(12/06/11) Behind the scenes talks in Albany could result in a revamped state tax code, apparently increasing taxes on the wealthy next year. Governor Cuomo, who is asking for the changes, is also proposing a gambling expansion and other initiatives.
Cuomo promised to "freeze taxes" since his campaign a year ago, is now pushing the changes. The plan would also cut taxes for the middle class.
Cuomo continues to avoid saying he supports a tax hike for the rich. But after a year of strongly opposing a "millionaire tax," Cuomo has said he's open to the idea. As Karen DeWitt reports, the governor hopes the legislature will consider his proposals later this week.
Governor Cuomo outlined his agenda
for a possible special session in what he called an Op-Ed column to newspapers.
In it, he says he’s seeking more gambling casinos in New York, and an
infrastructure repair fund that will fix dilapidated roads and bridges and create
numerous construction jobs. He also
wants a job training program for inner city youth, and more money for regional
economic development.
At the end of his essay, Cuomo
mentions the topic that’s brought the most controversy and discussion, a
revamping of the state’s tax codes, which could result in wealthier New Yorkers
paying more in taxes.
EJ McMahon, with the conservative
leaning think tank The Empire Center, likened the first items to a big box delivered from Federal Express or UPS.
“And you’re kind of excited, only to
open it, and find that it’s a smaller
box surrounded by Styrofoam peanuts,” McMahon said. “The governor’s so-called
jobs program is bascially Styrofoam peanuts.”
McMahon says the tax proposal is key.
“The tax increase is about either
extending or permanently establishing a higher rate than now is in current
law,” said McMahon. “Which of course reverses his position on taxes, until very
recently.”
The governor has said repeatedly
during his first year in office that he does not sanction higher taxes, and has
remained steadfastly opposed to the extension of a temporary income tax
surcharge on millionaires, which expires at the end of this month.
Elizabeth Lynam, with the budget
watchdog group Citizens Budget Commission, says reducing inequities in the
current tax code and reexamining all the tax brackets is a much better plan,
not just “plunking in” one bracket or simply extending extra taxes on the
richest New Yorkers.
The State Assembly is due back at the
Capitol Tuesday afternoon, with the Senate expected on Wednesday. If the
legislature were to agree to Cuomo’s proposed changes, they would be clearing up some major budget
hurdles months before the start of the new fiscal year in April. McMahon, with
the Empire Center, says there’s a good reason for the governor to desire action
in December, and it doesn’t have to do with the budget.
In February, Cuomo will need to
decide whether or not to reject the legislature’s plan to draw new districts
for its members. McMahon says lawmakers may think that if they agree with some of the governor’s agenda
now, Cuomo may allow them more leeway to draw district lines to suit their
political interests. After the February
deadline for redistricting passes, the governor’s leverage significantly
decreases, he says.
“I am not suggesting a spoke quid pro
quo here,” McMahon said. “This doesn’t need to be mentioned. Everyone is aware
of it.”
Late in the day, Cuomo released a
second statement that he also called an “Op Ed”. In it, he says the current tax system is
“unfair”, and proposes adding “multiple “ income brackets, including more “high end brackets”, another
way of saying he wants the wealthy to pay more taxes.
The governor is already getting some
pushback. The chair of the state’s Conservative Party, Mike Long, says in a
letter to Senate Republicans that “New York has a spending problem” that won’t
be resolved by increasing taxes.
And the leader of the state’s largest
business lobby, Heather Briccetti of the Business Council, says “an improved
business climate, not new taxes”, should be the top priority.
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