Essential services will be slashed in next year’s state budget without federal aid to local governments, Gov. Andrew M. Cuomo said, pleading in a letter to New York’s federal delegation Wednesday to ensure $500 billion for localities as lawmakers negotiate the next coronavirus relief bill in Washington.
The governor sent U.S. Sens. Charles E. Schumer and Kirsten E. Gillibrand and state Congressional representatives a letter Wednesday after GOP senators on Capitol Hill released a two-year $1 trillion plan — named the HEALS Act — late Monday afternoon to bolster the pandemic-ravaged U.S. economy.
The Democratic-ruled House and Republican-controlled Senate continue to clash over providing aid to counties and local governments in the wake of COVID-19. Approved in May, the House’s HEROES Act would allocate $875 billion to state and local governments grappling with unforeseen budget shortfalls and public employee layoffs brought on by the pandemic. The allocations would go to states, cities and towns and tribal governments across the country, regardless of the political party leading the government.
But President Donald J. Trump blasts the idea as Democrats eyeing a bailout. Republicans excluded local aid from the new package.
“This will be the determinative bill ... this is probably the most important and impactful piece of legislation since I was governor,” Gov. Cuomo said during a telephoned pandemic briefing Wednesday afternoon.
The bill will define the next several months for Americans and New Yorkers with a potential second round of $1,200 stimulus checks to most Americans, reduced extra unemployment benefits and shield businesses, schools and organizations from lawsuits stemming from COVID-19 infections.
The state is facing a $30 billion budget deficit over the next two years, with a $14 billion hole anticipated this year and $16 billion the next. Tolls and fares are expected to increase as the Metropolitan Transportation Authority reports a $12 billion gap and the state Port Authority is $3 billion short in revenue. New York City anticipates a $9 billion shortfall this year.
The bill will determine the severity of cuts in next year’s state budget. The state anticipates 20 percent cuts to schools, hospitals and local governments to make up the $30 billion shortfall over the next two years.
“These are the numbers — those are the consequences,” Gov. Cuomo said. “The (state’s) revenues, in large part, are going to be the revenues that are provided by this federal bill. There have been several attempts at this federal legislation. None of them have adequately served the state of New York. ... These are real-life consequences.”
Schools must be fully funded under the HEALS Act, regardless of a state’s budget deficit.
“It’d be good news for education, but then it would mean the hospitals and local governments take an even great cut,” the governor said. “This bill will basically determine the state budget. ... To the extent they restore the $14 (billion) and $16 (billion) that will determine the percentage of the cut.”
The National Governors Association on Wednesday renewed its request for the fifth time in three months — and twice in the last week — for $500 billion from the federal government to rebuild state economies. National Governors Association Chairman Larry Hogan, the Republican governor of Maryland, and Gov. Cuomo, the association’s vice chairman, issued the joint statement April 12, April 17, May 12 and July 22.
In May, the governor praised the HEROES Act for repealing the State and Local Tax, or SALT, deduction, which allowed taxpayers of high-tax states to deduct local tax payments on their federal tax returns. A SALT repeal is not included in the HEALS bill.
Gov. Cuomo has repeatedly called SALT a “theft” to the state, saying it costs the state $29 billion and increases federal taxes on New Yorkers by $12 billion to $15 billion, or an average of $8,700 per household. A SALT repeal would help the state’s budget deficit, the governor said.
“I’ve been fighting SALT from day one — it was outrageous by the federal government,” he said. “If the Senate does not repeal SALT, I urge Sen. Schumer and Sen. Gillibrand not to support the bill. We’ve had this conversation for years, and it’s always ‘tomorrow, tomorrow, tomorrow.’ There are no more tomorrows.”
Several Democrats have proposed raising taxes on the wealthy to help offset the mounting budget deficit. Taxing the state’s top 1 percent wage earners is not the answer, Gov. Cuomo argued, because it mathematically does not make sense with New York’s roughly 100 billionaires.
State Budget Director Rob Mujica said Wednesday that the top 1 percent of wage earners in New York pay nearly 50 percent on personal income taxes and is the second-highest tax on the wealthy in the nation. A large number of New York City residents left for their second homes in other parts of the state or country and have not returned, dealing a second blow to tax revenue.
“We need all of those taxpayers to return to New York and pay taxes in New York,” Mr. Mujica said. “It’s a $14 billion decline. There’s no way to tax your way out of this problem. There’s no tax for that much money without doing a staggering amount that no one in the country has and no one has seen before.”
The Port Authority’s capital budget will be decimated with its current $3 billion budget shortfall — likely stopping, or significantly delaying, construction at the John F. Kennedy and LaGuardia airports.
The governor estimated needing about $50 billion, combining the state’s $30 billion deficit over two years, $12 billion hole in the MTA, $3 billion for the Port Authority and roughly a $9 billion deficit in New York City.
“If you take the numbers we just went through...you’re at about $50 billion — you only have 100 billionaires,” Gov. Cuomo said. “It’s just rough math. You would have to tax every billionaire half a billion dollars more to make it up. It means you would have no billionaires. The numbers are too large for that.”
The state Department of Motor Vehicles will conduct New York’s required five-hour driving course to obtain a driver’s license online.
“We understand student drivers can’t appear in person,” the governor said. “This will allow them to participate online so they can get their driver’s license and they can do it safely.”
State police and the State Liquor Authority continue to visit multiple New York City and Long Island businesses to ensure establishments enforce the state’s coronavirus mandates, such as social distancing or wearing face masks in public. SLA issued 29 violations Tuesday night in Manhattan, Queens, Brooklyn, the Bronx and in Suffolk County on Long Island.
The state increased enforcement of its COVID-19 mandates as virus infections recently spiked in young New Yorkers ages 21 to 30.
“Follow the law — that’s always good advice,” Gov. Cuomo said. “Local governments need to do their job. The state is supplementing and helping anywhere we can.”
The state established a COVID-19 testing site at Pinellas Community Church in St. Petersburg, Fla., as the southern city continues to battle a coronavirus outbreak across the state. The church testing site, created by SOMOS Community Care, will perform 500 tests per day targeting low-income and minority families.
The state sent 124,000 surgical masks, 7,500 test kits, N-95 masks, face shields and gowns, 11,500 gloves, 1,250 gallons of NY Clean hand sanitizer, 1,200 sanitizing wipes, 120 goggles, 10 ventilators and 10 iPads to assist with telehealth medicine.
State officials continue to monitor New York’s COVID-19 numbers as the virus soars in 35 states across the U.S. and Puerto Rico. The state reported a slight decline in virus patients in New York hospitals Wednesday, bringing the total to 619 hospitalized — the lowest number since March 18.
Five New Yorkers died from the virus Tuesday, down from nine Monday. The state’s virus-related fatalities have fluctuated below 15 per day for several weeks.
The state reported 543 new COVID-19 cases, or about 1.1 percent positive, of the 62,276 tests conducted Tuesday.
“All the news on the numbers and our status is all very good,” Gov. Cuomo said. “As we said, the whole goal now is to protect our progress, and we’re doing very well. And we want to make sure we continue to do well even though the sea around us is roiled.”
The Tribune News Service contributed to this report.