental to the state, the city and every family in this state,” Cuomo said. “I’m skeptical that Washington ever provides all the funding that they should provide.”
Conservative and liberal economists agree targeted federal aid is critical for states and localities to help kick-start the economy, Cuomo said, who added that aid should be distributed to states based on need and COVID-19 outbreak.
“I’m not willing to say Washington shouldn’t do what is fair and right and just help us with this financial crisis — especially since it’s in the nation’s best interest to get the economy going and if you starve every state, you’re going to hurt the nation,” the governor said.
Top state officials anticipate 20% widespread cuts to health care, education and local governments without additional federal assistance, which would lay off thousands of health care workers, teachers, government and other essential workers. The funds have largely been withheld from school districts, hospitals and a multitude of essential state programs this year while the federal government’s next COVID-19 relief bill remains in limbo.
“You’re going to have to do massive layoffs, you’re going to have to do massive borrowing — you’re going to have to do all of the above,” Cuomo said, who went on to repeat his frustration that 3 million European travelers spread the virus after traveling to the state last January and February.
“There’s no reason why New Yorkers should bear more pain.”