Andrew Cuomo’s argument for additional authorities bailouts is predicated on incorrect math

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Andrew Cuomo's argument for further government bailouts is based on incorrect math

The results of this week’s Georgia Senate runoff elections, which assured the Democrats will soon control both Houses of Congress and the White House, should bring Governor Andrew Cuomo great relief.

Cuomo has spent the past nine months accepting, expecting, and ultimately hoping, a new billion dollar infusion of unrestrained federal aid – on top of the billions sent to the Empire State back in March last year through a $ 2 trillion CARES incentive were directed.

Senator Mitch McConnell and his Republicans had campaigned against “bailouts in the blue state”. If the GOP had retained a Senate majority, the Democratic governor of New York would have been forced to face a financial crisis made worse by his delaying tactics since the pandemic began.

But based on the governor’s sour tone the day after Tuesday’s election, you’d never have thought he’d just heard very good news. In remarks that would soon be overshadowed by the Capitol uprising, Cuomo claimed that federal policy since 2016 “stole” the Empire State and turned New Yorkers into “crime victims” eligible for government compensation.

The governor turned his anger on a popular target: President Trump’s tax reform bill, passed in late 2017.

Cuomo claimed that the new tax law “increases our property taxes by $ 4 billion a year” and “increases the property taxes of the average family”. . . [by] $ 2,600 per year for three years. “He went on to say that the tax bill had” cost New Yorkers $ 30 billion “over the past three years. “We now have a deficit of $ 15 billion,” he added. “You took $ 30 billion. We must get at least $ 15 billion this year to cover our deficit. “

All of that was and is just wrong.

In fact, New Yorkers’ total income tax payments fell by $ 3.4 billion in 2018, according to the Internal Revenue Service. At this rate, the three-year impact of the Trump tax legislation will not be a $ 30 billion tax hike, but a $ 10 billion savings for New York residents.

As for New York’s current budget needs, the state does not currently have a deficit of $ 15 billion. As of October 31, Cuomo’s own update of the financial plan for the fiscal year ended March 31 showed a gap closer to $ 8 billion.

Of course, that’s still huge. Based on the unexpectedly high tax revenue through September, state auditor Thomas DiNapoli credibly predicts that revenue this year will be $ 3.8 billion higher than the governor’s last estimate, bringing the hole to $ 4.2 billion Dollar would reduce.

The additional stimulus package passed by Congress in December will provide Albany with a budget relief of at least $ 4 billion in the form of an additional K-12 school grant (technically subject to a maintenance provision envisaged by the Biden administration) certainly do without if Cuomo demands it).

Between that extra federal money, improved revenue prospects, and maybe $ 2 billion or more in as-yet-unrecognized budget relief from the CARES bill, it’s likely the state will have no deficit, if not a small surplus – that is, for now.

For fiscal year 2022, which begins April 1, Cuomo’s financial plan points to a historically large gap of $ 16.7 billion. Even assuming the number is a bit inflated, the combined effects of the pandemic recession and Cuomo’s failure to cut spending seem to have left the state with a “structural” gap of $ 8 billion to $ 12 billion – or worse, if economic recovery is hampered by a new wave of regulations and taxes from Albany.

Any help in Biden’s expected stimulus plan will only postpone Albany’s tax rebate for another year or two. Assuming he seeks and wins a fourth term in 2022, Cuomo could relive the experience of 2011, his first year as governor, when he had to fill a $ 10 billion gap after President Barack Obama’s stimulus aid expired.

If Cuomo wants a better federal deal for New York on a variety of issues, from taxes to health care to infrastructure, he needs to stop rushing and convince his Democrats in Washington that it is in the national interest.

After all, Washington’s Trump-era policies, to whatever extent they were directed against New York’s interests, were not “theft” but democracy in action – which fortunately has resumed in our nation’s capital.

EJ McMahon is an Adjunct Fellow at the Manhattan Institute and a Senior Fellow at the Empire Center. Twitter: @EJMEJ