New York will spend billions of dollars of federal funds over the next year on schools and relief for struggling businesses, tenants and landlords under a spending plan that New York’s Legislature passed Wednesday.
The state Senate passed the revenue bill early Wednesday morning with a 38-25 vote, while the 150-member Assembly passed the bill with a 88-61 vote following hours of debate Wednesday evening. Gov. Andrew Cuomo has said he’ll sign the budget.
Democrats, who won a veto-proof supermajority last year, won passage of their top — and long politically contentious — priorities, including a tax hike on millionaires and a $2.1 billion fund for undocumented immigrants and other workers who have been excluded from COVID-19 assistance.
Supporters hope the tax increase could bring in at least $2.8 billion this upcoming year and prevent the need for spending cuts in years to come. New York also plans to boost school aid by $1.4 billion.
Opponents, however, argue that the tax increases for top earners will prompt an exodus, as wealthier New Yorkers will move themselves and their businesses to more tax-friendly states like Florida.
“I have a number of clients who are corporate owners who have decided the State of New York has essentially issued them an eviction notice,” said attorney Ronald J. Rosenberg of the Garden City-based Rosenberg Calica & Birney law firm. “They have asked me about the legal and financial guidelines for relocating out of state. Fortunately, I am also admitted to practice in Florida, but as a Long Islander I am deeply concerned about this coming exodus for it will come without any kind of formal acknowledgment but, rather, a dawning recognition that there is a serious absence of future economic growth and investment in our region. The successful entrepreneur now has a fiscal target on his back.”
Kyle Strober, executive director of the Association for a Better Long Island, said Albany’s actions are driven not by budget realities but political ideology.
“Based on the billions of dollars in federal aid being funneled into New York that has been championed by Senator Schumer, it is unfathomable that Albany politicians have put into place a draconian tax structure that invites high-net-worth individuals and corporations to leave thereby shifting the burden onto the backs of Long Island’s middle class,” Strober said.
However, others on Long Island support the tax hike.
“The tax increase in the state budget is good for New York State, as wealthy corporations benefit significantly doing business here and should significantly share in the tax burden,” said Elizabeth Wellington, deputy director of the Long Island African American Chamber of Commerce. “Socially conscious corporations in New York State will view this as the right thing to do and their actions will be viewed favorable in the New York marketplace. Small business owners who are members of our chamber of commerce realize significantly less tax breaks, so it is a sound practice for larger corporations to contribute significantly more to New York State’s tax base.”
Corrinne Graham, owner of Port Jefferson-based Graham Consulting and Research, said much of the tax burden has been on lower- and middle-income earners and the state’s millionaires need to pay their fair share.
“Social responsibility is critical to successful businesses, but not necessarily a trait of millionaires who are focusing on growing their wealth and not creating a viable and equitable economic society,” Graham said. “Innovation, equity, diversity, inclusion and affordability are some of the areas that drive economies all over, not the handful who are making a fortune based on lack of competition.”
This year’s $212 billion budget is a 9.9% increase over last year’s $194.6 billion budget.