Every year, Governor Andrew Cuomo and Democrats in the state Legislature butt heads over whether to increase taxes on the richest New Yorkers to help pay for the state's schools, health care, and other programs funded in the state budget. 

But the perennial debate this year has morphed into something different.

Progressive groups argue the tax-the-rich push should provide funding stability over several budget years, shoring up a safety net that was strained during the pandemic and the resulting economic recession. 

On the other side are budget hawks who question whether a tax hike is necessary given the fragile recovery already underway and the potential for rich people to leave for a less expensive state and commute via Zoom. 

New York's budget is due to pass in a week. Cuomo's top budget advisor this week called significant tax increases unnecessary given newly identified revenue over the last several weeks.

The state also received $12.5 billion in direct pandemic aid from Congress, a "one-shot" revenue source to help the state recover the cash it would have generated last year.  

The money will avoid some of the deeper spending reductions Cuomo had initially proposed in a worst-cast scenario budget. 

But Democrats this year have spoken of equity for the budget after the crisis induced a recession that disproportionately affected poorer people and people of color.

"I think the Legislature has a fundamentally different perspective than the governor on the way forward after COVID," said Michael Kink, executive director the group Strong Economy for All. "The Legislature is saying we should invest in schools, higher education, in health care, in all communities."

And injecting more revenue from rich people into schools, health care, and other programs would supercharge the economy, Kink said. 

"Take their taxes into a booming economy and raise revenue on a recurring basis, we can reinvest in all our communities," he said. 

But Andrew Rein of the Citizens Budget Commission disagrees, pointing to the relative ease with which people can leave New York to live some place cheaper.

"The proposals for tax increases are both unnecessary, but also economically risky," Rein said. "High-income earners pay a significant share of our state operations spending, and right now we don't need to give them a reason not to come back to New York or leave New York."

New York relies on a small number of very wealthy tax filers to provide much of its revenue. For budget hawks, the fear is these people would flee the state, made all the easier after a year of video conferencing and remote work. 

"Actually between 2010 and 2018, our share of the nation's millionaires declined 17 percent," Rein said. "If we had capped those millionaires here, we'd actually have billions more in revenue right now."