Gov. Andrew Cuomo calls them “revenue actions” and “revenue raisers.” But many observers are wondering why they aren’t just called taxes or fees.
The approximately $1 billion in boosters included in the Democratic governor’s state budget proposal certainly raise something else: the ire of Republicans in the Legislature who say New Yorkers are taxed enough and pay too many fees already.
“No” was Senate Republican leader John Flanagan’s one-word answer when asked if fellow GOP members were likely to support the new taxes and fees unveiled during Gov. Cuomo’s budget presentation last Tuesday. But there’s plenty of negotiating to get done by the time the budget’s April 1 deadline rolls around.
The governor’s $168 billion spending plan includes a variety of ways to close a projected $4.4 billion budget gap, from imposing a new vehicle safety inspection fee to creating a surcharge for opioid manufacturers to cover some of the state’s costs from the drug epidemic.
The biggest chunk of “revenue raisers” the governor Cuomo is counting on is the $750 million in projected taxes on health insurance not-for-profit companies converting to for-profit businesses. But counting on that revenue is a gamble because there’s no guarantee any of those expected conversions will occur anytime soon.
The governor says the revenue raisers are needed to avoid cuts to public education and health care.
Gov. Cuomo’s latest budget proposal is a “new form of same old” in Albany, said E.J. McMahon, founder of the conservative Empire Center for Public Policy.
“They’ve targeted sectors and places that they think most people won’t notice,” McMahon said of the taxes and fees proposals.
Among the proposals, with their projected revenues as estimated by the governor’s budget office:
- Vehicle safety inspection fee ($3 million): a $120 fee imposed whenever the state Department of Transportation inspects motor coaches and other private for-hire, for-profit vehicles allowed to carry passengers.
- Health tax on vapor products ($3 million): would broaden the tax on e-cigarette and vaping products sold by distributors.
- Cigar tax enforcement ($12 million): would enhance efforts to make sure taxes on cigars are collected.
- Internet fairness conformity tax ($80 million): targets internet sales sites that link buyers to third-party sellers and would broaden the state’s existing sales tax law to charge a sales tax on transactions carried out on such sites as Amazon Marketplace and eBay.
- Opioid epidemic surcharge ($127 million): With New York among the states hit hardest by the heroin and painkiller addiction epidemic, Gov. Cuomo is looking to place a 2-cents-per-milligram tax on opioids sold in the state, to be paid by drug manufacturers.
- Health-care insurance windfall profit fee ($140 million): Health insurers are in line for big cuts to their expenses thanks to the federal tax overhaul, and Gov. Cuomo wants to slap a 14-percent surcharge on profits to help cover the state’s rising health-care costs.
One budget watchdog group, the non-partisan Citizens Budget Commission, supports some aspects of the governor’s budget plan, including broadening the tax on internet sales. But other “short-term fixes” could result in costs being passed to employers or individuals, they said.