Gotham Gazette https://www.gothamgazette.com/component/tags/tag/535 Tue, 14 Jul 2020 23:59:29 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) No to Austerity, Yes to Efficiency and Fairness: Getting Our Budget Priorities Straight for a Strong Post-COVID New York https://www.gothamgazette.com/130-opinion/9415-no-austerity-budget-priorities-strong-post-covid-new-york-coronavirus https://www.gothamgazette.com/130-opinion/9415-no-austerity-budget-priorities-strong-post-covid-new-york-coronavirus exec bud 18

Major budget questions loom as coronavirus takes its toll (photo: Edwin J. Torres/ Mayor's Office)


As we work to show COVID the door, tough budget decisions are ahead. Governments at every level are grappling with the unprecedented toll this pandemic has had on the economy. 

COVID has laid bare structural inequities too stark to ignore. While some work comfortably from home, others put themselves in danger on the front lines. While some flee to the Hamptons, others pass the virus between family members in cramped New York City apartments.

These choices become even more stark when we take a cold, hard look at post-coronavirus state and municipal budgets. New York State is facing a $10-$15 billion budget deficit. New York City projects a $7.4 billion loss in tax revenue. 

Where should we go to fill the budget gaps? 

Our executives have given us hints of what they want to do. We are told that painful cuts are necessary, that sacrifices must be made.

Mayor de Blasio already took a scythe to just about every program with the prefix summer including the Summer Youth Employment Program, a program that provides summer jobs for at-risk teenagers. He has also cut services that affect our daily lives, like trash pickup days and electronics recycling.

Governor Cuomo pushed to cut health-care funding in this year’s budget, even as our public hospitals struggle to treat an influx of coronavirus patients, and we’re told to wait with baited breath for more cuts to come.

The mayor continually refuses to lessen property tax burdens on low- and middle-class homeowners and renters, many of whom are bearing the brunt of COVID’s pain, while the governor has refused to consider revenue raisers on ultra-millionaires, billionaires, and large corporations, many of whom are left unaffected by the virus’ scourge.

We believe these are misguided decisions. We reject the choice between austerity budgeting and a tax burden shouldered by low- and middle-income New Yorkers.

Instead, we need an honest assessment of how we can raise revenues by looking to those who can afford to pay their fair share.

The very wealthiest New Yorkers will not face eviction or foreclosure, like so many other New Yorkers. They will not struggle to access unemployment benefits. They will wait out the storm in second homes.

As a matter of basic fairness, these individuals less impacted by COVID can and should contribute more.

We should also look at corporations that have profited specifically because of this pandemic. These large corporations can and should pay more to rebuild our economy when this is all over.

Passing austerity budgets that cut essential services will only doubly punish our frontline workers and those struggling to make ends meet during and after this pandemic. After all, our essential workers — EMS, police, firefighters, Parks Department employees, grocery store workers, transit workers, nurses, doctors, and so many others — are about 40% people of color; 75% of whom live in the so-called outer boroughs. One-third of our frontline workers are from low-income households.

An austerity approach will inevitably push our city deeper into recession and make it even harder to dig out of this financial hole.

In addition to revenue raisers on those who can afford it, we need substantial federal funds and can borrow up to 20% of the budget from the Federal Reserve’s COVID-19 emergency lending program.

Finally, we also must take a hard look at the waste in our budgets. The New York City budget has ballooned by $20 billion in the last six years alone. The state budget is certainly not immune to wasteful spending either. 

Instead of making cuts to hospitals, CUNY, and summer employment, we need to look at the programs with unproven impact, the spending that doesn’t go directly into communities.

For example, procurement contracts make up nearly 40% of the city budget’s recent growth. These contracts should be reviewed and scrapped or renegotiated as necessary. In 2018, the Independent Budget Office suggested that simply switching to open source software could save the city $30 million per year.

For every wasteful or unproven program we know about, there may be many more that we haven’t yet identified, in part for lack of looking close enough. These budgets need to be scrutinized and every revenue-raising option must be explored before we cut a single dollar to any program that working-class New Yorkers rely on. 

This pandemic has put us through the wringer in the most brutal way. All of us are reflecting on what kind of society we want to be when we emerge from this dark time. 

Our post-COVID government budgets will demonstrate our values. We stand for a New York City and State that cares for its people and lifts up those who need it most.

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State Senator Andrew Gounardes and City Council Member Justin Brannan represent parts of Brooklyn. On Twitter @agounardes & @JustinBrannan.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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No to Austerity, Yes to Efficiency and Fairness: Getting Our Budget Priorities Straight for a Strong Post-COVID New York Thu, 21 May 2020 04:00:00 +0000
Letter to the Editor: Raising Revenue for Medicaid and More https://www.gothamgazette.com/130-opinion/9101-letter-to-the-editor-raising-revenue-for-medicaid-and-more https://www.gothamgazette.com/130-opinion/9101-letter-to-the-editor-raising-revenue-for-medicaid-and-more mid hudson valley

(photo: Governor's Office)


To The Editor,

I read with interest Gerald Benjamin's op-ed, Minding the Medicaid Gap, published on January 24, 2020. It's an excellent deep dive into the funding and administration of Medicaid at the state and local level.

I disagree, however, that raising taxes is necessarily unpalatable. Experts have identified ways to raise $40 billion in revenue, per year, by taxing New York's wealthiest individuals and corporations. Here's what we can tax, all without hurting Medicaid recipients, low- and middle-income families, and local governments:

-Second homes worth over $5 million
-Vacant luxury homes and commercial properties
-Annual Income over $5 million with additional tax brackets
-Carried interests (so hedge fund managers can't duck income taxes)
-Stock transactions
-Stock buybacks
-Companies that overcompensate CEOs
-Foreign companies that benefit from Trump tax breaks

Unlike a regressive sales tax, these revenue-raisers would only tax big corporations and the ultra-wealthy. This is how we can meet our state's needs for healthcare, housing, education, transportation, and climate justice. All we need is political courage on the part of Governor Cuomo and the New York State Legislature.

For readers who would like to learn more, nybudgetjustice.com, strongeconomyforall.org, and fiscalpolicy.org all offer information about these revenue-raising options.

Sincerely,

Carolyn Kelly
Manhattan

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Letter to the Editor: Raising Revenue for Medicaid and More Mon, 03 Feb 2020 05:00:00 +0000
What's The [DATA] Point? $81.3 billion, with New York Tax Commissioner Michael Schmidt https://www.gothamgazette.com/state/8875-whats-the-data-point-813-billion-tax-finance-commissioner-michael-schmidt https://www.gothamgazette.com/state/8875-whats-the-data-point-813-billion-tax-finance-commissioner-michael-schmidt whats the data point


What's The [Data] Point? Episode 83 -- $81.3 billion, with New York State Department of Taxation and Finance Commissioner Michael Schmidt [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

michael schmidt dataAppointed to be the new Commissioner of the New York State Department of Taxation and Finance by Governor Cuomo earlier this year, Mike Schmidt joined the podcast to discuss the work of his department, his priorities for improving how effectively it collects tens of billions of dollars in taxes and the customer experience with government, and more.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

Read more by this writer.

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What's The [DATA] Point? $81.3 billion, with New York Tax Commissioner Michael Schmidt Thu, 24 Oct 2019 04:00:00 +0000
After Major Tax Revenue Drop, a ‘Positive Note’ & Much Uncertainty for State Fiscal Picture https://www.gothamgazette.com/state/8457-after-major-tax-revenue-drop-a-positive-note-much-uncertainty-for-state-fiscal-picture https://www.gothamgazette.com/state/8457-after-major-tax-revenue-drop-a-positive-note-much-uncertainty-for-state-fiscal-picture govandcuomo albany

Budget Director Mujica, Gov. Cuomo, Comptroller DiNapoli (photo: governor's office)


New York’s tax revenue fell by $3.7 billion, a 4.7% decline, in the 2019 fiscal year that ended March 31, according to the cash report released Friday by State Comptroller Tom DiNapoli. A drop was expected in projections made last year, but not to the degree it occured, setting off alarm bells earlier this year as the state started to see apparent effects of New York taxpayer behavior resulting from the new federal tax code. The state's latest projections from February did, however, more accurately account for the decrease in revenue as the fiscal year came to an end.

The drop in revenue largely stemmed from lower personal income tax receipts, though the comptroller said the year ended on “a positive note” because revenues came in higher than expected in March. Part of the decline was also related to the MTA payroll tax, which brought in $1.4 billion last year, being shifted out of the budget as a revenue source, and the new federal tax law led to many filers and employers moving their payments to the 2018 fiscal year, creating the appearance of a  drop in payments that doesn't reflect the larger economy, according to the state Division of Budget. But fiscal watchdogs are nonetheless concerned that the state could quickly face a cash crunch if revenue is lower than expected in April, the month that not only starts the new state fiscal year but is also home to the tax filing deadline.

The drop in personal income tax was first evident in data from December and January, raising a red flag for the state economy and creating uncertainty about future spending as Governor Andrew Cuomo and the state Legislature negotiated the budget for the 2020 fiscal year. In a February news conference called to discuss the startling numbers, Cuomo and DiNapoli pointed to the 2017 federal tax overhaul as the culprit, chiefly a provision that capped the deductibility of State and Local Taxes (SALT) at $10,000 and how New Yorkers may be responding to it. They said much more would become clear in the following months.

The governor and Legislature had to take that uncertainty into consideration when making revenue projections for the new fiscal year and that if those projections are significantly off they may need to restructure the state budget. 

The comptroller’s latest report noted that personal income tax revenue by the end of the fiscal year declined by $3.4 billion in total, or about 6.6% from the previous year, though other forms of tax revenue increased, including consumption tax, business tax, and miscellaneous revenue that included massive monetary settlements with financial and other corporations. March was a good month, with taxes coming in about $812 million higher than the state Division of Budget had projected in February.

“After months of concern over lower-than-expected tax collections, the state ended the fiscal year on a positive note,” DiNapoli said in a Friday statement. “The sharp revenue declines in December and January, however, remind us to take nothing for granted. With expectations of a slowing economy and ongoing concerns regarding federal fiscal policies, a strong commitment to building robust reserves in preparation for the next economic slump is essential.”

After a recent allocation of $250 million, the state’s current rainy day reserves stand at $2 billion, and are expected to increase to $2.5 billion by the end of the 2020 fiscal year. This sum pales in comparison to the recently-adopted $175.5 billion state budget for the fiscal year 2020.

The crucial period lies ahead as the state begins to take stock of tax returns that New Yorkers file in April. In February, the governor and state DOB projected that April would show an additional $1.4 billion in personal income taxes, and total collections of about $8.2 billion. In comparison, the state averaged between $5 and $7 billion in April tax revenues between 2016-2018. It’s not totally clear why the projection is so optimistic.

“When they made that adjustment in February, they said, we came in really low for January, but some of that money we think is gonna come in in April. And we don’t know if it’s going to or not,” said Dave Friedfel, director of state studies at Citizens Budget Commission, a nonprofit watchdog. “If it doesn’t, if they made a mistake in making that assumption, then suddenly the fiscal year 2020 budget could be in trouble only one month into the fiscal year.”

Should revenues come in below projections, the state could be in for tough times ahead.

“Depending on how that number comes in, if it’s significantly short, the state may need to tighten its belt a little bit further,” Friedfel said, noting that at minimum it would put a damper on conversations around increasing capital spending as the rest of the legislative session progresses. Cuomo and legislative leaders passed the new state budget without adding new capital expenditure plans, though many were carried over from prior plans.

E.J. McMahon, research director of the Empire Center for Public Policy, a think tank, agreed that if the April revenue doesn’t meet expectations, it would be “a sign of trouble.”

“However, even if it’s above the forecast, it’s not necessarily solid proof that things are much better because...the real number to watch this year, that has a bigger reflection of the economy, will be the quarterly estimated payments in June and especially September,” he said, pointing out that higher-earning New Yorkers have more complicated tax returns and may be filing for extensions.

The new budget does give the state Department of Budget, which is under the governor, the ability to make mid-year changes to spending in case of a $500 million deficit below projections, in which case the Legislature would have 30 days to respond or the DOB adjustment would take effect.

But a bigger issue is the state’s paltry reserves. CBC’s Friedfel said the state should at bare minimum have 10% of the operating budget in reserves, closer to about $10 billion. “That would be enough to really absorb the shock for one year and even more than that would be beneficial,” he said.

“The state has gotten about $12 billion in monetary settlements over the last six or seven years, certainly during the governor’s tenure, and they’ve put very little of that into reserves,” Friedfel continued. “They’ve actually used some of that for operations which sets up kind of a higher base of spending, which makes it harder to fill those gaps in the future.”

***
by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note - This article has been updated to clarify that the state Division of Budget's latest projections did expect revenues to drop as much they did though they did not originally. Additional context was also added about the MTA payroll tax and early filing of payments in the 2018 fiscal year.  

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After Major Tax Revenue Drop, a ‘Positive Note’ & Much Uncertainty for State Fiscal Picture Sun, 21 Apr 2019 04:00:00 +0000
Federal Tax Reform is Shaking Up New York’s Finances But Flow of Bank Settlement Money is Bailing Out the State Budget https://www.gothamgazette.com/130-opinion/8444-federal-tax-reform-shaking-up-new-york-bank-settlement-bailing-out-state-budget https://www.gothamgazette.com/130-opinion/8444-federal-tax-reform-shaking-up-new-york-bank-settlement-bailing-out-state-budget cuomo salt weather

(photo: governor's office)


The federal tax law overhaul enacted at the end of 2017 capped state and local income and property tax deductions on federal income tax returns at $10,000, damaging millions of New Yorkers’(and tens of millions of other Americans’) ability to itemize deductions on their federal tax returns. The change also resulted in sudden shifts in New Yorkers’ behavior toward their own New York tax payments. Over the past two budget cycles the changes have destabilized New York State’s tax revenue collection patterns and caused considerable uncertainty in the state’s budget and funding for the services New Yorkers rely upon.

A recent report by Moody’s Investors Service indicates the fears of Governor Cuomo and other New York leaders that the federal tax deductions cap will cause New Yorkers to flee the State may be exaggerated. But that report only reviewed New York outmigration patterns through 2017 -- this analysis focuses on immediate changes in New Yorkers’ behavior as New York taxpayers and how those changes have affected the past two budgets and the one just adopted. How many New Yorkers will leave the state remains unknown.

In December 2017, following Congress and Trump’s tax reform, the state government experienced a sudden spike in tax payments as New Yorkers chose to make tax payments in 2017 rather than 2018 so they could still deduct in excess of $10,000 in New York taxes from their federal returns, and avoid, at least briefly, the coming limits on deductions to the extent that they could.

According to a 2018 State Comptroller report, the State Division of the Budget estimated that $1.9 billion came into the New York treasury that represented an acceleration of 2018 tax payments into 2017 to take final advantage of full state and local tax (SALT) deductibility. As a result, New York’s tax revenue rose more than 6% in 2017-18 over 2016-17. But, of course, it was anticipated that these 2017 payments would affect 2018 payments and that tax collections would correspondingly fall in 2018. At the time of budget adoption in 2018, the state predicted tax revenue would fall 2% in 2018.

In December 2018 and January 2019, however, tax collections fell precipitously, resulting in a $3 billion drop below estimates made at the time of the April 2018 budget enactment, for a total drop of $ 4.4 billion, or 6.4% below the 2017-2018 budget, not 2%.

Many wealthier taxpayers, with large incomes from capital gains, pay significant portions of their New York State taxes in quarterly estimated payments, including a regular January quarterly payment, rather than in withholding taxes, which are usually related to wages and salaries. Before the federal tax overhaul, New York taxpayers had an incentive to make their January estimated payment in December to assure they could take their tax deductions for that year on their next federal return. But with itemization nearly wiped out, the incentive to make the estimated tax quarterly payment early disappeared. The loss of this incentive is believed to be the main factor in the dramatic revenue declines this past December and January.

The State Division of the Budget believes that some of the money might be recouped in estimated payments in the first quarter of this year following January, but since the state adopted its budget for the April 1 start of the fiscal year, there was no way to know yet how much of the money might be recouped. So the governor and the Legislature chose caution and limited spending increases this year.

New York is not going broke, and the economy and tax revenue are still anticipated to grow, but the shock from the billions in lower revenue informed a cautious approach. The 2018 stock market decline also affected New York’s tax revenue from capital gains. For the first time in many years the governor and the Legislature added to the rainy-day reserve funds rather than add a lot of new spending.

Shoring up the state’s financial situation has been an extraordinarily fortunate additional development over the past few years. Litigation against the financial industry for wrongdoing that occurred during the Great Recession has resulted in many banks and financial companies agreeing to settle lawsuits for fraud and other problems with New York State for almost $12 billion(!) since 2015. New York spent much of the first of these settlement dollars on economic development to help the stagnant economy in Upstate New York , but in 2017 and 2018 $2 billion more has come in from new financial settlements, and the state has simply used the money to bail out the state budget and fund the MTA.

In the 2018 fiscal year the state put $461 million from over $800 million in new settlement funds that year into the state budget, and set aside $155 million to cover future labor contract increases. In the adopted fiscal year 2019 budget (for the fiscal year beginning April 1, 2018), the state put another $383 million from financial settlement into the budget, and took $194 million of additional settlement funds to help pay for the one-time 2018 cost of the MTA Subway Action Plan (2019 and beyond was covered from a tax).

But as 2018 progressed, an extra $1.2 billion more in financial settlement funds came into the state treasury that had not been booked by the state in the April budget adoption! In the budget just adopted a week ago, Governor Cuomo and the Legislature took $336 million of the new money to cover the early 2019 winter shortfalls related to apparent taxpayer behavior changes, and have set aside more than $600 million from the financial settlement funds in reserves to reduce future risks in the case of economic downturn, federal cutbacks, or other problems.

The combination of rainy-day funds and financial settlement reserves now totals $5 billion for the 2019-2020 fiscal year, which began April 1 and has a total state budget of $175.5 billion.

In an important revenue action, the state again renewed the higher rate for taxpayers with incomes over $2.2 million at 8.82%, yielding $770 million this year and an extra $4 billion next year, for five full years.

School aid was increased 3.7% (New York City got 3.4% more). The Legislature restored $550 million for the Medicaid program that the governor tried to cut after the shortfalls appeared.

The minimum wage increase that took place on December 31 to $15 per hour for New York City necessitated $700 million in additional Medicaid spending to cover the cost of raising the pay of workers in hospitals, nursing homes, and home care agencies who made less than $15 an hour in the city, as well as somewhat lower raises outside the city.

The state anticipates tax revenue will recover from the decline this past December and January, although overall it will be lower than had been hoped last year.

The challenges to fund the MTA will continue, since the tax and fee increases to assure $25 billion for its 2020-24 Capital Plan don’t approach the $40 billion estimated to be needed for that plan or the $7 billion for the current 2-15-2019 plan that remains unfunded. But don’t expect more tax increases for the MTA in an election year in 2020.

***
Jim Brennan was a member of the New York State Assembly for 32 years, where he chaired four committees. On Twitter @JimBrennanNY.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Federal Tax Reform is Shaking Up New York’s Finances But Flow of Bank Settlement Money is Bailing Out the State Budget Thu, 11 Apr 2019 04:00:00 +0000
Report Undercuts Cuomo and DiNapoli Claims of Outmigration Because of Federal Tax Law https://www.gothamgazette.com/state/8440-report-undercuts-cuomo-and-dinapoli-claims-of-outmigration-because-of-federal-tax-law https://www.gothamgazette.com/state/8440-report-undercuts-cuomo-and-dinapoli-claims-of-outmigration-because-of-federal-tax-law governor and cuomo salt rev

Gov. Cuomo, middle, and Comptroller DiNapoli, right (photo: Governor's office)


In the last few months, Governor Andrew Cuomo and State Comptroller Tom DiNapoli have raised red flags about the impact of the 2017 federal tax overhaul ushered through by President Trump and Republicans in Congress. Chiefly, they said that a new $10,000 cap on the State and Local Tax (SALT) deduction has led to a massive drop in revenue and is likely being accompanied by increased outmigration of high-earning New Yorkers to states with lower taxes.

But Cuomo and DiNapoli never provided concrete proof of the alleged trend and a new report undercuts their claim, to an extent, showing that New Yorkers have not been leaving the state because of the SALT cap but rather as part of continuing demographic trends and shifts in job markets.

Moody’s Investors Service, a leading ratings agency, released a report on Monday that said there are “no discernible signs” that the change in the SALT deduction is leading to people moving out of high-tax states, and notes that the impact of the new cap “will be felt widely for the first time this tax season and possibly spur some out-migration, but jobs and demographic trends will continue to influence relocation patterns more than tax burdens.”

The initial findings, based on 2017 data, fly in the face of the governor’s more definitive claims that the federal tax reforms -- which largely benefited corporations and wealthy individuals -- were leading to outmigration from high-tax Democratic states like New York, Connecticut, and New Jersey, where high-income earners make up a large part of the revenue base.

“We hope Moody’s is right, but with the first filing deadline post-SALT still upcoming, we are in the first inning of a long game,” said Freeman Klopott, a spokesperson for the state Division of the Budget, which is under Cuomo. “By the federal government’s own calculation, the cap on SALT is a more than $600 billion tax hike that will be borne overwhelmingly by New York and similarly situated states, making it an attack on the work we have done to strengthen New York State’ economy with a 2 percent limit on annual State spending growth, a cap on local property taxes, and a tax cut for every New Yorker.”

Brian Butry, a spokesperson for DiNapoli, said in an email, “As New Yorkers finalize their taxes, some are learning for the first time the impact of the SALT cap. The jury remains out on what the long-term effect will be.”

At a February 4 news conference, Cuomo and DiNapoli made a dire announcement that personal income taxes had come in $2.3 billion lower in December and January than the prior year, warning that even a small amount of outmigration of high-income residents would have a significant impact on state revenue. The SALT cap, they said, cost the state $14.3 billion in total.  

“SALT encourages high-income New Yorkers to move to other states,” Cuomo said, using his typical and misleading shorthand of “SALT” to mean the new cap on SALT deductions (the governor also regularly says that SALT was ended, when it has been capped). “And what you have to remember is even if a small number of high-income taxpayers leave, it has a dramatic effect on this tax space.”

He continued, “Taxpayers are adjusting in response to SALT....We have been hearing all along from the major accounting firms, to major individuals, that this is going to be the tipping point and that people now will be making a decision to make a geographic location change. And the SALT provision, remember, did not go into effect yesterday. It had over one year to adjust, so you didn't have to move on 24 hours' notice. You had one year to start to plan a move. And it goes into effect this April, so if you had to move or decided to move, now is the time that you would do it.”

DiNapoli was less forceful in making that argument that day. “We certainly have all heard anecdotally, as the Governor pointed out, people who say they're going to change their legal address, and I think these numbers show that in fact that is probably a big part of the picture,” he said, while acknowledging that several other factors, including volatility in the financial markets were to blame for the recent revenue decrease.

In a March 13 interview on WBAI radio with Gotham Gazette’s Ben Max and City Limits’ Jarrett Murphy, DiNapoli continued that line of reasoning while maintaining that he would need to examine months of data from the Department of Taxation and Finance before coming to a firm conclusion. “I do think that is a piece and probably a very significant piece, of what’s happening,” he said of the alleged SALT cap impact on taxpayer behavior and state revenue. “We’re gonna need more months of data....My instinct tells me the governor was on the right track, that the biggest piece of the shortfall was the response to the adjustment in federal tax reform.”

[LISTEN: Max & Murphy Podcast: Comptroller Tom DiNapoli (March 2019)]

The Moody’s report, however, points out using Census Bureau data that migration rates between 2012 and 2017 in the five states where “the SALT deduction represents the largest share of total federal adjusted gross income” -- California, Connecticut, Maryland, New Jersey and New York -- “are below pre-recession levels and generally follow the US as a whole.” The report notes that it is too early to gauge if the federal tax law has affected migration, contrary to what Cuomo and, to a lesser degree, DiNapoli have said. The report also said that people are generally moving from one high-tax state to another.

“In 2017, 25%-30% of people who moved out of New York, Connecticut and New Jersey moved to another one of the five high-tax states,” the report reads. “The most popular destination for people moving out of New Jersey and Connecticut was New York.”

The report does confirm long-running concerns from Cuomo and others about migration of New Yorkers to Florida, a state with far lower taxes. Moody’s noted that 14% of people who moved out of New York in 2017 went to the Sunshine State. But, those who moved were not primarily driven by lower taxes but rather by job opportunities, climate, and housing costs, the report said. The trend of New Yorkers moving to Florida is nothing new, however. Overall, New Yorkers have consistently been leaving the state since at least 1961, according to the Empire Center, a think tank, and the state saw a net loss of more than 1 million people between 2010 and July 2017.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

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Report Undercuts Cuomo and DiNapoli Claims of Outmigration Because of Federal Tax Law Tue, 09 Apr 2019 04:00:00 +0000
Cuomo's Budget Priority Balancing Act https://www.gothamgazette.com/state/8397-cuomo-s-balancing-act-on-budget-priorities-congestion-pricing https://www.gothamgazette.com/state/8397-cuomo-s-balancing-act-on-budget-priorities-congestion-pricing gov cuomo long island no tax

Gov. Cuomo on Long Island (photo: governor's office)


Before Democrats reclaimed the state Senate last year, Governor Andrew Cuomo spent years triangulating with the Democratic-controlled Assembly, two factions of Senate Democrats, and the Republican Senate majority. The arrangement allowed him a heavy hand over the legislative and budget agendas in Albany and gave him the ability to claim credit and deflect blame as he saw fit (though critics didn’t always buy his explanations). Progressive legislation regularly withered on the vine unless it had Cuomo’s imprimatur, usually accompanied by some form of mutually beneficial compromise with rogue Democrats and Republicans.

If this year’s budget negotiations have proved anything it’s that old habits die hard and Cuomo is unwilling to ease his stranglehold on state government, even when dealing with members of his own party. He’s continued to strongly, and perhaps shrewdly, set the foundation for negotiations. But some of the policies he has prioritized have long been wedge issues between lawmakers representing New York City on the one hand and upstate and suburban districts on the other.

On a few of the governor’s topline agenda items -- congestion pricing, recreational marijuana legalization, criminal justice reforms, and a property tax cap -- that divide has seemed most apparent this year, at times apparently stoked by Cuomo himself, and the governor has sought to leverage the budget deadline to push for their passage. Notably, he has said he’s willing to allow a late budget to accomplish his goals, which would mean that legislators could lose out on pay raises that are contingent on the budget passing on time, giving the governor additional leverage over the process.

While Cuomo has said he finds himself “liberated” by full Democratic control of the state Legislature and the ability to pass legislation that stalled for years, he’s also been overtly antagonistic to his colleagues in the Legislature, particularly in the state Senate, for what he says is them failing to grasp the necessities of governing, sabotaging the deal to bring an Amazon campus to Queens, and hesitating to follow through on several policies that Republicans opposed for years.

Senate Majority Leader Andrea Stewart-Cousins half-jokingly attributed it to “Senate Democratic derangement syndrome,” but many Democratic legislators have been taken aback by Cuomo’s approach, even if most have not been surprised. After an initial sprint of legislative activity that smacked of Democratic bonhomie, the Legislature slowed down as fault lines and a less rosy picture emerged amid negotiations over complex topics and some apparent backtracking.

With news articles and political commentary pointing to the close bond between Heastie and Stewart-Cousins, and the power of the all-Democratic Legislature vis-a-vis the governor, Cuomo appeared to seek to increase his leverage, by having certain Democratic candidates sign policy pledges during last year’s campaign, setting out his “first 100 days” agenda in December, casting blame on Long Island Democrats for not doing enough to keep the Amazon deal on track, and more.

Of late, he’s focused his top priorities on issues that alternately appeal more to New York City Democrats (congestion pricing, criminal justice reform) and suburban Democrats (property tax cap). He’s rallied on Long Island and in the Hudson Valley with Democratic senators, declaring he would not approve a state budget without the annual tax cap made permanent, even though, as Heastie has said, the current cap doesn’t even expire until next year. Meanwhile, he’s publicly told those same Democratic senators, who may be hesitant about criminal justice reform, to pass it in the budget and “blame me.”

It may all, or mostly, work out for Cuomo by the April 1 budget deadline, a major test for all the parties involved, but certainly an opportunity for Cuomo to both deliver on progressive promises and still show he’s in charge.

“This isn't a game of risk, this is real life,” said Rich Azzopardi, senior advisor to Cuomo, of the budget process in a statement responding to Gotham Gazette’s inquiry about the governor’s budget negotiation tactics and whether they were intended to divide Democrats as some have suggested. “If you excuse us, we're going to concentrate on developing a budget that works for all New Yorkers and I believe our partners in the legislature are doing the same.”

“I think for the governor, his decisions about priorities in the state budget are about how can he get things done that he can brag about later and that continue to advance the narrative that he wants,” said Evan Thies, co-founder of Pythia, a political strategy firm, “which is that he is still very much the most powerful person in the state and also on a national level a Democrat that can get things done and who seems to have moved his state to the left.”

Overwhelmingly reelected for a third term in November, Cuomo was emboldened and quick to show how he would approach the newly elected Senate Democratic majority. He rallied with newly elected and returning members of the state Senate on Long Island shortly after the election, pledging to ensure that New York City pays its “fair share” of funding for the Metropolitan Transportation Authority (MTA) even as legislators within the city were hammering him for starving the agency of funding, meddling with its affairs, and letting the city’s subways slide into chaos.

Cuomo pitched congestion pricing as the chief remedy to MTA problems, insisting it must be done in the budget but offering few details of how it would be implemented. For lawmakers in suburban areas outside New York City and even for those in the outer boroughs, it proved divisive and it appears that any proposal that will be included in the budget will include several key carve-outs and funding set asides for the Long Island Rail Road and the Metro North Railroad. The governor has also called for making it state law that the city and state must split 50-50 any MTA capital plan shortfall not covered by dedicating funding streams like that from congestion pricing.

Cuomo has also launched a campaign to make the state’s 2 percent cap on annual property tax increases permanent, which is currently in place everywhere outside New York City. The cap has been a crowning Cuomo achievement, winning praise from members of both political parties, and renewed multiple times. He’s rallied on Long Island three times in two weeks to push for it and has said he will not sign a spending plan without it, even saying that he’s willing to let the budget be late.

Even the governor’s proposal to legalize recreational marijuana seemed destined to create divisions along regional lines. It gave counties the ability to opt out of allowing sales, and several county executives -- including both on Long Island -- have already expressed intent to do so (something Cuomo said was not helpful in getting legalization passed in Albany). Meanwhile in New York City, which accounts for about a third of all regular marijuana users in the state and would make up an overwhelming part of any legal market, Mayor Bill de Blasio has already taken steps to reduce enforcement and has embraced legalization.

There are several key aspects of legalization to work out, and It’s hardly a surprise that the governor said last week it appeared unlikely legalization would be in the budget, even though he was hoping to tap the revenue from it to fund the MTA. But even Cuomo’s characterization of negotiations was disputed by lawmakers, such as Senator Liz Krueger, lead sponsor of legalization legislation, who said the parties aren’t that far apart. (Cuomo shifted to embracing a pied-a-terre tax for New York City luxury apartments that would replace marijuana funding for the MTA, though that has also hit some roadblocks.)

“You’ll notice a trend in the things that are actually getting done in the budget, which is that suburban Democrats agree with all of them,” Thies said. “They are clearly the new pivotal block in Albany and that is well represented” in the marijuana bill’s opt-out provision, the fact that congestion pricing will pay for commuter railroads and that issues like the tax cap “which may not have universal support within the Democratic caucus, are still being advanced aggressively.”

Criminal justice reform, including banning cash bail and instituting speedy trial and open discovery reform, may be one of the governor’s remaining priorities that does not necessarily have a substantial budget impact. But Cuomo has nonetheless insisted it must pass with the budget -- citing it as an important decision deadline -- despite various concerns being raised by district attorneys and lawmakers from more conservative districts outside the city, and by more progressive lawmakers and advocate who have certain prerequisites for new pretrial incarercation rules.

“I've had 7 years, 8 years with a Republican Senate with half a loaf, half a loaf, half a loaf—and getting these controversial issues and having to compromise everything,” he said in a Monday interview on WAMC radio with host Alan Chartock. “So having a Democratic Senate is most liberating for me because I don't have to take half a loaf and criminal justice is one of those issues.”

On issues like marijuana legalization and the broader criminal justice reform package, Heastie and Stewart-Cousins have not said anything is off the table; rather, they have indicated that both can be successfully approved after the budget and need not be rushed through by April 1. But the budget is where the governor enjoys maximum leverage and he has said that lawmakers can assign him the blame for passing controversial bills because there is no guarantee they will follow through in the post-budget session.

“I'll take the blame,” he said at a March 11 news conference, when asked about the criminal justice reform package and whether it would lead to a backlash for suburban legislators. “When it's in the budget, it allows everybody to say, ‘It wasn't me, it was the governor.’ Let's be honest, right? That's what the budget allows you to do. They all go and they say, ‘Yeah, I didn't support that, but the governor insisted on it.’ And by the way, it will be true. It will be true. Blame me.”

Dr. Jeanne Zaino, professor of political science at Iona College, described the governor’s strategy as “a masterclass in terms of managing Albany,” which she said has practically become a “one-party city” with Republicans out of power. “It’s brand new territory for [Cuomo], having the Democrats in control and in the past, he was able to triangulate with Republicans,” she said. “In my mind, he’s trying to do a similar sort of dance, if you will, but in this way playing the suburban, upstate Democrats off the more urban downstate on a variety of issues...I think congestion pricing in my mind and the property tax cap are two of the biggest [issues] because they so glaringly pit the two against each other.”

For advocates who have seen the type of horse-trading typified by the state budget process, the governor’s push has raised some concerns. Nick Malinowski of VOCAL-NY noted that legislators from the Hudson Valley and Long Island haven’t been supportive of criminal justice reforms, for instance. “We are very concerned as this moves into budget negotiations that issues like bail, like discovery reform, will be negotiated against other issues like property taxes and pay raises and all these other things,” he said. “That is definitely something we’ve seen in the past with Republicans, Democrats, and Cuomo...From a democracy standpoint, it’s a bad way of doing government.”

Nick Sifuentes, executive director of the Tri-State Transportation Campaign, however, disagreed that the governor’s efforts have been divisive, and credited him for bringing together a “fractious conference” on congestion pricing at least. “It’s the single largest and difficult thing they’ve taken up this year,” he said. “I really feel like the governor has actually generally played a helpful role in trying to get this thing to the finish line….I don’t think this has been a year that the governor has very aggressively played sides off against each other to try and win something.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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Cuomo's Budget Priority Balancing Act Wed, 27 Mar 2019 04:00:00 +0000
State Leaders Must Follow Through on Their Promise of a More Fair New York https://www.gothamgazette.com/130-opinion/8390-state-leaders-must-follow-through-on-their-promise-of-a-more-fair-new-york https://www.gothamgazette.com/130-opinion/8390-state-leaders-must-follow-through-on-their-promise-of-a-more-fair-new-york got ga si gov

(photo: Governor's office)


As we near the final days of state budget negotiations, a familiar anxiety is growing as advocacy groups and everyday New Yorkers await the fate of critical policy and funding decisions.

Despite a fast start to the legislative session and optimism abounding from a Democratic trifecta that seemed focused and committed to delivering on campaign promises, the realities of the same-old behind-closed-doors budget process are setting in ahead of the April 1 deadline.

For far too long, the state budget has contributed to growing inequality and deteriorating services across the state. While state budgets tread water or move us backwards, the continuing “strength” of the economy has further tipped to the wealthiest among us.

The recently re-elected Governor and newly-elected members of the Assembly and the Senate ran on the promise to chart a new course.

Make no mistake: It is THAT vision of a fairer, cleaner, kinder, and more equitable New York that helped take down the Independent Democratic Conference, strengthen the Democratic majority in the Assembly, and elect 39 Democratic Senators for a new majority that voted to put Senator Andrea Stewart-Cousins into her rightful place as the leader of the Senate.

Grassroots organizations like ours, Empire State Indivisible, have spent the first three months of 2019 in the streets organizing in support of that vision. But strangely it’s now many of these same elected officials who are pushing back against the fight for fairness and democracy.

Exhibit A: the continued resistance from many members of the Assembly to finally pass through both houses legislation for publicly-funded elections.

For years, the Assembly championed this issue: 88 current members are on the record for past support. Yet, now that there’s a viable path to passage, many of those former champions now claim there are too many open questions.

Grassroots organizers across the state have reported consistent questioning from many of their electeds like “how would the program be implemented?”, “what would be the model of oversight?”, and “where would the funds come from?”  

It turns out these reasonable questions already have incredibly thoughtful and effective answers. Organizations like Citizen Action and the Brennan Center for Justice have been bending over backwards to work with the conferences in the Senate and the Assembly to answer the questions and make the legislation as effective as possible. It’s disingenuous to claim that last-minute questions are the reason support for the measure is lacking.  

The fact is that our elected officials are sent to Albany to solve complicated problems with conviction.

They are the ones responsible to design policies that solve the challenges New York faces.  The irony of elected officials refusing to participate in the process of crafting the details of policy they claim to support is lost on no one.

Exhibit B: skittishness among many lawmakers on establishing fair tax and fiscal policies.

Governor Cuomo’s budget proposals consistently create a battle for funds amongst the most critical services. His penchant for “horse trading” (as many insiders refer to it) pits public school funding against healthcare spending, support of clean energy and municipal infrastructure projects against investments in affordable housing, and so on and so on.

We and many other New Yorkers have been asking legislators about increasing revenue through new fair-share tax proposals like the “ultra millionaires tax,” which extends the current millionaires tax and adds brackets for people whose annual income exceeds $5million, $10 million, and $100 million.  

Too often, the answers have been truly dismissive and patronizing -- particularly from the new Senate majority and the Governor. The pushback is a status-quo run-around: lawmakers fear that raising taxes -- even on multimillionaires and billionaires who got huge new tax breaks from President Trump --  might cause them to lose elections in 2020.

The numbers and the polling suggests otherwise.

Insisting that the ultra-rich pay their fair share of a burden that has for too long been shouldered by the poor, the middle class, and the upper middle class will in fact be answering to the will of the people. It will allow all the members of the Democratic majorities in both the Assembly and the Senate and the Governor to deliver on the promises that galvanized voters to elect such a strong slate of Democrats in the first place -- and will inspire us to do so again.

The ask is simple: No more excuses. We simply can’t afford them.

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Ricky Silver is co-lead organizer of Empire State Indivisible. On Twitter @es_indivisible.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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State Leaders Must Follow Through on Their Promise of a More Fair New York Mon, 25 Mar 2019 04:00:00 +0000
Pied-à-Terre Tax Should Be Just The Start https://www.gothamgazette.com/130-opinion/8353-pied-a-terre-tax-should-be-just-the-start https://www.gothamgazette.com/130-opinion/8353-pied-a-terre-tax-should-be-just-the-start adaptny mayors

(image: mayor's office)


Governor Andrew Cuomo, Senate Leader Andrea Stewart-Cousins, and Assembly Speaker Carl Heastie have all signaled their support for funding the long overdue MTA overhaul with a pied-à-terre tax. Cuomo has said it’s the “only agreed-to new money” for the upcoming state budget. But the challenges facing struggling families in New York demand more than just a pied-à-terre tax. We need an entire reimagining of New York’s upside-down tax system.

There are over 75,000 apartments in New York City owned by people who don’t live there year-round. Some of these are second, third, or fourth homes. Earlier this year billionaire hedge-funder Ken Griffin made headlines for purchasing the most expensive home in the country: a $238 million penthouse overlooking Central Park. Griffin already owns multi-million-dollar properties in Chicago, Miami, and London.

The pied-à-terre tax, sponsored by Senator Brad Hoylman, would institute a surcharge on non-primary residences worth $5 million or more. The surcharge would start at 0.5% and rise to 4% for homes worth more than $25 million. For people like Griffin, it’s pocket change. State Budget Director Robert Mujica estimates the new tax would generate $9 billion in new revenue over the next decade.

New York’s billionaire class has been let off the hook by a regressive tax structure that puts the burden on working families in the form of higher sales and property taxes. These times call for us to have the courage to demand that the wealthiest New Yorkers pay their fair share. New York is already the most unequal state in the country, with the top 1% taking home 45 times more than the bottom 99%. The Trump tax scam has only made the problem worse, as billionaires are now benefiting from some of the lowest tax rates in decades.

Austerity measures, fueled by the false narrative that there just isn’t enough money to go around, have wreaked havoc on our communities. In cities like Rochester and Schenectady, half of all children live in poverty. A state as affluent as ours should not have young children going to sleep hungry or elderly people unable to afford their rent.

The entire tax system in New York is rigged to benefit the super wealthy. Taxing the rich shouldn’t be a last resort for our Governor and Legislature. New York needs a pied-à-terre tax, an expanded millionaires’ tax, the elimination of the carried interest loophole, and an end to the billion-dollar giveaways to giant corporations.

This restructuring of our tax system would allow for investments in our struggling communities. It would mean we could fully fund our public schools, repair our crumbling infrastructure, and expand access to affordable health care and child care.

Corporate-backed think tanks like the Empire Center will wave their arms and cry “tax flight,” but this has proven to be a myth. The people who move the most frequently are young people and low-income families seeking good-paying jobs and a better quality of life. And what will improve quality of life in New York and make young families want to live here? Quality public schools, affordable housing, and reliable transportation.

The self-imposed shortfalls and spending cuts continue to hurt our communities. The Governor needs to stop kowtowing to CEOs and big developers and insist that the people with the most contribute the most.

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Jessica Wisneski is Co-Executive Director of Citizen Action of New York. Michael Kink is Executive Director of Strong Economy for All. On Twitter @jesswisneski & @citizenactionny.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Pied-à-Terre Tax Should Be Just The Start Wed, 13 Mar 2019 04:00:00 +0000
What's The [Data] Point? 18.6%, New York's Inequality & Social Safety Net https://www.gothamgazette.com/city/8113-what-s-the-data-point-18-6-new-york-s-inequality-social-safety-net https://www.gothamgazette.com/city/8113-what-s-the-data-point-18-6-new-york-s-inequality-social-safety-net whats the data point


What's The [Data] Point? Episode 60 -- 18.6%, Inequality and the Social Safety Net, with Greg David and Cara Eisenpress [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

gregdavid caraepress amazon18.6% is the poverty rate in New York City. Greg David and Cara Eisenpress, both from Crain's New York Business and the Craig Newmark Graduate School of Journalism at CUNY, discuss their recent reporting exploring New York City's safety net, how it's funded, and how it compares to other places, while showing that the city's robust safety net is made possible by the city's vast inequality and tax structure.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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What's The [Data] Point? 18.6%, New York's Inequality & Social Safety Net Fri, 30 Nov 2018 05:00:00 +0000