Taxes on Wealthy & NYC Residential Parking Permits Dominate Debate Between Hochul & Legislature on State Budget
Edited by: TJVNews.com
In Albany these days, legislators along with Governor Hochul are attempting to reach a deal by April 1st on the state’s budget for the coming year. As is traditional in such cases, closed door deal making over the budget is taking place in order to meet the deadline.
The New York Times reported that last month that the governor unveiled a $227 billion budget that addressed a number of challenges that New York City is facing including the shortage in affordable housing, the crisis of migrants and the financial outlook of the subway system.
On Tuesday, however, Democrats who control the State Legislature countered with financial blueprints of their own that rejected some of Hochul’s core policy plans around housing, public safety and education, the NYT reported. The governor promised not to raise taxes but both legislative chambers also proposed hiking personal income tax rates on the very wealthy as a way to fund more state spending.
The report indicated that Hochul will not enter the negotiations process for the budget in a strong position. Last month, the State Senate rejected her chief judge nominee, as it flexed its political muscle, the NYT reported. Late last month, Hochul replaced her acting budget director, Sandra Beattie, with Robert Megna, an Albany veteran recruited to spearhead budget negotiations.
Hochul will have to face proposals from Democratic legislators who are acquiescing to left-wing activists who have lobbied them to ask for hikes on the personal income tax rate on those earning over $5 million to 10.8 percent, up from 10.3 percent, the NYT reported. Those who make over $25 million would see their rate rise to 11.4 percent from 10.9 percent, the report added.
On Wednesday, Carl Heastie, the Assembly speaker, justified the proposed tax hike by noting recent state figures that showed that the overall number of millionaires increased by 10,000 between 2020 and 2021, according to the NYT report.
Speaking to reporters, Heastie said, “If we’re talking about affordability here in the state of New York, I think it’s more right to ask those who are doing really well to kind of help out those who are not doing as well.”
For her part, Hochul has consistently stated that she has no plans to increase taxes on the super wealthy in the state as it is her belief that doing so could serve as incentive for them to relocate to other states where the tax rate if much lower for those in that income bracket. The NYT report said Hochul feels their potential departure from the state could significantly decrease an essential part of the state’s tax base.
In order to address the issue of the budget gap of the Metropolitan Transportation Authority. Hochul has proposed new streams of revenue, including $500 million a year from New York City.
The Senate proposed giving the New York City Council the authority to create a parking permit system in the city’s residential neighborhoods, as was reported by the NYT. This is an idea that has been raised before but never came to fruition.
The NYT reported that the city would be allowed to charge up to $30 a month for a permit, and the revenues would be dedicated to the MTA. The proposal would give the Council the power to require permits in certain areas, with the aim of easing the difficulty that many residents have in finding street parking. Also proposed by the State Senate was raising money by increasing the MTA corporate franchise tax and imposing a new fee on so-called for-hire vehicle rides, such as those provided by Uber and Lyft, the report said.
In regards to differences that the governor and both chambers have on the issue of housing in the upcoming budget, on Wednesday, TheCity.nyc reported that through zoning changes, the governor as well as Mayor Adams want to “force communities to accept more housing, following a model pioneered by California and other states. They also are proposing tax breaks to help make new development and restoration of dilapidated older buildings feasible.”
The legislature, on the other hand, is proposing a far more limited approach that would offer financial incentives to communities to encourage more housing development, the City.nyc reported. And they would add no new tax relief to promote development.
The City.nyc also reported that the two legislative chambers are also proposing bills that would cap rent increases and allow tenants to legally challenge unreasonable rent hikes while requiring landlords to renew tenants’ leases in most instances, seeking to allow evictions only for “good cause.”
Hochul has proposed the state build 800,000 new housing units over the next decade, which includes Adams’ target of 500,000 for the city in the same time period, as was reported by TheCity.nyc.
The proposal necessarily targets New York City’s suburbs, where new housing gains have lagged the nation’s. TheCity.nyc reported that many suburbs that have limited new housing construction mostly to pricey single-family houses have remained home to virtually all white residents.
The governor wants to require localities to increase their housing stock by 3% over three years or lose their ability to reject development proposals. TheCity.nyc also reported that Hochul also proposed that New York suburbs with transit hubs be required to allow density as high as 50 units per acre near those stations. She proposed a fund to help towns with infrastructure needs, and a tax break to encourage affordable units.
The NYT reported that if a municipality does not meet its target, the state could allow developers to override local zoning rules, a provision that provoked backlash among both Republican and Democratic officials in the suburbs.
Responding to the suburban opposition, Democratic lawmakers rejected Hochul’s plan to encourage transit-oriented development, as well as the state’s ability to override local zoning.
“We believe that building housing is important, we believe affordability is important and we believe we can get there with incentives, principally, and community involvement,” said Andrea Stewart-Cousins, the Democratic majority leader who represents Westchester, parts of which have routinely opposed new housing, as was reported by the NYT.