Heastie expects Albany will raise income taxes as early as this month

ALBANY — Assembly Speaker Carl Heastie said Monday he expects an increase in the state income taxes to be approved as soon as this month to contend with billions of dollars in revenue losses from the economic shutdown prompted by the spread of COVID-19.

He wouldn’t say how much of a raise is being discussed.

Heastie (D-Bronx) said other taxes and measures to raise revenue could be approved when the regularly scheduled legislative session begins Jan. 1. But he said the law appears to require more notice to New Yorkers before the State Legislature and governor increase the income tax and for it to be applied to wages earned in 2020.

"I think it would be safest to consider it before the change of the year," Heastie said.

Hours later, Cuomo said he still wants to wait to until he proposes a budget after Jan. 1 to enact any tax increase.

"It would be chaos and disruption," Cuomo said. "You have to do a tax increase in the context of a budget … otherwise, it is just a political gesture … I don’t believe Washington is going to give us nothing."

Cuomo has for months said the state will need to increase taxes, borrow and reduce funding if the federal government doesn’t provide billions of dollars in aid. But so far, the Trump administration and the U.S. Senate’s Republican majority have refused. President-elect Joseph Biden hasn’t committed to the massive aid that Cuomo seeks for states and local governments.

Cuomo has said New York faces a $30 billion deficit for state government, the Metropolitan Transportation Authority and state aid to local governments and schools over the next two years. The state operates on a $177 billion annual budget and the 2021-22 budget is due April 1.

Cuomo on Monday didn’t address Heastie’s concern that an income tax might legally have to be done this month or face court challenges if it’s added to the budget deal in April.

Senate Majority Leader Andrea Stewart-Cousins didn't commit to either path. "We are working with our partners in the Assembly to make sure whatever action we take helps to address the severity of the crisis at hand," she said.

Heastie’s comments were immediately criticized by the Republicans in the State Senate and Assembly, although under Albany’s rule the minority conferences have little power to stop legislative action by the Democratic majorities.

Assembly Republican leader Will Barclay called Heastie’s comments "discouraging."

"We've seen the crushing impacts of COVID and ensuing lockdowns since March," Barclay said. "If we're calling an emergency tax-hike session, where is the urgency for small-business relief, proposals to raise revenue without raising taxes, or finally reining in the governor's unchecked authority? There's a number of things we can do. Making sure the nation's highest tax burden gets a little bit higher shouldn't be one of them."

Senate Republicans also seized on the call for tax increases in a special session this month.

"New York is already one of the highest-taxed states in the nation. Raising taxes will only lead to more New Yorkers heading for the exits," said Candice Giove, spokeswoman for the Senate’s Republican conference.

The independent Citizens Budget Commission warned that further taxing of the wealthiest New Yorkers, which is proposed by much of the Assembly’s Democratic majority, may come with a price for the state.

"New York's leaders must seriously consider the risk that wealthy New Yorkers leave the state, taking their important share of state taxes with them," said commission’s president Andrew Rein. "If just 1% of the top 1% that leaves, it will cost New York State approximately $200 million."

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.