New York's Economy
Assembly Speaker Carl Heastie said Monday that negotiations are underway with the Senate and Gov. Andrew Cuomo on potential tax increases on the wealthy in New York, and that lawmakers could still return to Albany before the end of the year to act on such a measure.
Heastie, D-Bronx, said it would be ideal to approve tax hikes on the rich before the start of the year instead of waiting to address the issue as part of the state budget in March.
“I think you put in jeopardy doing an income tax that starts in 2021, in 2021,” Heastie said. “So, if you want that measure, I think it would be safest to consider it before the change of the year.”
Heastie told reporters in Albany Monday that the state could open itself up to a legal challenge if lawmakers approve a tax increase on the wealthy in March and try to make it retroactive back to January.
That’s because, Heastie said, part of the state constitution requires notice to be given to taxpayers when such an increase is implemented.
“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.”
There’s less than three weeks left in the year, putting lawmakers on a tight deadline to come to an agreement with Cuomo on potential revenue raisers.
Both Heastie and Senate Majority Leader Andrea Stewart-Cousins, D-Westchester, have said they would support higher taxes on the wealthy to help fill the state’s budget gap. Cuomo has said those tax increases will likely be necessary without aid from Congress.
But Cuomo pushed back Monday against the idea of immediately implementing higher taxes on the wealthy. He said that such an increase wouldn’t generate enough revenue to address the state’s budget deficit, which currently sits north of $10 billion.
“A state tax increase is not just a political decision. It’s a revenue decision,” Cuomo said. “Tax increase, maybe it gets you $1.5 billion or $2 billion. You need another $10 billion to come even close.”
Cuomo said he’d rather wait to see if the federal government comes through with relief for state and local governments, which have struggled during the pandemic due to lost tax revenue and their direct response to the virus.
Members of Congress haven’t come to a deal on a new federal stimulus package, but they’re currently considering a $908 billion spending bill that could provide a significant short-term solution for states, like New York, struggling with their finances.
It’s unclear if the measure will have support from President Donald Trump and Republicans, who have been reluctant to support legislation that would provide direct aid for state governments.
Cuomo said Monday that, even if New York has to bide its time for President-Elect Joe Biden to take office, that he would prefer to wait until the federal government decides on a new aid package.
“To do a budget without knowing how much we’re going to get from the federal government would be painful for everyone,” Cuomo said.
Democrats, who control both chambers of the state Legislature, haven’t announced firm plans to return to Albany before the end of the year. But Heastie told reporters Monday that they would have to reconvene in some form to extend new rules on meeting virtually.
Lawmakers have been conducting hybrid legislative sessions during their last few appearances in Albany, with some lawmakers traveling to the capitol in person and others appearing virtually. That option was allowed under a formal rules change approved by the Legislature.
Heastie said that change needs to be extended, but that lawmakers won’t vote on anything before the end of the year if they haven’t struck a deal with Cuomo and the Senate.
“We’re in the discussion stage of knowing that there’s huge amounts of needs, what can we do that’s within our grasp,” Heastie said.
Heastie also said he’s negotiating with Democrats in the Senate on a potential eviction moratorium, which had previously been enacted by Cuomo through an executive order. It’s possible that lawmakers could codify something more firm into state law.
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