Gov. Andrew Cuomo and state Comptroller Thomas DiNapoli held a news conference last week to alert New Yorkers to a budgetary problem that the governor likened to a “heart attack.”
The state has experienced a bigger-than-expected shortfall in tax revenue, and as a result a $2.3 million budget deficit has developed.
But rather than dive into potential solutions to this deficit, Cuomo chose instead to focus on what he views as the major culprit for this deficit: the federal tax law changes made in 2018 by President Donald Trump and the Republican-controlled Congress. The governor said the newly imposed federal limits on state and local tax deductions are driving high earners out of New York state. He urged the state’s congressional delegation to prioritize getting the deduction limits removed.
While the governor’s call for changing this aspect of federal tax law makes sense, he is being disingenuous to claim that it’s the major cause of the state’s budget deficit. His partner at last week’s press conference, DiNapoli, pointed to another huge factor for New York state: the horrendous performance of the stock market in the final quarter of 2018. As the home of Wall Street, New York’s tax revenues have always been more reliant on the performance of equity markets than other states.
Gov. Andrew Cuomo and New York's top fiscal officers revealed a steep revenue decline over t…
The bigger problem with Cuomo’s fixation on the federal tax law is that he instead should be putting much more public energy into discussing possible ways to close the New York budget deficit. No matter how successful he is trying to get federal tax law changes, nothing can be done on that front to address the acute budget crisis for this year.
As the governor gets ready to put forward budget proposal amendments and state legislators dive into finalizing the spending and taxing plan for 2019-20, the focus needs to be squarely on what New York programs can be cut and what taxes and fees, if any, should be added. Time wasted on railing about Trump and Congress could result in damaging state budget decisions that are made without adequate public input.
The Citizen editorial board includes publisher Rob Forcey, executive editor Jeremy Boyer and managing editor Mike Dowd.