A progressive-leaning think tank on Wednesday is set to release its budget and fiscal outlook for New York as the state's finances have been stress test by the COVID-19 pandemic and amid an ongoing debate over raising taxes on wealthy residents.
The Fiscal Policy Institute's annual report backed a variety of new and increased taxes on upper income earners and businesses, including an unearned income surcharge, a corporate tax surcharge, a Global Intangible Low-Tax Income, a pied-a-terre or second home tax and a stock transfer tax.
New York is seeking $15 billion from the federal government to shore up revenue lost during the pandemic.
Gov. Andrew Cuomo's budget proposal would increase taxes on people who earn $5 million and above if the state receives only $3 billion in aid for this year's budget, and that spending plan scenario would also include reductions in spending as well as new borrowing to help close the gap.
But the conversation around increases in taxes for the rich has gone beyond linking it to federal aid for progressives in the Legislature and among supporters.
"Big challenges require bold action. The federal government must help meet the health and fiscal hurdles brought on by the pandemic," said Jonas Shaende, the group's chief economist.
"However, our need for immediate relief cannot eclipse the state's responsibility to assure a just tax structure, quality public education, supportive services, support cash-strapped local governments and struggling small businesses. There is no single solution for recovery – crafting the state budget for FY 2022 requires transformative vision and commonsense action."
The 1.2 million job losses of the last year have hit largely in the hospitality and service sectors, where many workers are low income and are people of color. At the same time, progressive groups have called for undocumented workers to be included in benefits meant to aid those who have lost their jobs due to the crisis.
The issue highlights what will be a broader array of questions raised in the state budget discussion in the coming weeks, as lawmakers seek to boost schools and health care amid the ongoing pandemic.
"Our state's strength is our diversity," said David Dyssegaard Kallick, the deputy director and director of the Immigration Research Initiative. "Immigrants and refugees are invaluable to our economy as they put their energy, talent, and experience to work in communities statewide. Supporting immigrant workers who have lost income during the pandemic will help families keep food on the table while benefiting their local economies."
A video on the presentation from the Fiscal Policy Institute can be found here.
"New York is a wealthy state, and it has the ability to meet its existing financial commitments and cover the cost of our pressing new needs - whether or not the federal government can partially or fully close the state's $15 billion budget shortfall," said Rachel Hyman, the Fiscal Policy Institute's interim executive director.
"FPI's 31st annual state budget briefing video highlights an array of state revenue-raising options, including individual and corporate tax reforms. FPI urges the governor and legislature to implement just tax policies to get us through hard times and put us on a course towards growth."