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NYS Budget Agreement Reached, Nearly One Week Late

The New York State Capitol
Jackie Orchard

Nearly a week after it was due, Governor Andrew Cuomo and New York State’s legislative leaders have announced final agreement on a $212 billion budget deal. 

It increases taxes on the wealthy and adds funds to schools and for renters and small businesses, including restaurants, who struggled financially during the COVID-19 pandemic.

The Senate and Assembly held a marathon session that was expected to last well into Tuesday night to approve the budget bills. 

The budget increases taxes on the wealthy and corporations by $4.3 billion when fully implemented. It contains an increase in the personal income tax rate on New Yorkers who make more than a million dollars from 8.82% to 9.65%. It adds two new, higher, tax brackets, 10.3% for those making over $5 million, and 10.9% for those earning over $25 million. Corporate franchise taxes will also be going up, from 6.5% to 7.25%. 

Assembly Speaker Carl Heastie, in a statement, says the new taxes, along with other actions in the budget address “the historic inequities that have existed for too long.”  

The new state tax increases, combined with local tax rates, will result in New York having the highest tax rate in the nation.   

Andrew Rein, the president of the fiscal watchdog group Citizens Budget Commission said, in a statement, that “the tax increases simply are unnecessary and economically risky,” and provide incentives for wealthy New Yorkers to leave the state. 

The state received $12.5 billion from the recently enacted federal stimulus package, and $10 billion more in federal dollars is going directly to local governments. Rein says the federal aid should have been “sufficient” for the state to balance its budget and plan its spending going forward to avoid future deficits. 

Part of the revenue from the new taxes and the federal aid will be used to create a $2.4 billion rent relief program to help renters who lost jobs during the pandemic and have fallen behind on rent. Those with incomes who qualify would be eligible to up to 12 months of rent payments, retroactive to March 2020, and three months of future rent payments. The fund will also be available to undocumented workers. 

Undocumented immigrants who lost their jobs during the pandemic will have access to a $2.1 billion fund to retroactively provide federal stimulus payments.  Many paid federal and New York State taxes, but have been unable to access the benefits. 

$1 billion will be made available to help struggling small businesses harmed during state mandated shut downs. The fund includes $25 million to help restaurants hard hit during the pandemic. 

School aid will increase by $3 billion to $29.5 billion. A phased in plan will, by the 2023 school year, provide enough money to finally fulfill a 2006 order from the state’s highest court in the Campaign for Fiscal Equity case. The court decision said the state needed to spend more money to guarantee every child’s constitutional right to an adequate education. 

Jasmine Gripper, who leads the pro-school funding group Alliance for Quality Education, was jubilant.

“What some people thought was impossible, what we were fighting for years for is finally, finally, finally coming to life,” Gripper said. 

The budget also freezes tuition at State and City University campuses, and increases awards for the Tuition Assistance Program by $500 to $5,665.   

Overall, the spending plan more closely resembles what the Democratic-led legislature wanted than what Governor Cuomo, also a Democrat, first proposed. 

Cuomo had sought a lower level of spending and just a fraction of the tax increases in the final budget. The new budget spends 9% more than the last fiscal year, Cuomo, during a decade in office, successfully limited spending growth to around 2% per year. And the governor wanted a $2 billion tax package, which raised taxes less steeply on the wealthy, and postponed a planned middle class tax cut.   

Cuomo normally holds a lot of power in the budget making process, but he was at a disadvantage during talks this year as he struggles with four major scandals. They include sexual harassment charges by multiple women, and a federal investigation into whether he and his top aides hid the total number of nursing home residents who died during the pandemic. Also, there are questions about whether the governor gave family and politically connected associates improper access to COVID1-9 tests, and whether Cuomo broke the state’s public officers’ law by having staff help him write a book about his management of the pandemic. 

Senate Leader Andrea Stewart-Cousins has called for Cuomo’s resignation and Assembly Speaker Carl Heastie has launched an impeachment inquiry. 

But Cuomo put the best face on the plan in an event at a vaccine site at the Javits Center in New York City. 

“We’re working on a budget up in Albany that’s going to be the biggest and best action plan for the state of New York ever,” Cuomo said Tuesday afternoon.  

The governor did not offer details, and the event was closed to media, so he did not answer any questions. 

The budget also includes a plan to make high speed internet available and more affordable to those in urban and rural internet deserts. Mobile sports gambling will be expanded, creating an estimated $500 million in annual revenue from the state. 

There will be more $2.4 billion more in funding for child care subsidies. $1.84 billion will go toward environmental projects, including $500 million for clean water infrastructure and $300 million for the New York State Environmental Protection Fund.

Karen DeWitt is Capitol Bureau chief for New York State Public Radio, a network of public radio stations in New York state. She has covered state government and politics for the network since 1990.
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