The leader of the State Senate says she does not think there will be new broad-based taxes on the wealthy to close the state's multi-billion dollar budget shortfall. Senator Andrea Stewart-Cousins' remarks come as a liberal leaning think tank is issuing a report that finds New York has the highest level of income inequality in the nation.
Speaking to reporters during a break in a two-day retreat with her Democratic members, Stewart-Cousins says she's "extremely concerned" with a projected $3 to $4 billion Medicaid shortfall that has led Gov. Andrew Cuomo's budget office to recommend delaying a Medicaid payment to providers later this fiscal year, along with cutting reimbursements for hospitals and nursing homes.
But the Democratic leader says raising income taxes on the wealthy is not the first option.
"Our first fall back isn't 'let’s raise taxes'," said Stewart-Cousins, who mentioned her Democratic members approved a permanent 2% property tax cap earlier this year. "We know how the burden of taxes on middle class and low income New Yorkers is very difficult."
Earlier this year, the Senate, along with the Assembly and governor, enacted a permanent 2% per year cap on property tax increases.
Stewart-Cousins represents portions of Westchester, one of the most highly taxed regions in the state, and her conference includes several Senators in other high tax areas including Long Island.
The Senate leader says while it's likely that lawmakers will legalize the adult use of recreational marijuana in 2020, any revenues from the sale of the drug would not come fast enough to fill the current budget gap.
Stewart-Cousins says right now she's not ruling out anything, though, including spending cuts.
"We have to be able to look at a myriad of possibilities," said Stewart-Cousins, while pointing out the deficit is "serious and it seems to be growing."
Assembly Speaker Carl Heastie has said he's open to raising revenues, and did not rule out raising taxes on the wealthy. Cuomo has not been a supporter of increasing taxes on the rich. The governor says he'll reveal his proposed solution to the probem in January.
On the same day that Senate Democrats held their meeting to decide on 2020 priorities, the Fiscal Policy Institute, a think tank funded by labor unions, religious groups, and advocates for the poor, issued a report that finds New York has the most unequal distribution of income of any state in the nation.
FPI’s Ron Deutsch says not since the so called "gilded age" has there been such a vast divide between the highest- and lowest-income New Yorkers. The report finds that the top 1% of all New Yorkers gained one-third of total income in the state. Without intervention, the reports says that gap is expected to grow. Deutsch says increasing taxes on those most able to afford to pay would help.
"We have a lot of glaring needs in New York that we need to address," Deutsch said. "And the best way to do that is to raise revenue in a responsible way and ask those who have benefited the most over the years to pay a little bit more."
Deutsch says Cuomo's self imposed 2% spending cap during the past several years has been harmful. The governor has often allowed a greater than 2% increase in spending on health care and education from year to year, but that's led to cuts of up to 26% in other state programs that deal with social services, Deutsch says.
"We need to reverse this trend," he said. "We can't continue down this road of austerity spending."
The chair of the state's Republican Party, Nick Langworthy, disagrees. He believes the answer to the growing budget gap is to cut spending.
"We have ridiculously generous Medicaid benefits in this state," said Langworthy, who said it needs to be "right-sized."
He says Texas and Florida, two states that are growing in population, spend less on Medicaid combined than New York.
Langworthy says Democrats have an "addiction to spending" and he's not surprised that some reach to new taxes first as a remedy.
Adding to the pressure for lawmakers - the New York State Board of Regents voted Monday to recommend that New York increase it's spending on schools by an additional $2 billion.
