New York buoyed by federal aid, tax increase
A year ago, Gov. Andrew Cuomo and state lawmakers approved a $177 million budget against hurricane-strength headwinds: pandemic-high deaths, the widespread closures of businesses, millions laid off from work and a predicted $13.3 billion shortfall in tax revenue.
A year later, Cuomo and lawmakers have passed a $212 billion spending plan buoyed by $5.5 billion of the $12.6 billion New York will receive through the American Rescue Plan signed by President Joe Biden last month. It also includes revenue from a tax increase on people earning more than $1 million annually.
Enacted by Cuomo on April 7, the budget had the support of Assembly members Jonathan Jacobson, whose district includes Beacon, and Sandy Galef, whose district includes Philipstown, both of whom are Democrats. Sen. Sue Serino, a Republican whose district includes the Highlands, voted “no.”
State agencies now begin the process of distributing the funds.
The Empire State Development Corp. will give $800 million in grants to small businesses to help with payroll, rent or mortgage payments, property or school taxes and other expenses. Another $2.4 billion will go to renters facing eviction because of the COVID-19 shutdown.
The state also has mandated broadband providers offer service to low-income households for $15 per month and created a $2.1 billion fund to aid workers who lost income during the pandemic but did not qualify for unemployment, such as undocumented immigrants.
In a statement, Serino criticized that expenditure, saying it will support “people living in the state illegally.” But Jonathan Bix, executive director for Nobody Leaves Mid-Hudson, an advocacy group based in Poughkeepsie, called it “a historic victory” that will “finally bring vital support to workers excluded from even the most basic state and federal relief during the pandemic, including thousands of workers across the Hudson Valley.”
There is new funding for environmental programs: $500 million for clean water projects (bringing total funding to $4 billion) and $300 million for environmental protection.
In addition, under the budget measure voters will be asked in November 2022 to approve a $3 billion bond to “fund environmental improvements that preserve, enhance, and restore New York’s natural resources and reduce the impact of climate change,” according to the state.
The environmental funding will “help shoreline communities become more resilient to the devastating impacts of the climate crisis,” said Jeremy Cherson, of Riverkeeper, which supports the measure.
The budget also:
- Increases the top state personal income tax rate to 9.65 percent, from 8.82 percent, for individual filers whose income is more than $1 million annually and joint filers making more than $2 million.
- Establishes two new brackets: a rate of 10.3 percent for those whose income is between $5 million and $25 million annually and 10.9 percent for those with incomes of more than $25 million.
- Increases the tax rate to 7.25 percent, from 6.5 percent, through 2023 for businesses with income exceeding $5 million annually.
- Slightly lowers the rate for joint filers making between $43,000 and $161,550 from 6.09 to 5.97 percent, and for those making between $161,550 and $323,200 from 6.41 to 6.33 percent.
- Restores $600 million in retroactive salary increases to 120,000 state workers whose 2 percent pay raise was frozen last year.
- Restores $415 million in cuts made to Medicaid payments to hospitals and health care providers.
- Allocates $40 million for nonprofit arts organizations harmed by the pandemic shutdown.
- Increases the maximum award under the state tuition assistance program by $500, to $5,665.