ALBANY – Gov. Andrew Cuomo on Tuesday presented his budget message to members of the state legislature, and it includes not only a billion dollars in additional revenue, but also calls for a radical change in the state income tax code.
Cuomo is proposing to collect another $1 billion in what he called “revenue-raisers.” The governor is proposing a fee on health insurance providers to recoup some of the windfall he said they received in the corporate rate tax reduction; and a tax on nonprofit health care providers that convert to for-profit corporations.
Under the governor’s proposal, the state would also shift the income tax code to an employer-paid payroll tax in an effort offset the national tax changes that limit people’s ability to deduct their state and local taxes on their federal return.
Cuomo said the changes are necessary to combat what he called an “economic missile” that was launched from Washington at the state of New York.
The state is currently facing a $4.4 billion gap in revenues; $2 billion in Medicaid cuts; and an increased tax burden on residents, because of federal tax code changes that capped the deduction at $10,000.
Cuomo pointed out that New York sends $48 billion more in revenues to the federal government than it receives back. He said New York and California are being used as piggy banks to fund the federal tax plan.
The budget is now in the hands of the state legislature, with both the Senate and the Assembly scheduled to spend the next several weeks pouring over each line of the budget before coming forward with their own version of the spending plan. Once that has been done, both the Senate and the Assembly, along with the Governor, will work to reconcile each version into a final spending plan before the March 31 deadline. The state’s fiscal year begins on April 1.