Cuomo says modifications in federal tax law will offset New York’s hikes on wealthiest residents | New York

(The Center Square) – New York Gov. Andrew Cuomo said Wednesday that the tax increases implemented on its high-end earners through the budget will be offset – and then some – when Congress restores the state-and-local tax deductions on federal taxes.

Those deductions, better known as SALT, were limited to $10,000 as part of a tax reform plan passed by the Trump administration and a Republican Congress in 2017. The governor told reporters as he talked about the 2021-22 state budget that that decision was an attack on New York and other states.

Cuomo added that he and other governors have talked with President Joe Biden about this, and that members of the state’s congressional delegation support the repeal.

“So when you talk about this tax package, you cannot talk about it without anticipating a SALT repeal, and SALT is essential to give our taxpayers fairness and relief,” the governor said.

The SALT cap costs the state $13 billion annually, Cuomo said. The tax increases in the budget, which include an increase on millionaires and new surcharges on those making $5 million and $25 million as well as an increase in the corporate income tax, are expected to raise $3.5 billion this upcoming year and $4.3 billion the following year.

The governor said there would not be any taxes on capital gains or estates.

“The feeling was that those taxes would do damage to the state and actually cost the state more money than we would raise,” he explained.

Republicans rejected Cuomo’s assertions on taxes, saying that the state increases will just lead to more high-income individuals to leave the state.

State GOP Chairman Nick Langworthy called the spending plan wasteful.

“This budget makes clear that the only way to save New York is to elect a Republican governor who will stand up to this madness and return common sense to state government,” he said.

At $212 billion, the 2021-22 spending plan is 16.5 percent higher than last year’s $177 billion budget. A portion of that increase comes from the federal government, including about $12.6 billion in funding from the recently enacted American Rescue Plan.

In a statement on the budget, state Comptroller Thomas DiNapoli said that the resources used to grow the budget are just short-term solutions and that lawmakers need to make sure they don’t let future spending get out of control.

“The state must plan for the end of emergency federal aid and use new tax resources to fund essential services, to once again begin contributing to rainy day funds and to reduce projected out-year gaps,” he said. “Long-term alignment of recurring revenues with recurring spending is essential to putting New York’s fiscal house in order.”

Some of the budget items – including the portion with the tax increases – still must be approved by the Assembly. The state Senate passed the tax increases by a 38-25 vote after a late-night session extended into early Wednesday morning.

The budget, per the state Constitution, is supposed to be passed by the beginning of the fiscal year, which starts April 1.

Both chambers though did pass a short-term emergency appropriation on Tuesday evening. Jennifer Freeman, DiNapoli’s communications director, said the comptroller did release payroll that night.

Last week, DiNapoli said the state needed to pass the budget by Monday to ensure that all state workers scheduled to receive the paycheck on this upcoming Friday would get it on time.

Because of the delay in passing the measure, Freeman said, “Some employees may have a delay in receiving their hard copy checks or direct deposit.”