NY facing $2.3B drop in budget revenues

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The New York Governor’s Office says the state is facing a $2.3 billion drop in budget revenues.

The Cuomo Administration is attributing much of the decline due to the cap placed on the State and Local Tax Deduction (SALT) in the new tax plan signed by President Donald Trump in 2017. The deduction allows individuals in high-tax states to deduct local tax payments on their federal tax plan. Starting in 2018, the new tax bill placed a maximum SALT deduction of $10,000.

“Big drop in state revenues is most serious fiscal shock NY has faced in years,” New York State Comptroller Tom DiNapoli said. “The disruptive impact of SALT cannot be ignored. We’re watching this revenue decline closely to determine how profound it will be on the budget.”

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Cuomo says this budget deficit will affect how much money is going to be allocated for education, Medicaid, and infrastructure.

The governor also attributed other factors to the decline to volitality in the market, IRS changes, and a bad fourth quarter in 2018.

Senate Republican Leader John Flanagan issued the following statement:

“Governor Cuomo acknowledged for the first time today that it’s not the weather that is causing New Yorkers to leave – it’s the incredibly high taxes.
 
Now, if only he would take some responsibility for those high taxes, and work with Senate Republicans and others to deliver real relief. Last month, we proposed a “Real Solutions” budget plan that would cut business taxes, energy taxes, income taxes and more, and revitalize our state’s economy. It’s a very good place to start.
 
Economists know that federal tax reforms impact high tax states with high tax policies enacted by Democrats. Governor Cuomo overlooks the fact that New Yorkers were already fleeing for Florida, Arizona, and other states that tax and spend far less than we do before this legislation was enacted.
 
Today, the Governor talked about the state’s revenues failing to meet expectations. My fear is that the Governor and the New York City Democrats who control the Senate and Assembly are going to use this as an excuse to increase taxes on hardworking, middle-class New Yorkers. We cannot allow this to happen.  
 
It’s imperative that we balance the budget without resorting to tax increases, enact the spending cap into state law, and make the property tax cap permanent to bring certainty to homeowners and seniors. Budgeting is about choices; and it’s time for Governor Cuomo and legislative Democrats to make the right ones.”

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