The New York Senate passed its fiscal 2012 budget and the Assembly was set to pass its spending plan as lawmakers continue to disagree on whether to extend a tax increase for millionaires.
Assembly Speaker Sheldon Silver, a Democrat, is seeking to keep an 8.97% personal income tax surcharge on those earning more than $1 million.
The current 8.97% rate applies to those making $500,000 or more and will expire on Dec. 31.
Extending the higher tax on millionaires would generate $706 million of revenue in fiscal 2012, according to the Assembly’s budget proposal.
Democrats control the Assembly.
Fiscal 2012 begins April 1.
While lawmakers work on next year’s spending plan, the state comptroller’s office is set to issue $804 million of general obligation debt on Tuesday, according to the comptroller’s forward issuance calendar.
The competitive deal will include $508 million of new money and $296 million of refunding bonds and a mix of tax-exempt and taxable debt.
Gov. Andrew Cuomo, a Democrat, does not support continuing the higher tax levy for millionaires.
Republicans control the Senate. Their budget plan allows the 8.97% rate to sunset entirely at the end of the year.
Senate Majority Leader Dean Skelos yesterday said keeping a millionaire tax would send the wrong message to the business community. He believes the tax would detract corporations from moving into the state.
“For [businesses] looking to locate here or making a decision to stay here, [they] want some certainty that whenever there is a problem in our economy, the answer is not going to be 'tax the heck out of them,’ ” Skelos said during a press conference. “So we’re going to change that tone. And I’m delighted to partner with the governor in saying no taxes.”
The Senate budget is only $500 million less than the $133 billion executive all-funds budget that Cuomo released on Feb. 1.
The Senate spending plan allocates $280 million more in school aid, mostly to rural school districts located upstate. Senate Republicans also said they would approve the governor’s limits on future Medicaid and education spending.
The Senate majority also eased costs for local governments by shifting $296 million of unfunded mandates to the state.
After the vote, Senate Democrats said the fiscal 2012 budget plan favors the well-off and harms middle-class and low-income families.
“The Senate Republican budget protects the wealthy, cuts services to our most vulnerable New Yorkers, and fails to provide the relief our middle class families need,” Senate Minority Leader John Sampson said in a statement.
The Assembly budget is nearly $500 million more than Cuomo’s spending plan and would allocate $528 million more to local governments through grants and aid. Once each chamber approves its budgets, the Legislature will then begin conference committee sessions to craft a compromise spending plan.