Gov. proposes $168B budget
Recently, Gov. Andrew Cuomo released his state budget proposal, a $168 billion spending plan that attempts to address a $4.4 billion deficit, the largest since he was elected in 2010.
Though the budget stays in line with his promise to limit growth to 2 percent, it relies on millions of dollars in new tax and fee revenue, drawing immediate flak from Republican lawmakers in Albany. Assemb. Dean Murray (R,C,I-East Patchogue) disagrees with the spending. “Using words like ‘recoup,’ which means ‘tax,’ ‘revenue raisers,’ which means taxes, those are not good buzzwords when you’re facing a deficit,” Murray said after the budget presentation.
Among the new taxes and fees is a tax on opioid manufacturers. At two cents per milligram of active opioid ingredients sold, Cuomo anticipates $127 million in revenue for 2018-2019 and $170 million from there, which he says will go towards offsetting costs associated with the fight against opioid abuse. “We believe the tax on opioids will start to cause people to migrate away from opioids to other types of medicines.”
A vape tax for e-cigarettes, an internet marketplace fairness tax, a health insurance ‘windfall profit’ fee and a vehicle safety fee are also proposed under the new budget.
Some other proposals include:
Cuomo has proposed $26.4 billion in school aid, an increase in spending from last year by $7.6 million. A total of $1.5 million is proposed over three years to support gang prevention and resistance initiatives for middle- and high-school students in at-risk communities.
In terms of higher education, $103 million is proposed in the budget. SUNY schools like Stony Brook will receive a total increase of $11 million. The state would spend $18 million less on two-year institutions like Suffolk County Community College.
While talking about higher education, Cuomo urged lawmakers to pass the Dream Act, which would make those students eligible for state financial aid programs.
Cuomo has proposed spending $70 billion on Medicaid, an increase of $1.7 billion.
Energy and environment
Cuomo has proposed $1.9 billion on environmental spending, up $142 million from last year. The budget continues to fund the $2.5 billion Clean Water Infrastructure Act to support drinking water, wastewater and source water protection initiatives. That project was bonded and funded in 2017.
Using resources from the Clean Water Infrastructure Act and the Environmental Protection Fund, a $65 million initiative to combat harmful algal blooms in upstate New York water bodies is also proposed. The resources will be used to develop action plans to reduce sources of pollution and provide grant funding to implement the action plans. Cuomo did not indicate that any of that funding would come to Long Island. Last fall, researchers at Stony Brook University announced that water quality was at an all-time low on Long Island. During the months of May through August, every major bay and estuary across the Island was afflicted by toxic algae blooms or oxygen-starved waters, or both.
Cuomo has also proposed reforming the Brownfield Opportunity Area program, which provides financial and technical assistance to municipalities and community-based organizations. These plans allow those communities and organizations to apply for Brownfield development tax credits. The proposed budget includes legislation that would make enhancements to the BOA program to allow plans that are financed with local or other state funding to also apply for designation, as well as reform the current BOA process to bolster efficiency
The budget would invest $11.5 million to engage at-risk youth in social and educational programs to cut off the gang-recruitment pipeline. Cuomo launched this campaign in response to escalating MS-13 violence across Long Island. The funds would also help expand access to state intelligence resources and provide additional investigators and state troopers to assist local municipalities handle gang-related investigations.
Spending would remain at $715 million for cities, towns and villages. That number has remained the same since 2008. Cuomo’s plans also call for a renewed focus on shared services. The budget includes $225 million to fund the state’s match of savings from shared services as part of the initiative, which officials said would help reduce property taxes.
Last year, the Town of Brookhaven applied for a local government efficiency grant that put them in the running for a $20 million grant. This year, the town is also eligible for a Citizen Empowerment Tax Credit of $1 million since the village of Mastic Beach dissolved. Of that million, at least 70 percent must be used for direct relief to taxpayers.
Other legislation and marijuana
Cuomo is also urging the passage of several laws, including the Dream Act, Child Victims Act and extension of the Hire-a-Vet tax credit for two years.
During his budget address last week, Cuomo also floated the idea of funding a Department of Health study to examine the economic, health and criminal justice impacts of legalizing recreational marijuana as surrounding states have done or are considering.
“On the other hand, Attorney General [Jeff] Sessions says he’s going to end marijuana in every state, so you have a whole confluence of difference information. I think we should fund DOH to do a study,” Cuomo said. “This is an important topic, it is a hotly debated topic, pardon the pun, and it’d be nice to have some facts in the middle of the debate once in a while.”
Funding for that study was not included in the budget proposal. New York legalized medicinal marijuana in 2014.
Federal tax plan
In the budget briefing book, budget director Robert F. Mujica Jr. writes in his welcome message that this budget was difficult to prepare due to declining revenues and cuts in funding for healthcare. “The state is also grappling with the pressing need to renew our infrastructure, expand our economy, and continue to grow opportunity for all New Yorkers. It turned out, though, that closing the gap was not our biggest challenge. New York is facing an unprecedented attack by the federal government on our economy,” he said, criticizing the federal tax and jobs act.
Gov. Cuomo in his remarks slammed the plan, which he said uses states like New York and California as federal “piggy banks.” He says the plan would raise taxes and fears driving residents out of state. “It could actually accelerate ‘tax migration,’ which is a real phenomenon,” he said. “It’s a statewide problem. It’s New York City, where income taxes are high, it’s Long Island, where property taxes are high,” he said, adding that upstate faces challenges due to a more fragile economy.
In light of the federal tax plan, Cuomo is proposing a restructuring of the state tax code that would shift income tax to payroll tax, meaning employers would be taxed on wages paid, rather than employees taxed on their wages. “This shift, while dramatic, would in many ways thwart what the federal government is trying to do on loss of deductibility,” Cuomo said.
Murray is not keen on that idea. “It’s another gimmick. It won’t work,” he said in a phone call earlier this week. “If the governor was willing to do some belt-tightening and cut back on spending, he wouldn’t have to come up with gimmicks.”
Though Murray did not support the current tax plan because of the $10K cap in SALT deductions, he called on Cuomo to not wait on federal tax relief. “The ‘S’ in ‘SALT’ does not stand for federal. It stands for state. This is an opportunity for a high-tax state to lower their taxes,” he continued.
Medicaid, Murray said, is one area for money saving. “We offer more than any other state,” he said of the $70B laid out in the budget. “And there’s little restriction on who gets the benefits,” Murray added, pointing to the possibility of fraud and misuse.
Instead, Murray said, that money could be put towards both education and helping to grow the economy for young people in terms of job and business opportunities. “The more we bring in state aid, the less the burden is locally. At some point, if we don’t come through, you start losing services. We don’t want to see education get hurt,” he said. “We’ll continue to fight for all we can.”
Budget hearings are expected to start next week, as lawmakers reconcile the budget facing an April 1 deadline.
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