Tax Reform Agreement to Make for a Better 2012
As we leave 2011 behind to embrace the opportunities and challenges of the new year, there is no denying New York is better prepared to tackle all that lies ahead in 2012 thanks to the tax reform agreement recently reached by the Legislature and the Governor.
This package of reforms will help our state overcome what is expected to be a multi-billion dollar budget deficit in 2012, all while lowering taxes for New York’s middle class families and ensuring a more progressive, and what I consider fairer, tax code.
A full 99% of New Yorkers are slated for a tax cut in the new year, and those making more than $1 million will merely be asked to continue to pay their current rate. This, in my view, represents a responsible compromise, though I remain committed to fighting for additional progressive tax reforms, including in our corporate tax structure.
Beyond providing middle class tax relief, this reform agreement also removes the job-killing MTA payroll tax for 80% of our small businesses, encouraging job growth and New York’s economic recovery. Furthermore, it commits a billion dollars to job-creating road and bridge repair projects; dedicates critical funding for much-needed programs such as child care subsidies, assistance for displaced homemakers, and youth and adult job training initiatives; and it allows us to maintain our promise to increase education funding by 4% next year.
Finally, these reforms will put New York on a sounder financial footing, ensuring that the difficult cuts we were forced to make in 2011 will not need to be repeated on the same scale in 2012. While it would be unrealistic to say our state is out of the woods as we grapple with a still-frustrating economy, this agreement will nevertheless allow us to preserve many of the programs that New Yorkers in-need require now more than ever.
Looking ahead, there is only so much we can predict with certainty for 2012. Inevitably, our state will face unexpected challenges that require difficult decisions. However, I can say with confidence that through the responsible, bi-partisan effort to reform our tax code, New Yorkers can look forward with optimism to a better, new year.
Despite the fact the new year is still several weeks away, our state now finds itself in a precarious fiscal position that cannot wait until 2012 to be addressed. This week, members of the state legislature will return to Albany early with the challenging task of tackling a budget shortfall in the hundreds of millions of dollars, to say nothing of the multi-billion dollar budget gap awaiting New York in the coming year.
Along with Governor Cuomo, legislators from both parties and both houses will need to forge an agreement that bridges our state’s funding gap while also meeting another test that I consider critical: Encouraging economic and job growth without cutting deeper into already hard-hit budget priorities.
This difficult task demands swift action and determined leadership, which is why I was encouraged to learn Governor Cuomo has put forth a framework with the potential to meet our budget challenges in a fair and appropriate way: Revisiting New York’s tax code to bolster revenues while ensuring tax fairness, especially for middle-class families.
The details of this plan are still in the making, but the central theme is clear: Ask New York’s wealthiest residents not to pay more in taxes, but to simply keep paying a rate close to what they already do. With the state’s surcharge on the wealthiest New Yorkers set to expire at year’s end, such a proposal for a progressive tax code would provide much, if not all of the funding necessary to close our budget gap immediately.
I believe this approach is not only fair, but economically sound. Last year, our state closed a $10 billion budget gap exclusively through deep and painful funding cuts to state programs. In addition to undercutting such priorities as quality education and affordable health care, these cuts also deprived our state’s economy of a great deal of economic activity. If we now remove several billion dollars more from the state economy through slashing funding, our already-fragile recovery will be put at increasing risk.
There’s no getting around that fact New York needs additional funding to balance the state budget. A revising of the tax code that asks New York’s wealthiest residents to pay not more, but rather what they already do, provides a responsible way of doing so. I look forward to working with the Governor and my colleagues in the Legislature to ensure New York balances its budget, and that it is not done on the backs of Rockland families.