New York State will need to raise taxes to cope with the budget chasm left by caring for COVID patients and the damage done by the economic shutdown, Governor Andrew Cuomo said on 9 December.
The speaker of the state assembly and the senate’s majority leader, both Democrats, have agreed with Cuomo’s assessment. Republicans in the legislature have warned that tax hikes would drive higher-income residents out of the state.
Neither the governor nor his aides specified which taxes would be raised.
The state’s budget office has estimated the pandemic and shutdown has cost the state $13.5 billion so far.
Earlier this year, the state legislature passed a $178-billion budget predicated on federal aid legislators assumed would be forthcoming but, so far, has not.
The budget also depends on the state’s personal income tax for about $60 billion in the current and new budget years, before refunds.
The new budget gives the state authority to withhold payments to local governments, schools, and social service agencies if the state does not receive federal aid.
The new state budget will not be altered until federal relief arrives, both Cuomo and Democrats in the state legislature have pledged.
New York is projecting an $8.7-billion deficit in its fiscal year beginning next 1 April. However, that figure could double; next year’s budget assumes the state will find $8 billion in permanent annual savings this year, which has not yet happened, according to David Friedfel, Director of State Studies for the nonpartisan Citizens Budget Committee.
TREND FORECAST: As we have forecast, a key platform of newly-forming political parties will be Anti-tax. For example, with schools closed and learning online, taxpayers will demand sharp decreases in school taxes. Far fewer teachers will be needed, and all costs related to brick-and-mortar school buildings will be substantially lower, thus, taxes should be cut.
Overall, with businesses going bust and tax revenues decreasing, governments will attempt to raise taxes to make up for the shortfall. With people earning less and economically distressed, they will rise up against governments raising taxes.
The political line will be that they are “taxing the rich” while in reality, they will be raising sales taxes, gasoline, liquor, cannabis, cigarettes… and any other taxes they can squeeze from the plantation workers of Slavelandia.
