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Gun Control

New York Gov. Andrew Cuomo meets with gun safety advocates in the Red Room during a news conference at the state Capitol on Tuesday, Jan. 29, 2019, in Albany, N.Y. (AP Photo/Hans Pennink)

Gov. Andrew Cuomo and New York's top fiscal officers revealed a steep revenue decline over the last several weeks that could lead to changes in the state budget. 

Cuomo, along with state Comptroller Tom DiNapoli and Budget Director Robert Mujica, announced Monday that state personal income tax receipts are $2.3 billion below projections. The revenue decline was first noticed in late December and continued through January. 

During that period, the state usually receives 39 to 46 percent of its personal income tax receipts. However, the state only received about 30 percent of the revenue over the past month or so. 

"This is worse than we had anticipated," Cuomo said. 

Cuomo blamed the revenue decline on several factors. However, he emphasized the impact of the $10,000 cap on state and local tax deductions that was included in the federal tax law signed in 2017. The law took effect last year, which means the state is seeing the impact of the cap for the first time. 

The cap on state and local tax deductions has long been criticized by Cuomo. New York joined other states in challenging the constitutionality of the provision, and the governor warned last year that it could impact the state's finances. 

At the press conference in Albany Monday, he reiterated his opposition to the cap. He called it a "diabolical political maneuver" that targeted high tax states, which tend to be more Democratic. He claimed other states that are more reliant on state and local tax deductions have lost revenue. 

DiNapoli echoed Cuomo's critique of the cap, but added that the financial figures could improve over time. 

"This is the most serious revenue shock that the state has faced in many years," DiNapoli said. 

The potential solutions are less clear. Cuomo urged Congress to act and repeal the cap on state and local tax deductions, but that's unlikely to pass in a divided Legislature. And it would be a significant change to President Donald Trump's signature legislative achievement, which reduces the prospects even more that such a change would happen. 

The revenue drop was announced a few weeks after Cuomo outlined his $178 billion 2019-20 state budget proposal. He has many priorities he wants to fund, including education, health care and infrastructure. 

One possible change he ruled out is additional tax relief. Reducing tax rates, he said, would make the problem worse. He boasted about the state's progressive tax structure, but acknowledged that the wealthiest New Yorkers produce nearly half of the state's personal income tax revenues. 

With the cap on state and local tax deductions in place, Cuomo claimed tax rates for a high-income earner in New York City increases by nearly 12 percent. 

"SALT encourages high-income New Yorkers to move to other states," he said. "Even if a small number of high income taxpayers leave the state, it would harm state revenues." 

While more revenue is needed, Cuomo doesn't believe it should come from the richest New Yorkers. 

"I think that would be the exact worse thing to do right now," he said. "I think it would exacerbate the problem." 

Cuomo's announcement comes as state lawmakers are holding budget hearings. The state Legislature, which is controlled by Democrats, will pass one-house budget bills next month. 

The governor and state legislative leaders hope to have a budget agreement in place by March 31. 

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Online producer Robert Harding can be reached at (315) 282-2220 or robert.harding@lee.net. Follow him on Twitter @robertharding.

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