Has New York Finally Been Taxed Enough?

By luzitanija @ Adobe Stock

With both New York State and New York City facing budget surpluses in fiscal 2025, will residents stand up and demand tax cuts? Jonathan Ballan reports in The New York Sun:

With New York facing unexpected city and state budget surpluses, the moment is ripe to consider something that hasn’t happened in the Empire State in years — tax cuts.

Consider the economic context: out-migration to other states of more than 700,000 residents since 2020; anemic post-Covid private sector job growth; and inflation eroding salary increases.

Notwithstanding these sobering realities, state and city tax revenues are running higher than expected, while expenses are lower than feared.

Unanticipated multi-billion dollar budget surpluses are predicted for both New York State — $2.2 billion this year, according to the Governor’s fiscal 2025 Executive Budget — and New York City — $1.3 billion this year and $3.5 billion the next, the City Council reports.

Typically, surpluses are used to prepay debt service and expenses, and cover budgetary risks. And, admittedly, the budget picture isn’t as rosy in future years, with gaps predicted. The population declines, economic woes, and surpluses, though, create a new paradigm.

Proceeding as if these were usual times and ignoring today’s new context, the State Assembly and Senate recently passed one-house bills — opposed by the governor — increasing tax rates on individuals.

Every day one reads trial balloons of new tax and spending proposals, and presumably negotiations have increased in intensity as the April 1 deadline nears.

How about taking a new look at proven policies from successful administrations of both parties, including Governor Carey, a Democrat, and, more recently, Governor Pataki, a Republican, during the downturn of the 1990s? The legislature and Governor should not simply spend the unforeseen windfall. They should boldly cut taxes.

Read more here.