Even with aid from Washington, New York may still need to raise taxes next year in order to close a yawning budget gap created by the COVID-19 pandemic, Gov. Andrew Cuomo on Wednesday said.
"If Washington doesn't provide enough funding, I believe tax increases are going to happen," Cuomo said at a news conference.
He added later in the news conference: "I believe there's going to be a tax increase and I believe a lot of tough decisions will need to be made. I believe there will be a lot of (spending) cuts.
The state is seeking $15 billion in aid from the federal government to make up for tax revenue that evaporated this year due to the pandemic. Local governments are also facing significant budget shortfalls.
Cuomo has previously sketched out a state budget without federal aid that increases taxes on the very wealthy, reduces spending and borrows heavily. Public employee layoffs would also likely be on the table.
Aid from Washington would stave off the worst-case scenario and tax increases on wealthiest New Yorkers would not close the budget gap fully without support from Congress.
"The question, though, is how much?" Cuomo said of tax increases. "How much on who and how much do you need?"
Increasing tax rates on millionaire and billionaire New Yorkers is the most likely option. Some fiscal watchdogs in recent weeks have also pointed to delaying middle-income tax cuts that are once again due to phase in next year.
Congressional lawmakers are considering a $908 billion relief package that would extend unemployment benefits and aid businesses affected by the pandemic. It is not due to include state and local government.
President-elect Joe Biden has signaled support for aid to states, but a package is unlikely to be unveiled until sometime early next year; New York's budget is due to pass by March 31.
"I don't want to give up on Washington, yet, because if you give up on Washington and assume there's no aid from Washington, balancing the budget is going to be detrimental to every family in this state," Cuomo said.