Federal Tax-Code Changes Could Force New York to Adopt Lean Spending Plan

November 30, 2017. According to this article, a mounting state deficit and expected changes to the federal tax code are handing lawmakers their toughest choices in the seven years that Gov. Andrew Cuomo has been New York’s leader. The state’s most recent financial plan projects a budget deficit at $4.1 billion, but that gap could grow if tax receipts continue to lag behind the expected pace, according to state Comptroller Tom DiNapoli’s office. Cuomo himself acknowledged the scope of the challenge during a stop Tuesday in Syracuse, telling reporters: “The budget is not going to be an easy budget, and we’re going to have to find additional savings.”

Ron Deutsch, director of the union-backed Fiscal Policy Institute, said higher state taxes on the rich would allow New York to “recapture” some of the tax breaks those affluent New Yorkers would receive from the Republican tax legislation advancing in Washington. Deutsch also said his group favors easing up on the approximately $9 billion that state and local governments are spending to support economic-development awards that have benefited private industry.

Cuomo has argued that the statewide tax-levy cap, enacted six years ago, has helped to keep state spending under control. But the expected changes in federal tax policy could create pressure for scrapping the cap, at least temporarily, Deutsch maintained.

 

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