ALBANY — The 2021-2022 budget proposed by Gov. Andrew Cuomo would continue the state’s fight against COVID-19 and begin its rebuilding after the pandemic.
Exactly how big the budget is, and who pays for parts of it, remains to be seen.
Gov. Andrew Cuomo on Tuesday presented a $193.3 billion spending proposal and would include $103.4 billion in state funds.
Cuomo repeated his demand for $15 billion in federal aid, but the budget is written as though it will get only $6 billion. The governor said he’d sue the federal government if it doesn’t send $15 billion.
After all the pain the Trump administration inflicted on New York, Cuomo said, the new government is legally, ethically and politically obligated to fix it.
New York, as other state and local governments, suffered substantial loss of revenue and increase in expenses amid the pandemic. Cuomo puts the difference between increased costs and decreased revenue at $15 billion.
“Don’t ask states to pay the cost. That’s not right. That’s not justice,” he said.
He said President-elect Biden’s $1.9 trillion stimulus proposal contains $350 billion for state and local government finances. He said $15 billion is a reasonable request as is just 4.3% of $350 billion while New York has 6% of the nation’s population.
That math assumes apparently that New York’s counties and cities get nothing, that all $15 billion goes to the state.
Cuomo’s presentation was devoted heavily to how badly New York was treated by the Trump administration and how much it now deserves a big pile of federal dollars.
“New York has been consistently assaulted by the incompetence, fraud, and illegality of the federal government and the fiscal crisis is legally and ethically their liability,” he said.
The budget briefing book notes that the state already received $27.1 billion in federal funding for COVID-related purposes in 2021.
Some details contained within the executive budget:
- Eliminate the $2.33 million Saratoga Springs receives and the $775,198 Saratoga County receives for hosting Saratoga Casino Hotel. Video lottery terminal aid would be eliminated for every other host community, as well, except Yonkers, which dedicates that aid strictly for education. The reason: The economic benefits of hosting a casino have outgrown any additional costs associated with it, so the host communities no longer need the aid.
- Establish a casino tax rate petition process through which the state’s four non-tribal casinos could ask to cut the tax rate on slot machine revenue — by far the biggest part of their business — as low as 25%, which is the tax rate on slots in Massachusetts casinos. The tax rate has been a sore spot for Rivers Casino in Schenectady, which pays a 45% tax on slot revenue, compared with 37% or 39% at the three other New York casinos.
- Allow the Gaming Commission to start the process of gauging interest in the three casino licenses that were authorized but not awarded.
- Temporarily suspend the legal requirement that Rivers Casino make payments to the horsemen and breeders at Saratoga Casino Hotel. This would continue as long as there are any COVID-related restrictions imposed on either facility and end after both facilities operate six full, consecutive calendar months without COVID restrictions.
- Allow more locations to offer Quick Draw and allow 18- to 20-year-olds to play Quick Draw in locations where alcohol is served.
- Decrease the state workforce under the executive branch from 118,193 in fiscal year 2020 to 114,721 in fiscal 2022.
- Pause for one year the phase-in of the middle-class income tax cut begun in fiscal 2018, so it is complete in fiscal 2026 instead of fiscal 2025.
- Establish three new tax credits totaling $130 million to help smaller businesses in the restaurant, accommodation and arts/entertainment industries.
- Expand crossbow hunting season and allow 12- and 13-year-olds to obtain big-game hunting licenses.
- Add a $1 fee for each license and registration transaction to maintain and improve the Department of Motor Vehicles’ technology systems and infrastructure.
After Cuomo finished, his budget director, Robert Mujica, gave a follow-up presentation that focused more on details of the spending plan. He also took questions from reporters.
Q: What about the ideas bandied about by progressives in the state Legislature — a tax on stock transactions, a tax hike on millionaires, an estate tax, a wealth tax?
A: “A lot of these ideas, people talk about them but they haven’t been fleshed out,” Mujica said. The wealth tax may not even be constitutional; New York already has the second-highest tax rate in the nation on the super-wealthy and doesn’t want to drive them out of the state; and in the computer age, stock transactions can be done anywhere. “You mobilize people to move their transactions and their servers to another part of the country.”
Q: Are you betting too heavily on the feds allocating $15 billion to New York?
A: “Fifteen is the state’s fair share. I’m confident that we’ll be treated fairly. … But again, what we’re counting on is six.”
Q: What if the federal aid is somewhere between $6 billion and $15 billion?
A: The governor and the Legislature would work on a solution. All of this, by the way, assumes the federal aid is appropriated by the April 1 start of the state fiscal year, which may not be a safe assumption.
Q: What is the time frame for the anticipated $350 million in revenue from taxes on legal recreational marijuana sales and $500 million in revenue on electronic sports betting?
A: It will take three to four years to develop a mature cannabis industry and less time for sports betting.
Q: Why is a millionaires tax hike in your proposed budget if it’s such a bad idea?
A: Because it’s been bandied about as a solution, and is part of a dialogue that needs to start on reconciling spending and revenue. The governor’s office also wants everyone to know that the super-wealthy in New York City will face the highest combined state-local tax rate in the nation if the state hikes its tax on them. New York City relies heavily on taxes paid by the wealthy and does not want to make them tax exiles. “We do need to compete economically with other states.”