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Senate Leader cool to taxing the wealthy to close deficit

Karen DeWitt
WRVO News (file photo)

The leader of the New York state Senate said she does not think there will be new broad-based taxes on the wealthy to close the state’s multi-billion dollar budget shortfall. Sen. Andrea Stewart-Cousins' remarks come as a liberal leaning think tank is issuing a report that finds New York has the highest level of income inequality in the nation.

Stewart-Cousins, speaking to reporters during a break in two day retreat with her Democratic members Monday, said she’s "extremely concerned" with a projected $3 to $4 billion Medicaid shortfall that has led Gov. Andrew Cuomo’s budget office to recommend delaying a Medicaid payment to providers later this fiscal year, and to cut reimbursements for hospitals and nursing homes. 

But the Democratic leader said raising income taxes on the wealthy is not the first option.

"Our first fall back isn’t ‘let’s raise taxes,’" said Stewart-Cousins, who said her Democratic members approved a permanent 2% property tax cap earlier this year. "We know how the burden of taxes on middle class and low income New Yorkers is very difficult".

Earlier this year, the Senate, along with the Assembly and governor, made permanent a 2% per year cap on the growth of property taxes in the state.

Stewart-Cousins represents portions of Westchester County, one of the most highly taxed regions in the state, and her conference includes several Senators in other high tax areas, including Long Island.

The Senate leader said while it’s likely that lawmakers will legalize the adult use of recreational marijuana in 2020, any revenues from the sale of the drug would not come fast enough to fill the current budget gap.

Stewart-Cousins said right now she’s not ruling out anything, though, including spending cuts.

"We have to be able to look at a myriad of possibilities, said Stewart-Cousins, who said the deficit is "serious and it seems to be growing."

Assembly Speaker Carl Heastie has said he’s open to raising revenues, and did not rule out raising taxes on the wealthy. Gov. Cuomo has not been a supporter of increasing taxes on the rich. The governor said he’ll reveal his proposed solution to the problem in January.

On the same day that the Senate Democrats held their meeting to decide on 2020 priorities, the Fiscal Policy Institute, a think tank funded by labor unions, religious groups, and advocates for the poor, issued a report that finds New York has the most unequal distribution of income of any state in the nation.

FPI’s Ron Deutsch said not since the so called "gilded age" of the 1920’s has there been such a vast divide between the highest- and lowest-income New Yorkers. The report finds that the top 1% of all New Yorkers gained one-third of total income in the state. Without intervention, the reports said that gap is expected to grow.

Deutsch said increasing taxes on those most able to afford to pay would help.

"We have a lot of glaring needs in New York that we need to address," Deutsch said. "And the best way to do that is to raise revenue in a responsible way and ask those who have benefited the most over the years to pay a little bit more."

Deutsch said Cuomo’s self-imposed 2% spending cap during the past several years has been harmful. The governor has often allowed a greater than 2% increase in spending on health care and education from year to year, but that’s led to cuts of up to 26% in other state programs that deal with social services, Deutsch said.

"We need to reverse this trend," he said. "We can’t continue down this road of austerity spending."

The chair of the state’s Republican Party, Nick Langworthy, disagrees. He said he believes the answer to the growing budget gap is to cut spending.

"We have ridiculously generous Medicaid benefits in this state, "said Langworthy, who said it needs to be "right-sized."

He said Texas and Florida, two states that are growing in population, spend less combined on Medicaid than does New York.

Langworthy said Democrats have an "addiction to spending" and he’s not surprised that some reach first to new taxes as a remedy.

Adding to the pressure for lawmakers, the State Board of Regents voted Monday to recommend that New York increase its spending on schools by an additional $2 billion.

Karen DeWitt is Capitol Bureau Chief for New York State Public Radio, a network of 10 public radio stations in New York State. She has covered state government and politics for the network since 1990.