Governor Cuomo is the latest in a growing list of public officials in high-tax states to express alarm that big earners are departing their states for ones with lower taxes, as new data suggests. “SALT encourages high-income New Yorkers to move to other states. Even if a small number of high income taxpayers leave the state, it would harm state revenues.” In a press conference this week with State Comptroller DiNapoli and State Budget Director Mujica, the Governor at least partially blamed the $2.3 billion state shortfall on the new federal tax law. (That’s in addition to the $500 million in tax receipts that did not materialize at the end of last year and were factored into the Governor’s $175.2 billion 2019-20 budget proposal.) Cuomo warned that “With state personal income tax receipts are $2.3 billion below projections, this is worse than we anticipated.” DiNapoli added: “This is the most serious revenue shock that the state has faced in many years.”
There has been a steep revenue decline over the last several weeks, which Cuomo warned could lead to changes in the state budget. (“You have legislative proposals, then you have budget realities. Welcome to the government.”) The Legislature is now holding budget hearings to examine and review the Governor’s proposed budget – including discussions with the various state agencies involved and impacted. The Senate and Assembly – both controlled by Democrats – will then pass their respective one-house budget bills next month, and hope to negotiate a final agreement by the April 1 deadline.