ALBANY (TNS) — The economic shutdown to slow the spread of the coronavirus has left New York facing a $30 billion deficit over the next two years, and hiking taxes on the wealthiest New Yorkers won’t cover the gap, state officials said Wednesday.
Gov. Andrew M. Cuomo said the fiscal needs for New York far exceed what could be generated through increasing taxes on the wealthy.
The governor said New York is grappling with a $14 billion deficit this budget cycle and a $16 billion gap expected in the next fiscal year. Then there’s the Metropolitan Transportation Authority (MTA) facing an expected $12 billion gap, the Port Authority of New York and New Jersey’s looking at a $3 billion shortfall, and New York City dealing with a $9 billion hole, Cuomo said during a press call.
“You’re at about $50 billion (in total deficits). You have 100 billionaires,” he said. “You will have to tax every billionaire half a billion dollars to make it up. You know what that means? That means you would have no billionaires.”
State Budget Director Robert Mujica also dismissed the notion of making up the lost revenue through tax increases on the wealthy, noting that New York already has some of the highest, and most progressive, wealth taxes — including the second-highest tax on wealthy residents in the nation.
“There is no way to tax that much money without doing a staggering amount of revenue-raisers that nowhere in the country has and no one has ever seen before,” Mujica said. “The only alternative is really to have the federal government provide the assistance. There’s not a way to tax us out of this problem.”
The Citizens Budget Commission has also reported New York City residents are subject to the second-highest personal income tax in the country at nearly 12.7%. New York also imposes an 8.8 percent personal income tax statewide on married couples filing jointly with incomes greater than $2.2 million annually; only New Jersey and California impose higher wealth taxes, the CBC’s report shows.
Even before the COVID-19 pandemic threw state and local budgets into disarray, state legislators and labor unions were pushing for tax increases on the wealthy to help fund critical services and programs such as expanding affordable housing and ending homelessness in New York.
The group has called for bumping up the tax brackets for New Yorkers who make $1 million or more annually, and implementing a “pied-a-terre” tax on second homes in New York City and a new capital gains tax on the state’s resident billionaires.
A poll conducted by labor unions in February showed broad public support for increasing taxes on the ultra-wealthy.
The latest figures on the state’s deficit come as Cuomo and local elected officials renewed their calls for Congress to include financial relief to state and local governments in the next legislative package to address the economic hits delivered by the pandemic. The U.S. Senate’s Republican majority this week released a plan, dubbed the HEALS Act, that does not include funding for those entities.
Cuomo, who sent a letter to congressional leaders on the need for funding, said it will be up to the federal government to provide appropriate revenue to localities to address the deficits.
“I don’t see additional revenue coming — that’s why I’m pushing so hard for the federal government just to have a responsible bill,” he said. “The future for revenues is basic fairness by the federal government.”