“Tax the rich. Tax the rich. Tax the rich. We did that. God forbid the rich leave.” – Gov. Cuomo
The state of New York is facing a $2.3 billion shortfall — that’s billion with a B, heading into the new fiscal year.
“This is the most serious revenue shock the state has faced in many years,” said the state’s comptroller. The news imperils Cuomo’s budget which was introduced not 3 weeks ago.
Live footage from the Governor’s office:
The Buffalo News has more:
Calling the situation “as serious as a heart attack,” the Democratic governor said revenues are $2.3 billion below projections for the fiscal year that ends March 31. That is on top of a $500 million revenue dip from personal income taxes that the Cuomo administration recently projected when it put together a budget plan last month.
Whether the situation continues or improves is unknown, as is how the Cuomo administration will deal with the gloomy tax receipts in both the current and next fiscal years.
The timing of the announcement at the Capitol was not accidental. Lawmakers, who traditionally want to spend more than governors, are getting down to the nitty-gritty work of coming up with some budget alternatives – including more money for public schools – to Cuomo’s plan. It comes before a final “cash report” on January’s spending and tax revenues is complete, but Cuomo aides get daily numbers from the tax department on receipts.
State Comptroller Thomas DiNapoli, a former member of the Assembly who sat next to Cuomo in the ceremonial Red Room of the Capitol, said lawmakers need to be aware of the unfolding fiscal situation.
“This is the most serious revenue shock the state has faced in many years,” DiNapoli said, before quickly adding that the situation could improve in the coming months.
The culprit? Not enough revenue from state income taxes. BN ctd:
Cuomo said the super-wealthy in New York – accounting for 1 percent of tax filers – end up paying 46 percent of the personal income taxes the state collects each year.
“Tax the rich. Tax the rich. Tax the rich. We did that. God forbid the rich leave,” Cuomo said of a mobile group of people who can more easily switch residences to states with lower state and local tax levels.
Cuomo declined to say what spending might have to be trimmed to accommodate the lower tax revenue numbers, but he noted that education and health care are, by far, the two largest areas of the state budget.
…Cuomo has railed for a year about President Trump’s tax program that blue-state governors say was politically written to help high-income taxpayers in Democratic states pay for tax cuts of people living in lower-tax, Republican states.
“There’s definitely a change in behavior by high-income individuals,” said Robert Mujica, Cuomo’s budget director, of estimated personal tax payments that did not materialize in December and January.
In that two-month period, Mujica’s office had projected estimated personal tax payments would total $6.2 billion. They came in, instead, at $3.9 billion. Such estimate tax payments, unlike withholding taxes on a worker’s paychecks, often represent non-wage income. Officials say other high-tax states whose high-income residents will feel the effects of the new federal tax law also are experiencing state personal income tax revenue declines.
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