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Guest Column: State Sen. Tom O'Mara
“Who's going to bear the burden?”
ALBANY, Feb. 11, 2019 -- While the State Legislature holds hearings on Governor Cuomo’s 2019-2020 proposed state budget, I have wondered out loud about what’s in store for:
The loudest alarm rang last week. Governor Cuomo sat down with State Comptroller Thomas DiNapoli to announce that a steep decline in personal income tax receipts means the state faces a $2.3 billion deficit.
"The big drop in state revenues in January is the most serious fiscal shock our state has faced in years," the comptroller said.
Translated: There’s a big hole in the state’s 2019-2020 budget.
Deficits are closed in only a few ways: increase revenue (meaning higher taxes and fees), cut spending, or a combination of the two.
Among the state’s newly emboldened liberals and progressives, there will be renewed calls to “raise taxes on the wealthy.”
Except that Governor Cuomo and Comptroller DiNapoli included this nugget in last week’s announcement, “New York's tax code is highly progressive. The combined state/local tax rate for high-income New Yorkers is the second highest in the country. The top 1% of taxpayers accounts for nearly half (46%) of State Income Tax liability.” They further note that the top 20% of taxpayers pay 87% of New York income taxes.
The governor and comptroller blame the revenue drop on the federal government’s elimination of full state and local tax deductibility. Since wealthy residents already pay some of New York’s highest property taxes, their inability to fully deduct these taxes makes New York a less desirable place to live and they leave (taking their tax dollars with them), the governor argues.
While he’s not wrong, fiscal watchdogs also note other factors working against New York, including overspending, high taxes, and a lack of rainy day savings.
The alarm is this one: New York State’s revenue stream is already highly dependent on high-income earners, who account for nearly 90% of collected income taxes. If onerous tax policies drive these residents out of New York, thereby creating revenue losses that cause budget deficits, it makes sense that raising taxes on these high earners will lead to greater out-migrations and further worsen state finances.
So if raising taxes on the wealthy is off the negotiating table -- because that would be counterproductive -- where will our new state leaders turn for deficit reduction?
One financial writer framed it this way: “What is going to happen next is that the newly empowered progressives and (New York City) Mayor Bill de Blasio will argue for an increase in taxes on the wealthy to fill the gap. Others will want to plug holes with one-time revenues like lawsuit settlements or undertake other fiscal tricks that -- as the cliche goes -- kick the can down the road. Every one of these options are bad ideas.”
Which brings me right back to the concerns I have been raising from the start.
Who will most bear the burden of cuts in state spending? Who gets hit with higher taxes and fees?
Moving forward, who is going to stand behind a long-term, sustainable future for upstate, middle-class communities, farmers, small business owners, manufacturers, workers, and taxpayers?
Photo in text: State Senator Tom O'Mara
Top row (from left): Dennis Fagan, Jim Howell, Michael Lausell, Van Harp
Bottom row: Carl Blowers, David Reed, Phil Barnes, Mark Rondinaro
Dennis Fagan, Tyrone 607-292-3687
David M. Reed
Phil Barnes, Watkins Glen, 481-0482
County Clerk: Linda Compton, 535-8133
Sheriff: William Yessman, 535-8222
Undersheriff: Breck Spaulding, 535-8222
County Treasurer: Harriett Vickio, 535-8181
District Attorney: Joseph Fazzary, 535-8383
State, Federal Officials for Schuyler County
Sen. Charles E. Schumer
United States Senate
Sen. Kirsten E. Gillibrand
United States Senate
State Senator Tom O'Mara -- Chemung, Schuyler, Steuben, Yates, western Tompkins, Enfield, Ithaca (Town and City), Newfield, Ulysses(Trumansburg)
Room 812, Legislative Office Building
Assemblyman Phil Palmesano--
Steuben, Schuyler, Yates
P.O. Box 365
Odessa, New York 14869