STAFF CONTACT :
The Business Council submitted a message to all New York State Lawmakers regarding the Fiscal Year 2022 budget. We are urging the legislature to carefully balance the state’s social and economic development needs while recognizing raising taxes, while the economy remains fragile and the need for additional state resources has already been met, would be a mistake that will further harm New York.
As the State Senate and Assembly finalize their budget resolutions for state FY 2022, we renew our call to avoid significant new or increased taxes that would impair the state’s economic recovery.
At the recent legislative hearing on taxes, we were asked if the state’s business community was supporting any tax increases. We responded that any consideration of new taxes should wait until the state had its updated revenue forecasts, and until Congress took final action on COVID relief legislation.
Now, we have a much better understanding of the resources that will be available to the state in putting together its new budget.
The state’s consensus revenue forecast projected $1.2 billion in higher tax receipts for FY 2022 than was included in the Executive Budget, and that figure is in addition to the $1.6 billion increase in projected revenues contained in the Governor’s 30-day budget amendments.
And yesterday, with the final passage of the $1.9 trillion American Rescue Plan, we know that New York State will be receiving an additional $12.6 billion in unrestricted federal aid, in addition to significant categorical aid that will support key state programs, including $9.4 billion for K to 12 education, $2.6 billion for higher education, $1.8 billion for childcare, and $358 million for broadband deployment, among others.
In addition, the new federal COVID bill will provide significant aid to New York municipalities, including $6.14 billion for cities ($4.3 billion for New York Cities), $3.9 billion for counties, and $825 million for other municipalities.
Taken together, these developments show that the state will be able to adopt a FY 2022 that provides increased funding for a number of high priority state programs and restores local assistance-related deficit closing measures proposed in the Executive Budget, without imposing significant additional taxes on a recovering economy.
While signs are clear that we have begun our recovery from both the COVID pandemic and the related economic recession, we are far from fully recovered. Proposals such as major new financial transaction taxes, a significant increase in business income taxes, and other revenue proposals would short circuit the state’s recovery at a time when competition for new jobs and new investments is increasing.
Legislators also need to recognize that New York employers are already facing more than $10 billion in increased unemployment insurance taxes, as they are required to repay federal advances made necessary to pay benefit claims to New Yorkers who lost jobs due to the pandemic.
We urge the Senate and Assembly to propose budget plans that carefully balance the state’s social and economic development needs. Increasing taxes at this moment in time, when the economy remains fragile and the need for additional state resources has already been met would be a mistake that will further harm New York.
President & CEO