Cuomo Urges Lawmakers to Wait to Enact New Taxes on High Earners

Gov. Andrew Cuomo said Wednesday that he doesn’t want to consider new taxes on wealthy New Yorkers, or other avenues for raising revenue, until February or March when Congress could deliver another stimulus package with direct aid for state and local governments.

In the meantime, New York will distribute $1.5 billion to state-funded organizations and agencies that are deemed to have critical cash flow problems, Cuomo said.

“We can’t lose essential workers in essential organizations, especially with what they’re doing now,” Cuomo said.

New York is currently facing a $15 billion budget deficit heading into next year because of lost tax revenue during the COVID-19 pandemic coupled with direct costs related to the state’s response to the virus. That’s the largest state budget gap in more than a decade.

Cuomo, in recent months, has pushed Congress to provide billions of dollars in relief to the state to help stave off the deficit. But Republicans in Congress have been reluctant to do so, equating the idea to a bailout.

In recent days, reports have suggested that Congress could pass a short-term stimulus bill that doesn’t include new aid for state and local governments. Cuomo did not react well to that news Monday.

“This is a major problem. It’s also a major disgrace,” Cuomo said. “After the election, people were supposed to put their politics aside and do their job. Clearly that hasn’t happened.”

Democrats in the state Legislature, this week, have suggested that they may try to address the deficit by returning to Albany before the end of the month to enact new taxes on wealthy New Yorkers. It’s unclear how much revenue those tax hikes would raise.

Assembly Speaker Carl Heastie, D-Bronx, told reporters Monday that the idea was still on the table, and that he’d prefer to enact those tax hikes sooner rather than later. He questioned the legality of passing new taxes in March and making them retroactive back to January.

“It’s our belief that you can’t pass a tax increase in March and retroact it back to January,” Heastie said. “The constitution is clear when it says you have to give people notice.”

Senate Majority Leader Andrea Stewart-Cousins, D-Westchester, also hasn’t ruled out a return to Albany, she said in an interview this week set to air on New York NOW this weekend.

“We’re not planning or not planning,” Stewart-Cousins said. “What we are trying to figure out is what makes sense.”

Cuomo, on Wednesday, said his office believed the state wouldn’t have a problem with approving new taxes in March and making them retroactive back to January. He said that’s been done before in New York and survived judicial review.

“We’ve done tax increases in 2009, and had them retroactive, and they’ve been upheld,” Cuomo said.

Cuomo said he’ll be speaking Wednesday afternoon with President-Elect Joe Biden about the need for federal relief for state governments. He’s hoping that states will have better luck with that relief after Biden takes office in January.

“The problem is, he has to get into office,” Cuomo said. “So you’re talking February or March of next year.”

New York’s state budget is due at the end of March, though the Legislature could act at any time between now and then on new fiscal measures.

Heastie responded to Cuomo's comments on Twitter, saying he was "confused by the Governor's logic."

"We are hoping to give him more revenue to ease the fiscal strain and help maintain essential services until the federal government provides assistance, and he is threatening cuts," Heastie wrote.