The nation looks to President Joe Biden for healing and revitalization. And New York looks to him — and the new U.S. Congress — for hope, help and, perhaps most important, billions of dollars.
Gov. Andrew M. Cuomo’s budget presentation Tuesday made clear just how much New York is relying on the federal government. Cuomo has rightly chosen a two-pronged ask of federal officials, seeking $15 billion in federal COVID-19 relief funds and demanding a repeal of the $10,000 cap on SALT — or state and local tax — deductions.
It’s been a difficult four years for New York, as former President Donald Trump and the Republican-led U.S. Senate targeted blue states with damaging policies.
Getting enough money from the federal government to avoid spending cuts, new taxes and other budgetary maneuvers — and repealing SALT — will require leadership from Biden, House Speaker Nancy Pelosi and new Senate Majority Leader Chuck Schumer. Schumer is right that a SALT repeal won’t be easy — but he must make it clear to the White House that this is an urgent priority.
Cuomo and budget director Robert Mujica are projecting a $15 billion budget gap over the next two years. Some critics note that the state’s deficit may not be as bad as state officials claim. And according to state Comptroller Thomas DiNapoli, state tax receipts for December were higher than December 2019.
But DiNapoli is correct when he says fiscal challenges remain. There are too many unknowns. So, sticking with the current deficit projections, and finding ways to close the gap, is the pragmatic approach.
Yet, there’s a bit of whiplash in Cuomo’s presentation of two wildly divergent scenarios this week. His budget is based on what he called the "worst-case," which assumes federal officials will provide just $6 billion. To make up the difference, Cuomo combines new revenue sources from the legalization of marijuana to mobile sports betting with items about which he is more reticent, including a new income tax on very high-wage earners, worrisome spending cuts to education and health care and additional withholding of funds across the board, including to key agencies like the Metropolitan Transportation Authority.
The more rosy budget picture assumes the federal government gives New York $15 billion, and gives all of it to the state to distribute. That funding, Cuomo says, would allow the state to avoid any new taxes, increase school funding significantly, provide new child care programs and housing opportunities, and issue a slew of tax credits to restaurants, theaters and others hit hard by the pandemic. It all sounds good, but it’s worth a careful look at the details, to make sure such spending, and the reliance on a one-time federal boost, doesn’t put the state back in a budgetary hole in a year or two.
If federal dollars don’t come through, there will be tough decisions and political debates to come.
— The editorial board