New York State lawmakers working past midnight Wednesday passed an an overhaul of income tax rates that Gov. Andrew Cuomo recommended.
The package calls for a tax cut for most New Yorkers and a slight increase for individuals making more than $1 million annually and couples making more than $2 million annually. The three-year agreement also features an infrastructure fund to inject more than $1 billion in job-creating investment and a $250 million payroll-tax cut on downstate businesses within the New York City region covered by the Metropolitan Transportation Authority, which runs the transit system.
After the Senate passed the measure 55-0, the Assembly approved it 130-8.
Cuomo crafted the measure in conjunction with Senate Majority Leader Dean Skelos, R-Rockville Centre, and Assembly Speaker Sheldon Silver, D-Brooklyn. He said the new tax structure would generate $1.9 billion in additional revenue for the state, about half of its projected deficit, although some critics questioned the numbers and criticized the hastiness of the deal, which cleared the legislature in about 30 hours.
But Skelos told reporters New Yorkers will benefit. "We're cutting taxes, in my opinion," he said.
Income tax rates for the highest earners will rise from 6.85% to 8.82%, although they will no longer be subject to the "millionaire's tax" surcharge.
Assembly Minority Leader Brian Kolb, R-Geneva, was against raising taxes for anyone. "This is how they're conducting business — let's go after the millionaires, class warfare, divide and conquer. It's wrong," he said.
According to Cuomo, the state would compensate the MTA for the lost revenue, though particulars were not immediately available. Maintaining that revenue was a priority for Joseph Lhota, who took over last month as the authority’s executive director, succeeding Jay Walder.
Comptroller Thomas DiNapoli took a wait-and-see posture on the proposals.
“There are major issues facing New York,” he said. “While movement on these issues is welcome, it is critical that we spend within our means and prioritize our growing capital needs while creating jobs and addressing the tax code.”
“Let’s not repeat the mistakes of the past,” he said. “I will analyze the details as the specifics of the agreement are made public.”
Moody’s Investors Service rates the state’s general obligation bonds A2, while Fitch Ratings and Standard & Poor’s each assign a AA.
