Higher taxes aren’t needed: Albany budgeteers have plenty of money for government expenses

Despite his political clout being diluted by investigations and allegations of scandal about nursing home COVID deaths and sexual harassment, Gov. Cuomo retains the powerful constitutional authority to shape the state budget due on April 1. He needs to use that to persuade the Legislature against raising billions extra in taxes just because they can.

In this most unusual year, with $23 billion in COVID relief coming to New York State from Washington as part of the American Rescue Plan, the usual debate about raising or cutting taxes is moot. There is no reason right now to raise taxes and there would be nothing to do with any new revenue, as everything is fully funded, from upstate school districts to NYC subways.

The American Rescue Plan also prohibits states that receive money from cutting taxes, so that’s off the table as well.

But the basic math facts don’t bother those Democratic lawmakers in the Senate and Assembly who have been clamoring for rich folks to cough up $7 billion more in taxes, a time-worn battle cry that signifies members’ liberal bona fides and helps inoculate them from primary challenges on the left flank.

What’s the point then? Just to punish the rich and dare them to leave? The original rationale for raising taxes — to fill what was once feared to be a $15 billion COVID-caused budget deficit — has been smashed to bits. There’s no deficit this year. Zero. Tax revenues came in higher than expected. Oh, and don’t forget that giant, giant check from the feds, which includes $12 billion straight to the state.

Why would Albany arbitrarily make the state’s tax climate less favorable, right when businesses and rich people, whose income taxes cover most of the state’s education and healthcare expenses, are mulling whether to stay in New York or telework forevermore, now that they know they can? Why would we raise taxes just in New York, risking interstate flight, just as the Biden administration reveals plans to seek higher top marginal income tax rates, increased taxes on investment income and increases in corporate tax rates at the federal level, to help pay for his $3 trillion infrastructure plan?

Cuomo’s executive budget actually already has a tax hike in it, temporarily raising income tax rates on people earning $5 million or more a year, generating $1.5 billion this year, which is more than enough. Cuomo could then veto any extra taxes the Legislature seeks, forcing lawmakers to take individual votes to keep them.

Will the veto-proof majorities of 43 Senate Democrats and 107 Assembly Democrats, including the upstaters and suburbanites, whose school budgets depend heavily on already volatile income tax receipts, roll the dice on a not absolutely-essential tax hike, and risk alienating high-income individuals?

Meanwhile, since the state’s suddenly drowning in cash, Cuomo must restore tens of millions in cuts he proposed in January to New York City’s public hospitals, and programs for poor children, homeless people and victims of domestic violence. Slashing aid to our most vulnerable people while billions in federal dough flows into the state is pointless and cruel.

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