Gov. Andrew Cuomo kept the door open to approving billions of dollars in new taxes on businesses and wealthy residents, a day after New York’s top employers warned it could trigger the worst exodus since the Big Apple flirted with bankruptcy in the 1970s.
Cuomo, during a press conference Wednesday, rattled off his top priorities in budget talks with the Legislature: legalizing marijuana, improving public safety, COVID-19 reconstruction, green energy expansion and nursing home reform.
But Cuomo — who is battling multiple investigations into his handling of nursing homes during the pandemic and numerous sexual harassment accusations — ignored the elephant in the room: the Legislature’s push to increase taxes by a record $7 billion.
Cuomo did not rule out raising taxes when questioned by a reporter, even though his budget director Robert Mujica on Monday said the state budget due April 1 could be adopted without cutting spending or substantially raising taxes, thanks to $12.6 billion in federal COVID emergency aid and $2.5 billion in better than anticipated state revenues.
The only reason to increase taxes would be to accommodate additional spending on education, pandemic relief and other social services sought by the Democratic-run Senate and Assembly, Mujica said.
“You want to talk about 250 business leaders saying they’re worried about taxes. You know what that second worry is going to be? Crime, crime,” said Cuomo, dancing around the issue.
Cuomo himself proposed a $1.5 billion income tax hike on millionaires in his executive budget plan released in January — but that was before knowing how much federal pandemic relief the state would get after President Biden took office.
Cuomo also claimed the state still faces a projected $2.5 billion deficit, despite the infusion of federal aid and stronger tax revenues — contradicting what Mujicia said the other day .
“My number has been two and a half billion dollars, they’re at $7 billion….On the matter of policy, and what we try to do is compromise, the entirety,” the governor said.
“I tried to convince them on all the items that we just discussed. I tried to convince them on rebuilding, public safety, cannabis, green economy, nursing home reforms two and a half billion versus $7 billion, right? They try to convince the opposite way. And that’s the budget compromise. “
“The essence of the basic budget compromise doesn’t change, they’re higher on the need for revenues than I am.”
One budget watchdog questioned Cuomo’s figures.
“There’s no visible budget gap to the naked eye. Nothing is visible except a surplus,” said EJ McMahon of the Empire Center for Public Policy.
Cuomo started off his tenure as governor by pushing through a cap on local property taxes, over the objections of public employee unions. When a law on income tax surcharges adopted during the Great Recession expired, he and the Legislature re-upped them with some modifications and has renewed them several ties. He has lowered corporate and estate taxes.
But for the first time during his ten-year governorship, Cuomo faces a Democratic-run Assembly and Senate where both houses have a two-thirds plus majority to override his vetoes — if they stick together. So, if he vetoes state budget bills in a dispute over taxes, the Legislature could attempt to override his objections and impose higher taxes.
A prominent business advocate said Cuomo may rather negotiate an agreement with lawmakers for a lower tax hike rather than risk veto overrides.
“The Governor knows the damage that would be inflicted by the proposed tax increases,” said Kathryn Wylde, CEO of the New York City Partnership.
“The question is whether he is in a position to convince the legislature, which can override his veto if they disagree,” she said.
Meanwhile Cuomo said he is normally “obsessed” with adopting the new budget by the April 1 deadline — but suggested it might not be possible because Assembly Speaker Carl Heastie (D-Bronx) is infected with the coronavirus.
“That will trigger the quarantine of staff he worked with,” the governor said.
He said final budget negotiations are usually done in person with many budget staffers and the legislative leaders.
“I’m not going to risk public health to get it it done April 1,” Cuomo said.
“Zoom only goes so far.”
But Heastie responded, “My COVID diagnosis and any quarantine of staff will not affect budget negotiations.”
Added Heastie spokesman Michael Whyland in a tweet, “Yes – and our staff and the Speaker are quite familiar with Zoom and how to use it.”