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The massive amount of federal aid heading to New York under the $1.9 trillion COVID-19 stimulus bill eliminates the need for Albany to raise income taxes or other levies — unless the pols are just interested in “punishing the rich,” the head of the city’s top business group said Wednesday.
“The ARP [American Rescue Plan], together with higher than expected income tax revenues, definitely closes the state and city budget gaps and makes tax increases this year or next unnecessary,” said Kathryn Wylde, CEO of the New York City Partnership.
She noted New York State and its residents will receive a total of $100 billion in federal aid — including $10 billion for education, $2.2 billion for rental assistance, grants for restaurants and Broadway, loan forgiveness for small and minority-owned businesses and money for coronavirus vaccine distribution.
Just as important, the relief measures provide $6 billion in unrestricted aid to the city government and $12.6 for the state government to deal with the fallout from the pandemic.
“We are flush!,” Wylde told The Post.
“If the state acts to raise taxes, it is a political statement aimed at punishing the rich — not a reflection of economic need,” she said.
Before knowing how much federal aid Albany would receive, Gov. Andrew Cuomo proposed raising incomes taxes for the wealthiest New Yorkers to a top rate of 10.86%, up from 8.82%, when he submitted his budget plan in January. New York City’s well-to-do residents would pay a combined top state and local income tax rate of 14.7%, the highest rate in the nation.
Cuomo — who is battling sex harassment and nursing home scandals — said on Sunday that tax hikes are still on the table despite the infusion of federal aid.
“It is on the table…. It is the difference between $12.5 and $15 [billion]. And don’t get me wrong, the $12.5 billion is very, very helpful. But as you know, because I’ve said it a hundred and fifty times, we needed $15 billion in my opinion,” Cuomo said.
Meanwhile a left-leaning coalition — which includes the Rep. Alexandria Ocasio-Cortez linked Democratic Socialists of America — is pushing for up to $50 billion in a slew of tax hikes on the wealthy and Wall Street investors.
Democratic lawmakers who run both the state Senate and Assembly are reviewing the federal pandemic relief package, and haven’t taken tax hikes off the table.
Senate Finance Committee Chairwoman Liz Krueger (D-Manhattan) said the Democratic conference has not yet taken a final position on taxes.
But many Democrats in the Assembly said Albany should still raise taxes on the wealthy because the federal aid only covers one-time expenses fueled by the pandemic, and doesn’t address the pressing, long-term needs of the state or a structural imbalance when the one-shot federal stimulus dollars disappear.
“We need to raise taxes on wealthy New Yorkers who aren’t paying their fair share. There is a tremendous backlog of needs. There is a desperate need for revenues to fund our schools, for housing and health care,” said Assemblyman Tom Abinanti (D-Nanuet).
Abinanti also said a more stable state revenue base will lessen the need for local governments to raise property taxes.
Earlier this week, a spokesman for US Senate Majority Leader Chuck Schumer said the pandemic stimulus package wipes out New York government’s projected deficits.
“Ok. Thanks to @SenSchumer NYS budget deficit for this year is…..Zero, nada, niete, zilch (NY terms),” Schumer rep Angelo Roefaro tweeted.
Critics said Cuomo — mired in scandal — is compromised and should resign instead of negotiating a budget.
“Cuomo is asking for more time so he can use federal dollars and the budget to curry favors with Democrats,” said Assemblyman Ron Kim (D-Queens), who has called for the governor’s impeachment.
Cuomo said he will not resign and urged New Yorkers to await the results of state Attorney General Letitia James’s investigation of sexual harassment claims leveled against him by former staffers.
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