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A closer look at Cuomo's tax-cut math
Gov. Andrew M. Cuomo’s $2-billion tax cut proposal announced this week is built on a surplus at a time the state still has a deficit, is based on assumptions which some financial analysts find shaky, and spreads out much of the promised benefits over several years.
“Based on the available numbers, it doesn't come close to adding up,” said E.J. McMahon, president of the Empire Center for Public Policy.
“The question remains, how is this going to be affordable?” said Elizabeth Lynam of the independent Citizens Budget Commission. The state’s latest cash report also found state revenues running $590 million below budgeted expectations in November.
Incoming tax revenues were also running behind under the November cash report by state Comptroller Thomas DiNapoli.
On Monday, Cuomo unveiled his tax cut proposal which will be a major element of his State of the State speech Wednesday and his 2014 re-election campaign.
“Over the past three years, we have made unprecedented progress toward curbing the rise of taxes and government spending in New York, transforming a state budget with a $10 billion deficit to a $2 billion surplus,” Cuomo said Monday.
But the Cuomo administration’s own midyear financial plan still projects a $1.7 billion deficit at end of the fiscal year on March 30. The surplus won’t materialize until the 2016-17 fiscal year, according to Cuomo’s tax commission report last year.
That $2 billion tax cut is built on a $2 billion-a-year temporary income tax increase on millionaires due to expire in 2017.
But the so-called millionaire’s tax opposed by Cuomo in the 2010 campaign was extended a second time in the spring — avoiding action this election year --_ during closed door budget negotiations with legislative leaders.
The state is also counting on winning a dispute with the federal government that involves more than $1 billion.
In two weeks, Cuomo’s 2014-15 executive budget proposal will put numbers behind the rhetoric.