Cuomo Proposes New York Tax Overhaul
New York Governor Andrew Cuomo wants to overhaul the state’s tax system, use public-private partnerships to fix infrastructure and legalize gambling as he faces a deficit of as much as $3.5 billion next fiscal year.
“The state’s deficit is only a symptom and as governor, I want to address the illness,” Cuomo wrote in an opinion article e-mailed to media outlets yesterday. “The essential problem we face is a struggling economy.”
State revenue is “collapsing,” Cuomo said last week, amid shrinking Wall Street bonuses and job cuts in the finance industry, which accounted for more than 20 percent of wages paid by state businesses in 2010. New York has projected a $350 million deficit this fiscal year. New York, the third-most- populous U.S. state, had an unemployment rate of 7.9 percent in October, compared with 9 percent nationwide.
To promote job growth, Cuomo said he wants to create an infrastructure fund to finance the repair and development of highways, bridges and major construction projects, without specifying the amount of money involved. Legalizing gambling would also help create jobs, he wrote.
The plan could become the cornerstone of a special session agenda if lawmakers and the 53-year-old, first-term Democrat can agree on the details. Senate Republicans, who hold a majority, were told to return to Albany for a conference meeting on Dec. 7, Scott Reif, a spokesman for Majority Leader Dean Skelos, said in an e-mail. The majority-holding Assembly Democrats were told to come to Albany for a meeting tomorrow, Michael Whyland, a spokesman for Speaker Sheldon Silver, said Dec. 2.
Tappen Zee Bridge
Last month, Cuomo said he had discussed with labor unions the possibility of using their private pension funds to invest in infrastructure projects such as building a new Tappen Zee Bridge, he said. The bridge, which spans the Hudson River and connects the lower Hudson Valley region with New York City, could cost as much as $6 billion to replace, Cuomo said.
Legalizing gambling would help “recapture revenue that is currently being lost to other states,” Cuomo wrote. Indian casinos already operate within New York’s borders and slot machines are allowed at the state’s eight race tracks.
Cuomo also wants to “pursue comprehensive reform of our tax code to make it fair, affordable and one that incentives economic growth,” he said in the article.
Last week, Cuomo’s aides proposed a plan that would increase taxes on the wealthy and cut taxes on the middle class, three legislative aides with knowledge of the talks said. No specifics of the proposal, discussed during negotiations over a possible special session agenda with lawmakers’ staff, have been made available, they said. They asked not to be named because talks are ongoing.
This week, Republicans will discuss a “number of issues, including our commitment to cutting taxes” said Reif, the Skelos spokesman. They have a one-vote majority in the Senate.
Senator John Bonacic, a Republican representing much of the Catskill region, introduced a bill in March that would raise taxes on those who earn $1 million or more and dedicate the revenue to education and relief for local governments. Bonacic still supports that move, said Jillian Deuel, a spokeswoman.
New York City Mayor Michael Bloomberg said raising taxes isn’t the right way forward, adding that he hadn’t seen the governor’s proposal. The city’s economy generates about 53 percent of New York state tax revenue, including more than 60 percent of income-tax collections, according to the city’s Office of Management and Budget.
“Fundamentally you cannot tax your way out of problems,” Bloomberg said at a news conference in midtown Manhattan today. “You’ve got to get your expenses under control and build the economic base so that if you have tax revenue increases they should come from an expanded economy as opposed to expanded tax rates.”
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
To contact the editor responsible for this story: Mark Tannenbaum at email@example.com