(The Center Square) – New York Governor Andrew Cuomo said Wednesday that the tax hikes introduced by the budget for its high-end earners will be offset – and some more – when Congress approves the state and local Restores tax deductions on federal taxes.
These deductions, better known as SALT, were capped at $ 10,000 under a tax reform plan passed by the Trump administration and a Republican Congress in 2017. The governor, speaking on the 2021-22 state budget, told reporters that the decision was a decision to attack New York and other states.
Cuomo added that he and other governors had spoken to President Joe Biden about this and that members of the state’s congressional delegation supported the repeal.
“So when you talk about this tax package, you can’t talk about it without expecting SALT to be lifted, and SALT is important in providing fairness and relief to our taxpayers,” said the governor.
The SALT cap costs the state $ 13 billion annually, Cuomo said. The budget tax increases, which include an increase in millionaires and new bonuses for those earning $ 5 million and $ 25 million, as well as a corporate income tax increase, are expected to be $ 3.5 billion in the coming year and the following year Bring in $ 4.3 billion.
The governor said there would be no taxes on capital gains or estates.
“The feeling was that these taxes were damaging the state and actually costing the state more money than we were going to raise,” he said.
Republicans denied Cuomo’s claims about taxes, saying that the increase in the state will only result in more high-income individuals leaving the state.
Nick Langworthy, chairman of the state GOP, said the spending plan was wasteful.
“This budget makes it clear that the only way to save New York is to elect a Republican governor who can stand up to this madness and return common sense to the state government,” he said.
At $ 212 billion, the 2021-22 spending plan is 16.5 percent higher than last year’s budget of $ 177 billion. Part of that increase comes from the federal government, including about $ 12.6 billion in funding from the recently passed US bailout plan.
In a statement on the budget, state auditor Thomas DiNapoli said the resources used to increase the budget are only short-term solutions and that lawmakers must ensure future spending does not get out of hand.
“The state must plan for the end of federal emergency aid and deploy new tax resources to fund essential services, re-contribute to rainy-day funding, and reduce projected out-of-year gaps,” he said. “Aligning recurring income with recurring expenses over the long term is critical to getting the New York finance house in order.”
Some of the budget items – including the tax hike part – have yet to be approved by the Assembly. The Senate passed the tax increases by 38 to 25 votes after a late night session was extended to early Wednesday morning.
According to the state constitution, the budget is to be adopted at the beginning of the financial year, which begins on April 1st.
However, both chambers passed a short-term emergency appropriation on Tuesday evening. Jennifer Freeman, DiNapoli’s communications director, said the controller released the payroll that night.
Last week, DiNapoli said the state had to pass the budget by Monday to ensure that all government employees who were due to receive the paycheck this coming Friday would get it on time.
Due to the delay in passing the measure, Freeman said, “Some employees may have a delay in receiving their printed checks or direct deposit.”