Lawmakers and Gov. Kathy Hochul are at odds over whether to raise taxes on the wealthy in this year’s budget.
While there are many agreed-upon spending areas, there are stark disagreements about where the money should come from to pay for them.
In 2021, Democrats in Albany raised taxes on the wealthy. It made some New York City residents the highest taxed in the nation.
This year, those taxes are set to expire. And while Gov. Hochul supports renewing them, she does not want an additional tax increase.
“We have to make sure that we live within our means right now,” Hochul said Friday. “And not do anything that has people contributing to the tax base not be here any longer. And I’m very focused on making sure we can continue with no disruption of [the] high quality services we provide. They need to be funded. And making sure that the people who fund them remain important to me too. So, I’m not going to be raising taxes.”
But Democrats in both the Senate and the Assembly have proposed doing just that — increasing taxes on the wealthy once again. This time for those making more than $5 million per year.
“I actually think any year is a good year to raise taxes because we had a very rough pandemic and inflation period for a majority of New Yorkers,” Democratic Assembly member Sarahana Shrestha, who represents part of the Hudson Valley, said. “But really the wealthy people did alright. We have seen an increase in millionaires in New York State. We have seen an increase in corporate profits. They are doing fine.”
Hochul has proposed some tax increases. Including a payroll mobility tax on commuters in the MTA coverage area.
That was also rejected by the legislature, which would rather see an increase in the personal income tax that can target high income earners rather than salaried employees, who are more likely to be middle class.
“There are just amazing priorities that we have, so we think we can ask for the wealthiest to pay a little bit more,” Democratic State Senate Majority Leader told reporters last week. “MTA, we’ve got a lot of things that we have to tackle.”
No matter how they cut, taxes are going to need to go up somewhere to address the gaping hole in the MTA budget.
Ridership dropped off significantly during the pandemic, damaging the MTA’s finances.