Despite the grim prognosis, higher-than-anticipated tax revenues and federal funds have balanced New York’s budget with no need to raise taxes or slash services, the governor’s office said.
State Budget Director Rubert Mujica said that the budget proposed by Democrats in the state Assembly and Senate, which would raise taxes on the wealthiest New Yorkers, was unnecessary.
Proponents of raising taxes say that the state could raise billions from its wealthiest residents for vital social services, while critics contend that the wealthy would simply move out, leaving the rest of New Yorkers to shoulder the tax burden.
“We have identified over $5 billion in resources available that could be used to restore all of the reductions that were proposed in the executive budget proposal,” Mujica said. “So, you wouldn’t require any significant level of tax increases to pay for the restorations,” he concluded.
Mujica confirmed that the billions in federal aid from the recent $1.9 trillion ‘American Rescue Plan’ eliminated New York’s projected deficit. Additionally, state tax revenue was $2.5 billion more than expected, which contributed to easing the budget gaps.
Governor Andrew Cuomo has put forward his own budget proposal, but did not say he would refuse to sign a budget that included tax heights. Struggling with several scandals, Cuomo has to negotiate with the Assembly and Senate, the former chamber having opened an impeachment investigation into the governor.
Under the Assembly and Senate proposed budget, millionaires would see their taxes increase up to 9.85-11.85%.