New York Governor Focuses on Revenue Raisers, Federal Aid

New York Gov. Andrew Cuomo, who has a $14.9 billion budget hole to fill before the fiscal year ends, used his State of the State address Monday to send an urgent message to President-elect Joe Biden: Federal help is needed, and soon.

“New York is suffering and New Yorkers are tired of being abused, and demand that Washington stops causing damage and starts resolving the damage they caused,” Cuomo (D) said.

The speech was done remotely due to the coronavirus pandemic, unlike addresses in the past where thousands of attendees descend on the state Capitol. Cuomo said he plans to release portions of his policy agenda over a four-day period, with the last scheduled for Thursday.

Other than federal aid, Cuomo’sspeech on Monday largely centered around a need for healthcare reform and a rapid vaccine rollout as Covid-19 cases statewide increase by the tens of thousands each day. He proposed expanding telemedicine, creating a public health emergency training program, and eliminating health insurance premiums for 400,000 low-income New Yorkers.

Cuomo once again made a pitch for legalizing recreational marijuana so the state can tax it and gain a new revenue stream, along with the money the state could gain by allowing New Yorkers to use their mobile phones to bet on sports events.

Cuomo’s address didn’t include details on his plans for the fiscal 2022 budget, due out on or before Jan. 19. That spending plan will have to account for a projected deficit of about $16 billion, according to the state budget office. The new fiscal year begins April 1.

SALT, Wealth Tax

Despite the state’s need for cash, Cuomo said a tax on the ultrarich and freezing the next phase of a middle-class tax cuts wouldn’t help the budget situation.”To close our $15 billion budget gap on our own would require extraordinary and negative measures,” he said.

Under tax cuts enacted in 2016, the personal income tax rate will drop in the 2021 tax year to 5.97% from 6.09% for those individuals earning between $40,000 and $150,000, and to 6.33% from 6.41% in the $150,000 to $300,000 bracket.

Pausing the phase-in would save $500 million, he said. And a tax on those earning $1 million annually would only raise $1.5 billion. Cuomo said it should be done at a federal level instead, so New York isn’t put at a competitive disadvantage with other states

Freezing labor contracts for public employees would save another $1 billion, and cutting education funding by 20% would equate to $5.2 billion in savings, he said. “Even after all of that pain, we would still need billions in cuts to healthcare in the middle of a pandemic and we would need to borrow billions at the cost of future generations,” Cuomo said.

Cuomo called on the incoming administration to address the 2017 federal tax law’s $10,000 cap on state and local taxes (SALT) deductions signed by President Donald Trump. The provision has netted tax increases on residents in New York, New Jersey, and California with higher property taxes.

“This is a national challenge. It is a war, and like every war before, it must be financed by Washington,” Cuomo said.

Pot, Sports Betting

New York would be the most populous state yet to allow mobile sports betting if lawmakers agree toCuomo’s proposal.

Cuomo, announcing his plans last week, said he envisioned a system run like the state lottery to maximize government revenue. The New York State Gaming Commission would select and license a sports operator or platform that works with an existing licensed commercial casino.

State officials have estimated that taxing those wagers could bring in as much as $500 million annually, and the money would start flowing to Albany a lot faster than under Cuomo’s proposal to permit adults to buy—and pay taxes on—cannabis products.

This is the third year Cuomo has proposed a legal adult-use cannabis program in his policy speech.

Last year the measurefell out of budget talks in late March as coronavirus cases began to rise and political attention turned to addressing the Covid-19 pandemic. Legislative leaders have said they support the idea, but have differences to work out on how the tax revenue and business license decisions would be handled.

New York already has legalized medical marijuana and cannabinoidhemp. Cuomo’s plan includes assistance to pot entrepreneurs in communities of color that have been “disproportionately impacted by the war on drugs,” according to the proposalannounced last week.

Recreational cannabis sales to adults over the age of 21 would eventually generate more than $300 million a year in tax revenue, state officials have said.

Other Proposals

The governor’s agenda, along with several items released ahead of his speech, includes:

• Launching a New York Public Health Corps, in partnership with Cornell University and Northwell Health, to hire and train 1,000 fellows who will serve for one year facilitating vaccination efforts.

• Creating a free online citizen public health training program to educate and certify tens of thousands of people to help with the public health emergency.

• Modernizing the state Department of Health’s Office of Professional Medical Conduct through legislation providing the office with tools for effective investigation and discipline of state-licensed physicians, physician assistants, and specialist assistants.

• Enacting renewal requirements for licensed medical professions to streamline oversight, and introducing legislation to strengthen disciplinary actions for misconduct.

• Expanding and improving access to telehealth through changes including adjusting reimbursement incentives, eliminating outdated regulatory prohibitions on delivery, removing outdated location requirements, and increasing training for patients and providers.

• Passing the Medical Supplies Act to incentivize New York companies to manufacture medical supplies. The state would purchase from those supplies first.

• Speeding up vote counting by requiring county boards of elections to process absentee ballots as they are received, and to begin counting and reporting those ballots on Election Day.

• Letting voters request absentee ballots 45 days before an election rather than 30.

• Extending early voting hours to 9 p.m. from 6 p.m. on weekends as well as a minimum of three weekdays.

• Extending a statewide moratorium on commercial evictions through May 1 for business tenants hurt by restrictions intended to slow the spread of coronavirus.

• Banning late payments or fees for missed rent payments during the pandemic.

• Converting vacant commercial space to supportive and affordable housing.

• Establishing an automatic moratorium on utility disconnections in regions under states of emergency, which applies to electric, gas, water, telecommunications, cable, and internet services.

To contact the reporter on this story: Keshia Clukey in Albany, N.Y. at [email protected]

To contact the editors responsible for this story: Jeff Harrington at [email protected]; Yuri Nagano at [email protected]

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