New York's Insane $175 Billion Budget Runs Into Tax Reform Shortfall
There's one word for Governor Andy "Infanticide" Cuomo's $175 billion budget. Insane.
New York is not a country. Unlike California, it doesn't have a diversified economy. Its agricultural and manufacturing sectors are starved. And New York City gets by on tourism and a few culture industries. There's no reason for these insane national budgets at a state level except that, like in California, the Dems are in charge and, like Venezuela's Maduro regime, they don't understand the concept of not spending money.
Unfortunately they're getting an introduction to the concept.
New York state is facing an unexpected $2.3 billion shortfall — the most significant in eight years — due to a sharp drop in income tax collections for December and January, state Comptroller Tom DiNapoli and Gov. Andrew M. Cuomo revealed on Monday.
It's unexpected only when you don't pay attention.
The governor, who had announced his $175 billion spending proposal for 2020 last month, cast blame on the federal government, attributing the drop largely to the 2017 federal rollback of the state and local tax deduction, known as SALT, which he said was designed to penalize Democratic "high-tax" states.
"Everything we did economically is right," Cuomo said Monday. "We tightened our belt, we cut taxes, we're creating jobs, and here's a penalty just because we are Democrats."
Last year's budget was $163 billion. Raising spending by $12 billion is not "tightening our belt".
It's not a penalty because Andy is a Democrat, directly. It's because Democrats tax people to death. And people try to avoid high taxes.
The federal tax measure, which placed a $10,000 cap on SALT deductions, went into effect last year. Cuomo said the majority of homeowners impacted chose to file their 2017 taxes early to take advantage of the benefit before the change went into effect.
Because of this, the state anticipates that the full fallout of the SALT cap will be felt in 2019.
"This is the most serious revenue shock New York has faced in many years," DiNapoli said. "And that $2.3 billion figure will frankly get worse before it gets better."
DiNapoli cited anecdotal reports of New Yorkers leaving the state or changing their primary residence and Wall Street volatility as factors in the revenue gap.
The combined state and local tax rate for high-income New Yorkers is the second highest in the nation. Due to New York's progressive tax structure, the top one percent of earners account for nearly half of the state's income tax revenue.
Those are the same New Yorkers impacted by the SALT cap, according to Cuomo.
So next year, the budget will be $200 billion and the revenue shortfall will be $10 billion and Andy will whine some more.