Without Tax Relief, New York’s Recovery is at Risk
When Governor Cuomo released his initial budget proposal, it froze New York’s middle class tax cuts. The justification was that we did not know much federal aid the state would receive in the new stimulus package. As it turned out, New York is set to receive more than $23 billion from the relief package which was passed by Congress. State government will receive $12.7 billion and local governments will receive $10.6 billion. As the Empire Center’s EJ McMahon rightly stated in a recent commentary, “Thanks to President Biden’s stimulus and a booming stock market, Albany is now awash in cash — a surplus, in fact.”
The help from Washington is good news for New York and its taxpayers. We believe that the justification for freezing the middle-class tax cut no longer exists. Therefore, we believe that the middle-class tax cut should be restored in this year’s budget. A recent survey by WalletHub finds that New York has the 49th worst tax rate ranking in the United States. Only taxpayers in Connecticut and Illinois face a higher state and local tax rate.
Considering the extraordinary hardships that middle class New Yorkers have faced during the pandemic, freezing the previously enacted tax cut is unconscionable and unnecessary. Even before COVID-19 swept across New York, the state’s sky-high tax burden was problematic. Over the last decade, more than 1.4 million New Yorkers have fled to states with lower tax burdens according to U.S. Census Bureau data. Now, more than ever, working men and women across this state need help – not more headaches.
While there will certainly be the temptation to use generous stimulus money to increase spending on special interests, state officials must resist these calls and take action that will help millions of overburdened taxpayers. Washington’s $23 billion package is a one-time lifeline. It must be spent in a way that spurs New York’s recovery over the next several years. There will be no recovery without relief. In order to rebuild our economy, revive our communities and restore hopes for the future, we must ease the tax burden on middle-class families now.
Justin Wilcox is Executive Director of Upstate United. Upstate United is a non-partisan, pro-taxpayer, pro-economic growth and pro-Upstate education and advocacy coalition made up of business and trade organizations from across Upstate New York.