(The Center Square) – Citing concerns about looming budget deficits due to COVID-19’s effect on the economy and the impact that may have on state programs, some New York state lawmakers are urging their colleagues to support tax hikes on high earners and the wealthy.
State Sen. Jessica Ramos, D-Queens, filed S8277 this month. The measure would establish a billionaires’ tax. Under the proposal, the state would apply an income tax on the currently untaxed investments and consider “unrealized capital gains as income.”
The money would be used to create a worker bailout program that would provide individuals with $3,300 per month if they did not qualify for unemployment and suffered an income loss due to the emergency.
In an interview with NY1, Ramos said billionaires are “the only people who actually have money right now” and she hopes Gov. Andrew Cuomo, who has opposed efforts to tax the affluent, understands that.
“It’s not enough to say that our state doesn’t have money," she said. "We are one of the richest places on Earth, we have 112 billionaires that live in New York State, more than any other place in the world. You can’t tell me that there isn’t money to be able to cover the things that my neighbors need, because to me what that sounds like is that there isn’t is any willpower to do the right thing.”
While Ramos is seeking help for individuals, state Sens. Shelly Mayer, D-Port Chester, and Toby Stavisky, D-Flushing, the Senate’s Education and Higher Education chairs respectively, are seeking a two-year increase in the income tax for people who make more than $5 million to provide funding for New York’s public schools and colleges.
Every dollar past $5 million would be taxed at a rate of 10.9 percent for the 2020 and 2021 fiscal years. That’s up from the current 8.82 percent tax.
“Education, from pre-K to college, has been underfunded for many years. As a result of the pandemic, education will be facing unprecedented challenges. This legislation will mitigate its fiscal effect,” Stavisky said.
Public schools would receive 85 percent of the funding, while the rest would be split between the SUNY and CUNY colleges.
The tax plans come as Gov. Cuomo has stated the state faces a $13 billion budget deficit.
E.J. McMahon, research director for the Empire Center, disputed that figure. McMahon said that state officials last month, when comparing current revenue to current spending estimates, said the gap was $10 billion, and that was without removing the governor’s planned $1 billion cut in state spending and $1.4 billion in deferred federal payroll tax payments.
When factoring in federal COVID-19 relief funding, McMahon stated the deficit could fall under $7 billion.
McMahon added the best solution is to cut spending.
“The alternative is to raise taxes – a step made much more risky in the wake of the new federal Tax Cuts and Jobs Act (TCJA) of 2017, which capped state and local tax (SALT) deductions at $10,000,” he wrote.
Not all proposed revenue-generating measures are targeted at wealthy wage earners, though.
State Sen. Joe Addabbo, D-Queens, reiterated his call to allow mobile sports betting in the state. New York currently allows sports betting at its upstate casinos only.
With no sports books in New York City, sports bettors there either bet illegally through offshore accounts or bookies or they cross the Hudson River and bet in New Jersey, where more than 80 percent of the sports wagers placed are online.
If passed, New York would be the largest state population-wise to allow mobile sports betting. Addabbo, who chairs the Senate’s Racing, Gambling and Wagering Committee, estimates it would generate $200 million in annual revenue. He currently has a bill in Albany that would allow mobile applications.
Cuomo, though, has resisted efforts to expand sports betting in the state, saying voters need to pass a constitutional amendment to allow mobile betting.
“We do not as a state have the luxury of declining revenue at this point,” the senator told CBS2. “We have a severe budget deficit. Even prior to the coronavirus we had it, so now there’s a need for revenue.”