New York reaches $212 billion budget deal that would raise taxes on high earners
Governor Andrew Cuomo and lawmakers in New York have reached a deal on $212 billion state budget package that will legalize online sports betting online and raise taxes on high earners.
Provisions in the package include initiatives to help the state recover from the COVID-19 pandemic – but critics argue that the tax hikes could cost New York City tax revenue as high earners flee to lower-tax areas.
The tax increases are estimated to generate more than $4 billion in additional revenue each year until 2027 while the state significantly increases spending, The New York Times reported.
The personal income tax rate would increase from 8.82% to 9.65% for people who make more than $1 million a year – and couples who make more than $2 million.
The eleventh-hour budget would also create two new income brackets that would tax people who make more than $5 million at 10.3% and those who make more than $25 million at 10.9%, the outlet reported.
Rich New Yorkers would effectively be taxed higher than any other state, including California, after tópico and state personal income tax rates are combined, according to the Times.
Lawmakers in New York have reached a deal on $212 billion state budget package that would legalize online sports betting online and raise taxes on high earners
Embattled New York Gov. Andrew Cuomo praised the budget deal in a statement released Tuesday afternoon
Now gambling smartphone apps will be allowed to bid for gaming licenses as mobile sports betting is expected to bring in nearly $500 million a year to New York
New York State would also increase the corporate franchise tax for businesses that bring in more than $5 million in annual income from 6.5% to 7.25% until 2024, , the New York Post reported.
The increase in taxes will help cómputo the books for increased spending.
The package includes $2.3 billion in federal funds to help tenants with rent and $1 billion in grants and tax credits for small businesses hit hard by the coronavirus pandemic, outlets reported.
It also creates a $2.1 billion fund to give a one-time check to illegal immigrants who did not qualify for federal stimulus checks or unemployment benefits, The New York Times reported.
The New York Post reported that the undocumented workers could each receive as much as $15,600 each in unemployment benefits or $3,200 if they have only partial proof of New York residency before March 27, 2020.
The program initially included ex-cons but sources told the New York Post that those provisions are no longer included.
The deal gives homeowners who make under $250,000 some property tax relief and earmarks $250 million for the NYC Housing Authority – which provides affordable housing to people with low and moderate income.
It also includes $100 million to convert hotels and other vacant property into affordable housing, the Times reported.
Cuomo praised the budget deal in a statement released Tuesday afternoon, the Daily News reported. The late budget had been due on April 1 – causing thousands of paychecks for state employees to be delayed.
‘Thanks to the state’s strong fiscal management and relentless pursuit to secure the federal support that the pandemic demanded, we not only balanced our budget, we are also making historic investments to reimagine, rebuild and renew New York in the aftermath of the worst health and economic crisis in a century,’ Cuomo said.
Democrat Liz Krueger, chairwoman of the finance committee in the State Senate, said that the tax increases are expected to affect 50,000 taxpayers.
‘This is not a tax increase on the vast, vast majority of New Yorkers,’ Krueger said.
‘It’s a relatively small, approximately 50,000 taxpayers who are on the wealthiest end of the scale, even during a pandemic and economic meltdown.’
The budget deal will also authorize mobile sports betting removed proposals to speed up casino development near New York City, The New York Times reported.
Mobile sports betting is expected to bring in nearly $500 million a year to New York, outlets reported.
Now gambling smartphone apps will be allowed to bid for gaming licenses. Lawmakers had previously sought to allow casinos to host mobile betting operations which would then pay fees to New York State.
Democrat Sen. Joseph Addabbo Jr. sponsored the legislation and said betting could begin in time for ‘the start of the NFL season,’ according to the New York Post.
State Assembly Speaker Carl Heastie, a Democrat, told the New York Daily News that package would benefit all New Yorkers.
‘Budgets are a statement of values, and in my two decades of service to the people of New York I can’t think of a more far-reaching and impactful budget than this,’ Heastie said.
Democratic mayoral candidates Andrew Yang and Ray McGuire, a former Citigroup executive, have said that New York City could lose revenue as high earners flee the tax hikes, the New York Post reported.
Republican Party chairman Nick Langworthy called the budget ‘woke insanity.’
‘Democrats are about to pass a budget that raises taxes on New Yorkers and businesses by $4 billion while enacting a $2 billion fund that will provide $25,000 payouts to illegal immigrants,’ Langworthy told the Times on Tuesday.
Andrew Rein, the president of the fiscal watchdog group Citizens Budget Commission, told the Daily News that ‘the tax increases simply are unnecessary and economically risky.’
‘Additionally, the tax increases both provide incentive for highly taxed New Yorkers to leave or not return to the state, and increase the cost of doing business here,’ Rein said.
Rein told the New York Post that President Joe Biden’s $1.9 trillion COVID-19 relief package set aside $12.6 billion to bail out the state but lawmakers failed to ‘appropriately leverage the opportunity provided by the infusion of funds.’
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