Gov. Kathy Hochul pledged to hold the line on tax increases in the coming state budget talks, saying Thursday at a news conference doing so would go against efforts to reduce the tax burden made earlier this year.
But at the same time, Hochul and outgoing Budget Director Robert Mujica acknowledged the state budget could pose a challenge next year given the broad uncertainty over the economy and the potential of tipping toward a recession even as tax revenue currently remains strong.
Progressive advocates are already making a push for increasing taxes on wealthier New Yorkers in order to boost funding for schools and health care in the state with the goal of shielding poorer people from the effects of an economic downturn.
Hochul, elected to a full term in November, dismissed the idea of raising taxes during a news conference in which she also highlighted a year's worth of accomplishments.
The governor pointed to rebate checks sent to property taxpayers earlier this year as well as a faster phase in of a tax rate cut aimed at middle-income earners in the state.
"I don't believe that raising taxes in a time in which we just cut taxes makes sense," she said, adding, "We just did that a year ago. I'm not going to turn around say we're raising your taxes. I don't foresee that."
Mujica warned economic forecasts are less rosey amid interest rate hikes by the Federal Reserve with the goal of curbing record inflation. Fear of induced recession and higher unemployment lingers.
"What we're hoping for is exactly what the fed is trying to do as well, which is have a soft landing," Mujica said. "That way we have the ability to recover quickly."
And it's those concerns over a recession that advocates like Theo Oshiro of Make the Road New York say is a reason to spend now to aid low-income people, especially on issues like housing.
"We know this is completely unaffordable for our families and so as a state we need to step up for these families," he said.
Advocates this year have already started to press elected officials to further increase taxes on rich people next year as a way of aiding lower-income New Yorkers.
"We need to ensure that the people who are proffitting the most from being in the state of New York and the city of New York that there is an equitable taxation system," Oshiro said.
Prior tax increases have led to a bounty of revenue, enabling an historic increase in school aid.
"New York voters overwhelmingly think the wealthy paying what they should in taxes makes sense — it allows the state to invest in services that benefit everyone," said Carolyn Martinez-Class, the campaign coordinator of the Invest in Our NY Campaign. "It's disappointing that the Governor is not centering the needs of the people who elected her to office."
The state's revenue has remained strong amid the ongoing financial uncertainty and as inflation has taken a bite out of everyday New Yorkers' wallets. To tame it across the country, the Federal Reserve has hiked interest rates in order to cool the economy.
But those actions could induce a recession and higher unemployment as a result, Mujica warned.
"The outlook is extraordinarily challenging," he said at the news conference. "We're seeing most consensus economic forecasters predicting an economic downturn which is driven by the actions of the federal government."
The state budget proposal, due to be released in the coming weeks by Hochul, will be one "reflecting the risks that the state is facing," Mujica said.