Gotham Gazette http://www.gothamgazette.com/component/tags/tag/1677 Thu, 14 Dec 2017 15:06:55 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) Double the New York Earned Income Tax Credit http://www.gothamgazette.com/?id=6988:double-the-new-york-earned-income-tax-credit http://www.gothamgazette.com/?id=6988:double-the-new-york-earned-income-tax-credit cuomo fight fair pay wage

(Photo via the Governor's Office)


As President Trump pushes massive tax cuts for the wealthy our state government should be at the forefront of implementing progressive tax policy to help working families. Expanding the state Earned Income Tax Credit (EITC) is an effective and affordable way to reward work and bring low-income families into the middle class. If Governor Cuomo wants to show that New York can be a progressive beacon in the Trump era, he should push to double the size of the state EITC.

A working parent earning the minimum wage in the Bronx or Schenectady got a much-deserved raise this year and will again next January as a result of increases in the state minimum wage. At the same time that they earn more, however, they pay more in taxes and risk losing valuable benefits such as child care assistance, food stamps, and rental assistance. The EITC helps make up for these losses if they occur.

The EITC is a credit that increases tax refunds and goes up as recipients earn more. For example, this year a single parent with one child earning $17,000 will get a $3,400 federal credit that they can put towards child-care, rent, food, and paying down debt.

Currently, the state-level credit pays 30% of the federal EITC. In 2014, on average families with one child received $666 from the state EITC and families with two kids $1064.

Economists have shown that the EITC leads to both increased employment and decreased poverty by helping over 9 million Americans meet their basic needs. The EITC helps working families join the middle-class, allowing them to pay down debt and build assets. Unlike many economic development projects, which can be ineffective and politicized, the EITC puts cash into the hands of working people in the communities that need consumer spending, economic growth, and jobs.

Policymakers and analysts left, right, and center have supported expanding the EITC. The federal program began under Republican President Gerald Ford and was significantly expanded under President Bill Clinton. In the State Assembly, Democratic Speaker Carl Heastie and the GOP minority leader, Brian Kolb, have both advocated for increasing the credit.

Expanding the EITC will also help make up for New York’s regressive tax system, which burdens the working people more than the wealthy. The Fiscal Policy Institute found that New Yorkers making under $18,000 a year pay 10% of their income in state and local taxes, while families in the top 1% only pay 8% of their income in taxes. An expanded EITC will give back some of the property, sales, and income taxes that working families pay.

Moreover, the federal EITC does not take into account the New York’s high cost of living, which is 15.7% above the national average. An expanded EITC will help alleviate the additional burden that high prices put on low-income New Yorkers.

Doubling the EITC to 60% of the federal credit would be a small portion of the state’s $153 billion budget this year. In 2014 the cost of the EITC was under $1.1 billion and helped over 1.6 million working New Yorkers. Governor Cuomo could easily pay for expanding the EITC by limiting tax deductions and exclusions for high-income individuals and cutting corporate subsidies.

New York’s working families deserve a raise and an opportunity to enter the middle class. Doubling the state EITC is the perfect way to give them a hand up.

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Devin Gould is a graduate student in public policy at Princeton University’s Woodrow Wilson School of Public and International Affairs. He previously worked at the NYC Economic Development Corporation and was President of the Four Freedoms Democratic Club in Manhattan.

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Double the New York Earned Income Tax Credit Tue, 13 Jun 2017 04:00:00 +0000
Comptroller Pushes for Expansion of Tax Refund for Working New Yorkers http://www.gothamgazette.com/?id=6750:comptroller-pushes-for-expansion-of-tax-refund-for-working-new-yorkers http://www.gothamgazette.com/?id=6750:comptroller-pushes-for-expansion-of-tax-refund-for-working-new-yorkers stringer at city hall rally

 Comptroller Scott Stringer (photo: @scottmstringer)


In his testimony before the New York State Legislature last week on the state’s proposed budget for 2018, New York City Comptroller Scott Stringer called for the expansion of a tax credit that could potentially pull thousands of New York City residents out of poverty, continuing a push he began last year when he first floated the idea.

The centerpiece of Stringer’s proposal is to triple the city’s Earned Income Tax Credit (EITC), a refundable tax benefit aimed at working families that functions on federal, state and city levels. The credit, which incentivizes employment, grants individuals and couples who qualify anywhere between several hundred and a few thousand dollars, depending on the number of children they have. New York state matches up to 30 percent of the federal EITC and the city matches another 5 percent. Stringer’s proposal would see the city’s contribution increase to 15 percent. It would require state lawmakers to authorize the city to expand its tax credit and would need the City Council to pass legislation, and it would have to be funded in the city budget.

“Tripling the City’s earned income tax credit puts money in the pockets of those who need it most,” said Stringer, in a statement to Gotham Gazette, noting that one-fifth of New Yorkers live below the poverty line. “It’s one of the most effective anti-poverty programs in America, and an expansion would have extraordinary benefits across the five boroughs. It would stimulate our economy, boost small businesses, and support local communities. Most importantly, it’s the right thing to do at a time when so many working families are struggling to make ends meet.”

The federal EITC, based on a household’s total earnings, gives up to $6,269 to a couple with three or more children making a maximum of $53,505 in a year. An individual without children making a maximum of $14,880 can receive up to $506 in a tax refund. The federal credit along with the state and city’s contribution combine for a significant benefit -- a maximum of $8,463 for qualifying New York City residents -- that can inject money back into the pockets of low- to moderate-income New Yorkers and spur spending.

Studies have found that the credit is highly effective at raising employment rates for single parents and that families with children typically use the credit to pay for things like home repair, maintenance on vehicles that are used to commute to work, and in some cases, to continue their education. This success has made the tax credit popular for conservatives and liberals, alike.

The comptroller first released his proposal, accompanied by a detailed report, in September last year at an Association for a Better New York breakfast event. The report projects that tripling the city’s contribution could lift 15,000 families above the poverty line. The average credit for an individual who qualifies would increase from $110 to $330, and for about 6000 New Yorkers, it would effectively nullify their city income tax burden. The proposal would cost the city between $210 to $220 million, spending which is likely to go back into the city economy. According to the comptroller’s office, roughly 950,000 New Yorkers qualified for the EITC last year, receiving about $2.8 billion in tax refunds. That translates to about 150,000 families that escaped poverty levels.

One setback with the credit is that many New Yorkers do not realize that they qualify for it. Under Mayor Bill de Blasio, a progressive Democrat, the city has recognized the strength of the EITC program. In 2015, the Department of Consumer Affairs (DCA) launched a media blitz to promote the tax credit, including ads in the subways, on bus shelters, in print, radio and online. That ad campaign has become a staple in promoting the city’s free tax preparation program. According to estimates by Civis Analytics, a data analytics firm that helped the city with its “Start By Asking” benefits awareness campaign, of the 1.1 million New York City residents that qualify for EITC, approximately 120,000 of them do not claim the credit, which is the city’s current concern. DCA spokesperson Abigail Lootens, in an email, said the agency is closely reviewing the comptroller’s EITC proposition. “We are also dedicated to reaching those who are currently eligible but not claiming this vital credit,” she said.

At the state level, Stringer has found an ally in Senator Jose Serrano, a Democrat whose district includes the South Bronx and parts of East Harlem, low- and middle-income communities for which the EITC is a boon. Serrano introduced a bill in the current legislative session based on Stringer’s proposal, to allow New York City to expand its EITC contribution. The senator stressed that expanding EITC is an “organic approach” to reducing poverty. “While it does require a financial commitment by the city, a vast majority of that money goes right back into the community,” he said in a phone interview.

Serrano’s bill is currently before the Senate’s Cities Committee, where he hopes it’ll receive the necessary support. The committee is chaired by Sen. Simcha Felder, a Democrat who caucuses with the Republican majority. A spokesperson for the governor’s office said the proposal would be reviewed.

“It is really such a timely bill,” Serrano said. “Over the last few years, the rich have gotten richer and the poor have gotten poorer. This will help bridge that gap a little and help people get above the poverty line.”

Ron Deutsch, executive director of the nonpartisan Fiscal Policy Institute, said both the city and state should increase their EITC contributions “to help bolster low-income family earnings and help boost them out of poverty.” Aside from Serrano’s bill, there are multiple proposals before the state Legislature that enhance the EITC in some shape or form, including a bill sponsored by Assemblymember Robin Schimminger, an upstate Democrat. Schimminger’s bill, which increases the state’s EITC from 30 to 35 percent of the federal EITC, has been introduced in three previous legislative sessions but has never made it beyond the Ways and Means committee. Schimminger’s office did not return a request for comment by publishing time.

“This is one of those bipartisan issues where there’s agreement,” Deutsch said. “In terms of why it doesn’t get done, I think it’s always a matter of political will in Albany. Given how many New Yorkers are struggling to make ends meet, this would be a logical means to address that.” He believes the state should increase its contribution to 40 percent, which he said comes with a price tag of $400 million annually. “I would suggest it’s a good investment that spurs the economy,” he said.

It’s unclear, however, whether Stringer’s or Schimminger’s proposals will find support in either the Democrat-run Assembly or the Republican-led Senate. Spokespersons for Assembly Speaker Carl Heastie, Senate Majority leader John Flanagan and for the Senate Independent Democratic Conference did not respond to requests for comment.

E.J. McMahon, research director at the Empire Center for Public Policy, a conservative think tank, believes the cost of expanding EITC is likely the only reason it hasn’t been achieved though it has the backing of fiscal conservatives. “It’s the most effective way to incentivize and reward work,” he said, noting that it would work better if expanded at the state level. He added, “It would win broad support if we could pay for it.”

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by Samar Khurshid, City government reporter, Gotham Gazette
     

Read more by this writer.

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Comptroller Pushes for Expansion of Tax Refund for Working New Yorkers Wed, 08 Feb 2017 03:29:20 +0000
Democrats Frustrated by Governor Backing Off Party's Issues http://www.gothamgazette.com/?id=5654:democrats-frustrated-by-governor-backing-off-partys-issues http://www.gothamgazette.com/?id=5654:democrats-frustrated-by-governor-backing-off-partys-issues Cuomo Heastie ethics

Cuomo and Heastie agree on ethics reforms (photo: Governor's Office via flickr)


On Tuesday Gov. Andrew Cuomo told reporters that the DREAM Act and the Education Investment Tax Credit (EITC) he had paired were no longer part of budget negotiations. For many Black and Latino legislators the news was painful - they had pushed Cuomo to include the DREAM Act as part of his budget after he and Lt. Gov. Kathy Hochul campaigned on the issue across the city this summer. But there was also a sinking sense of deja vu.

"DREAM Act, ETC are very important. Two different reasons, two different constituencies, but both get to the same point, which is access to education," Cuomo told reporters during a visit to the state Senate chambers Tuesday. "We have no agreement. We are nowhere close to an agreement."

A number of city-based legislators, especially from the Senate, say they have been repeatedly burned by a governor who is willing to talk about their issues on the stump to earn votes from their constituents but not willing to actually expend political capital to move their issues when the opportunity presents itself. They are increasingly concerned that Cuomo is willing to cede any number of policy points in budget talks, including further raising the minimum wage, in an effort to win the support of Senate Republicans on other issues.

Sen. Jose Peralta, who has worn a "Pass the DREAM Act!" t-shirt under his jacket during session, has been very active in supporting the act as part of the budget. The $27 million program Cuomo had included would provide tuition assistance to undocumented immigrants. Peralta said he was let down by Cuomo's decision to drop the bill and will work with advocates to push Cuomo and Republican Senate Majority Leader Dean Skelos on the issue. The DREAM Act has more than enough support in the overwhelmingly Democratic Assembly.

Senate Republicans believe their opposition to the DREAM Act actually bolstered them in a number of races across the state this past fall.

In a new op-ed on Thursday, Cuomo explains that he wants to see votes on both the DREAM Act and EITC, and that while they may not be in the budget deal, he will continue to push each of them in the legislative session to follow, which lasts into mid June.

However, legislators are frustrated more generally. What is particularly irksome to Democrats this year is that Cuomo appears to be jettisoning contentious issues to get an on-time budget when he claimed earlier in the year that he would sacrifice budget timeliness for ethics reform (which the governor and Assembly Democrats have come to an agreement on).

"The governor should be equally committed to items in appropriations as he is on ethics," said Sen. Martin Dilan. "If DREAM comes out it should all come out. The budget is where we have leverage. Outside of the budget [The DREAM Act] is dead. This was a campaign promise of the governor, and I believe he and the lieutenant governor ran very hard on it."

Sen. Kevin Parker said he still has hope for the DREAM Act despite what Cuomo might have said. "There is still time for anything to happen," he said of ongoing budget negotiations. The budget is due by Wednesday, April 1.

Another item Democratic legislators point out Cuomo ran on was women's equality. And while Cuomo was supposed to help elect a Democratic Senate, he appeared to put little effort into doing so. Now the two converge as a Republican Senate blocks several key pieces of Democratic legislation, such as the DREAM Act and the abortion plank of the Women's Equality Act, and Senate Minority Leader Andrea Stewart-Cousins, a woman, is left out of budget negotiations.

Meanwhile, Cuomo has allowed his ally Jeff Klein, who heads the five-member Independent Democratic Conference, to join in leadership meetings around the budget. Mainline Democrats have cried foul over Klein being included and not Stewart-Cousins. At the first meeting of the budget conference committees, nicknamed "the mothership," Stewart-Cousins used her brief opportunity to speak to protest her exclusion. "Apparently the mothership is the only place this mother will appear negotiating the budget," she said.

Democrats appear to now have most of their eggs in the debate over increasing the minimum wage but a number of them fear Cuomo has already caved to Senate Republicans on the issue - something Skelos said was the case on Thursday, declaring an increase out of budget negotiations.

"This guy should be with us on $15," said one legislator who requested to remain anonymous of Cuomo, "but instead we have to beg and scrape to get him to push for $11.50 [for New York City]."

Assembly Member Brian Kavanagh called the minimum wage increase "the Assembly's top priority" when speaking with Gotham Gazette, but added that negotiations were centered around Cuomo's proposal for an eventual $10.50 for the state and $11.50 for the city. Parker said that the minimum wage needed to be done in this budget. "We don't want this to be another thing that comes up each year."

There has been underlying concern among Democrats that Cuomo would dump minimum wage in an effort to appease Skelos, who appears to back him on a number of education and financial issues. Skelos has pushed to remove a number of issues from budget discussions including how to use the State's massive bank settlement windfall and the renewal of mayoral control of schools. "I would guess that the independent monitor [for grand juries] is not going to be there," Skelos said after meeting with Cuomo on Tuesday. "Raising the age is not going to be there. DREAM Act is not going to be there. Other than that things are up for negotiation," he said, seemingly taking a victory lap for having nixed these items, which he and his conference oppose, from the budget.

Assembly Speaker Carl Heastie told reporters on Wednesday that a minimum wage increase is his top priority. "It absolutely has to be on the table as far as we're concerned in this conference," Heastie said.

During last year's Black, Puerto Rican, Hispanic and Asian Caucus Weekend, Cuomo, joined by Mayor Bill de Blasio, made a grand announcement that he would support a program to provide prison inmates with access to college degrees. A great majority of the lawmakers there would rather have heard Cuomo pledge to deliver the DREAM Act, but they praised and supported his plan. However, Republicans mocked and derided the idea as a waste of taxpayer money that rewarded criminals and Cuomo quietly let the initiative die.

It appears the governor may be having a similar moment this year - except that the program at stake faces criticism from both Democrats and Republicans. Cuomo's "Raise the Age" initiative that would raise the age youths can be tried as adults to 18 from 16 was initially greeted warmly by Democratic legislators. But after analyzing the complex program, which is spread out in different sections of the budget, a majority of Democrats now think Cuomo's proposal is deeply flawed. The Assembly presented a reworked version in their budget and Senate Democrats, led by Sen. Velmanette Montgomery, wrote to Cuomo on Tuesday saying they favor the Assembly version because they believe some of the provisions in Cuomo's plan will actually lead to juvenile offenders spending more time in jail.

"Raise the Age is not likely to be done in the budget," Cuomo told reporters outside of the Senate Republican conference room on Tuesday. "It's very complex. It connects with other issues..."

Melissa DeRosa, Cuomo's spokesperson, quickly contradicted her boss, on Twitter and in a statement, saying, "Raise the age is still part of budget negotiations; we believe we will successfully secure the necessary funding to implement the program."

It appears, though, that the policy will be decided outside of the budget while funding to implement it will be included in anticipation of legislation.

Cuomo defended his decision to remove issues from the negotiating table after he met with Senate Republicans on Tuesday: "The budget is my statement of saying, these are the priority issues, right? And now, people will say, 'If he didn't put it in the budget, he doesn't really care about it. That's what's happened over the years, and if it's not in the budget, then he doesn't mean it.' So the budget has become expansive from that point of view."

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by David King, Albany editor, Gotham Gazette
@DavidHowardKing

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Democrats Frustrated by Governor Backing Off Party's Issues Thu, 26 Mar 2015 14:41:50 +0000