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Fear of exodus over $4B in tax hikes as New York hammers out budget deal
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Gov. Andrew Cuomo and Albany lawmakers have reached a deal in principle on the overdue state budget — which includes a roughly $4 billion tax hike on the wealthy, legalizing mobile sports betting and sending unemployment benefits to illegal immigrants, sources told The Post on Tuesday.
The $212 billion budget comprised of state and federal funds, which was due April 1, dwarfs last year’s final $194 billion price tag to account for economic losses stemming from the health crisis that brought New York to a standstill.
Lawmakers began voting on bills in the state Senate and Assembly Tuesday afternoon, and the process is expected to bleed into Wednesday night as a remaining three budget bills out of ten have to be printed.
“It was our understanding that all of the budget bills have been agreed upon three way are perhaps still in some level of process, but we’ll be ready to go on the floor, probably with messages necessity,” state Senate Finance Chair Liz Krueger said on the floor of the state Senate during debate.
Cuomo and state legislators butted heads on big-ticket budget items, including the tax hike that will impose a roughly 1 percent increase on New Yorkers who make more than $1 million a year and establishes new tax brackets for the state’s highest earners.
The state’s corporate franchise tax will also rise to 7.25 percent from 6.5 percent for three years, though the rate will remain the same for companies that make under $5 million.
“This is not a tax increase on the vast, vast majority of New Yorkers,” Krueger said during the debate. “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.”
But others, including two New York City mayoral candidates, say the tax hikes will cause an exodus of much-needed revenue from the city as residents and businesses seek greener pastures in less burdensome states and cities.
Another sticking point was the “Excluded Workers Fund,” which will earmark $2.1 billion in unemployment benefits to undocumented workers who are otherwise ineligible for federal funds. The hot-button issue led to an impasse between progressive New York City Democrats and moderate Democrats from upstate and suburban districts.
The sides have also agreed to legalize mobile sports betting — which lawmakers say will increase revenue this fiscal year by $99 million and then by as much as $500 million by 2025-’26.
This year’s budget also accounts for $2.4 billion in emergency rental assistance and will give a $1.4 billion annual boost over the next three years to public schools across the state. Some $105 million will be spent to expand universal pre-K to the 210 districts that don’t already have the program in place.
Also included is nursing home reform — those facilities will now be required to spend at least 70 percent of their revenue on patient care and 40 percent on resident-facing staffing. And $64 million will go toward increasing staffing.
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