Hochul Seen Tacking to the Right With Budget Plan Tax Relief

Emphasizing economic recovery, a balanced budget, and tax cuts, Governor Hochul today unveiled a $216 billion budget plan that continues a notable turn for the New York Democrat, who has been distancing herself from the progressive wing of her party.The proposed budget, which will undoubtedly go through changes in the state legislature, pays special attention to the needs of New Yorkers emerging from the Covid pandemic.Some of these measures include $10 billion in investment in the state’s healthcare system and $31 billion in aid for the state’s school system, which is touted as the largest ever outlay for school aid in New York.The investment in healthcare is meant to increase the state’s healthcare workforce by 20 percent over the next five years by expanding programs for training, educating, and recruiting healthcare professionals.The plan also includes three initiatives aimed at small businesses: a tax relief plan “for small businesses and the middle class,” a $1 billion program to “fund innovative small businesses,” and a tax credit for Covid-related expenses.This is all in addition to an accelerated plan to enact personal income tax cuts, which began in 2018 and was slated to be fully implemented by 2025. Under Ms. Hochul’s plan, these tax cuts will now be fully in place for 2023 and will affect an estimated 6.1 million New Yorkers.The 2023 budget proposal is purportedly balanced, with no gaps that would plunge the state into deeper debt. In fact, the projections for the state budget show no gaps through 2027, as much of the spending is one-time investments.“After years of unprecedented hardship, this Budget makes the State, from a financial perspective, as resilient as its spirit. It is the Budget that New Yorkers deserve and expect,” Robert Mujica Jr., that state’s budget director, said today in a statement.The small-business tax relief would aid an estimated 195,000 businesses by increasing the small-business tax modification to 15 percent from five percent.This represents a three-fold increase in the tax breaks for businesses or farms that make less than $250,000 a year.Other measures to support small businesses include a $200 million grant program for “early-stage businesses recently opened despite the COVID-19 pandemic” as well as a small-business lending initiative to provide low-interest loans to expanding businesses.The governor also announced a new set of tax rebates for homeowners. This one-year program will benefit homeowners who make less than $250,000 a year.The average benefit under this program is estimated to be a $970 in tax reduction outside New York City and a $425 reduction in New York City.These tax breaks for businesses and homeowners come as Ms. Hochul and Mayor Adams appear to be trying to distance themselves from the far left wing of their party.During a recent joint press conference, the two announced there would be an increase in police officers on the city’s subways as well as additional outreach efforts to deal with homelessness. Critics believe such moves will result in more confrontations between the police and the homeless.The plan for a balanced budget comes after the legalization of both marjiuana and sports betting, which the state estimates will each generate hundreds of millions of dollars in tax revenue in the coming years.This revenue is expected to help finance new spending as well as pay for the ballooning cost of the state’s Medicaid program. Just two years ago the state’s estimated budget gap for 2023 was $8.5 billion. Most of this deficit was due to the increasing cost of Medicaid.All taken together, the budget’s apparent fiscal prudence signals a new approach for the once deficit-ridden state. The final budget will be due April 1 and is subject to modification and approval by the state legislature.________Image: Governor Hochul speaks during a news conference December 14, 2021. Reuters/Carlo Allegri

Hochul Seen Tacking to the Right With Budget Plan Tax Relief

Hochul Seen Tacking to the Right With Budget Plan Tax Relief

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