Tax increases, unemployment insurance tax relief absent in New York budget

Tax increases, unemployment insurance tax relief absent in New York budget

(The Center Square) – The state budget New York lawmakers approved and Gov. Kathy Hochul signed into law over the weekend does not include any tax increases.

FILE - NY Kathy Hochul 10-5-2021
New York Gov. Kathy Hochul talks to reporters Oct. 5, 2021, in the Red Room at the state Capitol in Albany.Mike Groll / Office of Gov. Kathy Hochul

However, the Democrat who will run for election this fall said the “once-in-a-generation” spending plan creates opportunities for all residents as the state emerges from the COVID-19 pandemic.

“We are investing in the industries of the future, the job skills training New Yorkers need to succeed, the small businesses that are the backbone of our economy, and the digital infrastructure needed today,” the governor said.

At $220 billion, the 2022-23 budget is $8 billion more than lawmakers and former Gov. Andrew Cuomo agreed to last year. That budget, which was $35 billion more than the 2020-21 budget, included tax increases on high-income earners. Those tax increases from last year will likely continue through 2027.

The administration also pointed out that the budget expedites a $1.2 billion tax cut for middle-class New Yorkers. It includes up to $250 million in tax credits for small businesses that incurred COVID-19 expenses, among other tax relief programs.

Hochul believes the budget sets up New York for a post-pandemic boon; others are skeptical.

“The deal’s $220 billion price tag includes a double-digit hike in state-operating spending – the dollars the state must raise on its own – for recurring expenditures subject to unpredictable growth. That means taxpayers are being set up for a hard fall. Unsustainable spending can only result in abrupt service cuts or counter-productive tax hikes,” Peter Warren, the director of research for the Empire Center, said in a statement.

The budget’s tax credits and cuts for small businesses will help businesses defer costs they incurred to accommodate for social distancing requirements, purchase and install new ventilation equipment, and buy equipment to allow for contactless sales, among other things.

Hochul, in a statement, said the business and individual tax relief initiatives were designed to ensure “this historic budget leaves no one behind.”

However, a leading business organization said it could not believe the state could not find any funding to address its unemployment shortfall.

That means the $9 billion deficit caused by pandemic-related unemployment will fall on the businesses.

Ashley Ranslow, state director of the National Federation of Independent Business-New York, said the tax cuts and other moves will help businesses. The seven-month gas tax holiday is one of those moves. However, Ranslow said the group has been pleading with Albany to address the unemployment shortfall.

“New York state’s public policy decisions on COVID shutdowns and restrictions, not independent business decisions, led to mass layoffs,” Ranslow said in a statement. “Instead of the state stepping up to the plate, elected leaders are leaving small businesses on the hook. With a staggering $220 billion budget, it’s unconscionable that there isn’t a single cent dedicated to Unemployment Insurance tax relief. The small business tax credits and programs being hailed by lawmakers are sorely diminished by New York’s inaction on UI, and the devastating UI tax bills will continue growing as the state stands by and does nothing.”

Also from the Roosevelt Island Daily News

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