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Assembly Speaker Carl Heastie said Wednesday that he expects the state to enact a middle class tax cut this year and to again extend a recession-era income tax surcharge on the wealthiest New Yorkers.
“When we look at trying to have a more fair tax structure and building in a middle-class tax cut, that’s one of the pieces of it,” Heastie (D-Bronx), told reporters after he opened the 2016 Assembly session. “We have a plan, I don’t want to give the specific details of the dollar figures or where it is, but that’s kind of where we’re moving to.”
Heastie said Albany leaders want to again extend the temporary, emergency surcharge on New Yorkers making over $1 million a year. The surcharge was enacted during the recession by former Gov. David Paterson and the Legislature as an emergency measure in the face of deep losses in tax revenue. Although Andrew Cuomo as a candidate in 2009 vowed to let the tax increase lapse and once said extending it would be akin to a tax increase, it’s been extended twice since then.
It is now due to expire next year, along with more than $2 billion in raises to make balancing the state budget easier. Critics of the tax surcharge said it drives employers away from New York.
The state also has a projected surplus and more than $1 billion remaining from enforcement settlements won by Attorney General Eric Schneiderman against major corporations.
The surcharge is scheduled to sunset next year, after this election year. It has been added to budgets in closed-door negotiations with Cuomo and legislative leaders.
“We know this is coming up next year and we’d like to see the tax rates go down for the middle class families coupled with asking the wealthy New Yorkers who can give a little more,” Heastie said.
He said the surcharge could be increased, or it could apply to more or fewer top earners. He said it will part of negotiations for the state budget, due by April 1, along with small business tax cuts proposed by Cuomo and the Senate’s Republican majoritiy.
“It depends on where you start,” Heastie said. “Do you start at $2 million? Do you start at $1.5 million? Do you start at $1 million? A lot of those factors will be in play.”
Gov. Andrew M. Cuomo is scheduled to present his budget proposal to the Legislature next week.
There was no immediate comment from Cuomo or the Senate’s Republican majority.