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Inside the Capitol. Photo: <a href="http://www.flickr.com/photos/54021469@N00/394233312/">Holley St. Germain</a>, Creative Commons, some rights reserved
Inside the Capitol. Photo: Holley St. Germain, Creative Commons, some rights reserved

Cuomo says no spending cuts needed to make tax cuts

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Governor Cuomo's budget director outlined more details of the governor's tax commission proposals to cut property and business taxes in the state.

Governor Cuomo is under pressure from Republicans to cut income taxes. He's also under pressure from New York City mayor-elect Bill deBlasio to raise income taxes on the rich. But he says the state, which already has a temporary income tax surcharge on the wealthy, needs to address its highest-in the-nation property taxes right now instead of personal income taxes (also known as PIT).

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Reported by

Karen DeWitt
NYS Capitol Correspondent

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“You ask people what is your income tax rate, nobody knows,” Cuomo said. “You ask them what their property tax is, they can tell you the number to the penny.”
 
The governor’s budget director Robert Megna offered more details of the plan. It would result in a two-year property tax freeze if local governments and schools hold the line on spending. He says it would also include a tax credit for lower income New Yorkers who pay a high percentage of their wages in property taxes, sometimes called a circuit breaker.
 
The plan also includes corporate tax cuts, a reduction in the estate tax and a faster phasing-out of an energy tax.
 
The Cuomo Administration has been stung by criticism that the tax commission plan did not do enough for New York City. Megna says the plan will now include a renters' tax credit. When combined with the other tax cuts, it would provide $450 million in tax relief to New York City residents.
 
“When you add the renters credit that the governor supports, you get a fairly balanced program between New York City and the rest of the state,” Megna said.
 
The combined tax reductions total $2 billion. The state has a projected $1.7 billion deficit for the new fiscal year. Megna says he thinks the gap can be closed and the tax cuts can be achieved if the state continues to hold the line on spending to growth to 2 percent, which it's done the past three years. Megna was asked whether he thinks there will need to be spending cuts to make up for the $3.7 billion.
 
“The question is, how you define what you mean by cuts,” Megna said.
 
But Governor Cuomo says there don't have to be any spending cuts to pay for the tax reductions. He says he even plans to increase aid to schools by as much as 5% from the current year.
 
And he says those who are skeptical or against the proposed tax reductions do so for ideological reasons. The tax commission plan has been criticized by both progressive and conservative groups, whom Cuomo said represent the “polar extremes” of the political debate.
 
“Their response is sort of predictable,” Cuomo said.
 
The governor says savings could be achieved by keeping some parts of the budget at zero growth, but he says its “premature” to get into specific numbers over a tax cut plan that is for now still a “concept.”

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