Gov. Cuomo Wants The Federal Government To Fill In $30B Budget Gap

The state of New York faces a budget deficit of $30 billion over the next two years because of the COVID-19 crisis, and Gov. Andrew Cuomo said Wednesday it’s up to the federal government to fill in the gap.

Without that help, Cuomo told reporters that funding for local governments and hospitals would take an enormous hit. Education will too, unless the federal bill requires states to fully fund education. His comments come a day after Senate Republicans in Washington revealed details of their latest COVID-19 relief package proposal, called the HEALS Act.

Cuomo sent a letter to the state’s congressional delegation urging them to push for $500 billion in unrestricted state aid that the National Governor’s Association is calling on Congress to pass, and he wants them to fight for a bigger budget for New York.

With no federal funding, the state will see a 20% cut to education, health care and funding for cities and counties.

“The way we did the state budget this year is we basically had a big hole financially, and then we had a hole in terms of what the revenues would be because the revenues in large part are going to be the revenues that are provided by this federal bill,” Cuomo stated.

“There have been several attempts at this federal legislation. None of them have adequately served the state of New York, and they frankly have been politically motivated and they’ve shorted the state of New York. This is the last bill that they’ll probably get done, and this is going to be the determinative bill.” – he added.

In his letter to the delegation, Cuomo noted the state has received $25,000 for every COVID-19 case while Alaska has received $2.5 million for each case.

While the Senate Republicans plan to spend about $1 trillion, House Democrats’ proposed spending bill has about a $3 trillion price tag. It’ll be up to the chambers to reach consensus. Cuomo said the state’s delegation will be led by U.S. Sen. Chuck Schumer, the Senate minority leader, and U.S. Rep. Nita Lowey, who chairs the House Appropriations Committee.

In addition to getting funding for the state, Cuomo also wants to see the final bill restore the state and local income tax exemption for federal taxes.

Cuomo told reporters that he doesn’t see a possibility to raise money and address the shortfalls, and that includes a higher tax rate on billionaires and other high-income earners. His budget director, Robert Mujica, added that the state already has a hugely progressive tax rate, with the top 2% of earners accounting for 60% of state tax dollars.

The governor noted that asking them to pay more taxes would run counter to efforts in trying to lure those individuals out of the suburbs and bring them back into New York City.

“We’re in no position to be making it harder for businesses and people to stay in New York City,” Cuomo stated.

However, some state lawmakers aren’t backing Cuomo in that assertion. State Senate Majority Leader Andrea Stewart-Cousins, D-Yonkers, said in a statement Wednesday that Albany will need to generate additional revenue to help fill the deficit and top earners will have to pitch in and help.

“We are all hurting, and this crisis calls for multimillionaires and billionaires to help our state shoulder this extraordinary burden,” Stewart-Cousins said. “While there is no single action that will solve all our problems, we shouldn’t be looking to the already overburdened working and middle class to solve the crisis.”

Stewart-Cousins’ Republican counterpart, Senate Minority Leader Rob Ortt, protested the possibility of raising taxes during an economic downturn.

“New Yorkers shouldn’t be surprised – but should be dismayed – that tax hike-loving state Senate Democrats have announced a ‘tax hike working group,’” Ortt said in a statement. “Before the pandemic, when New York faced a $6 billion deficit, all while experiencing the best economy in years, Democrats wanted to tax New Yorkers in order to spend more money.”

The hole in the state budget is just part of New York’s shortfall. The Metropolitan Transportation Authority needs $12 billion, the Port Authority of New York and New Jersey needs $3 billion and local governments, led by New York City’s $9 billion, need funding as well.

Without federal aid, MTA will have to resort to hiking fares, Cuomo added, and the Port Authority may have to stop or cut back on plans to rebuild John F. Kennedy International Airport.

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