Governor Cuomo's Change on Tax Policy

Dec 12, 2011

Governor Cuomo, in his first day on the job back on January 1st of this year, laid out his position on raising taxes pretty clearly.

“I say no new taxes, period,” Cuomo said on January 1.

 

The governor was answering a question from reporters, in his first media availability as governor, on whether he would support continuing the current surcharge on New Yorkers making $200,000 and up, which includes millionaires and multi-millionaires, when it expires December 31st.  Cuomo expanded on his view point during that session on January 1st.

“There’s a very simple economic equation that people live with in life. That when your income slows, your expenses slow,” said Cuomo on January 1.  “Government has to live with the same basic fiscal discipline.”

 

The governor continued to hold that view, even as the Occupy movement this fall began to influence the political dialog by voicing resentment against the rich. Occupy protesters came from around the state in late October to protest Cuomo’s policies, calling him “Governor 1%”.

 

By early December, Cuomo revealed, in written essays, that he would ask the legislature to change the state’s tax code to include a new higher tax bracket for the wealthiest of the wealthy, those making $2 million dollars a year or more.  It would still be slightly lower than the current income tax surcharge on the rich. And by December 7th, it was law.

 

But Cuomo says he didn’t change his mind about because of shifting political winds. He says it was the state’s financial circumstances that were changing, which he blames on the national economic slowdown. The state’s mid year budget report, released in mid November, showed a growing combined budget deficit of $3.8 billion dollars.   

 

“For this new reality that we’re facing, I think these are the best decisions,” said Cuomo.

 

Bruce Gyory, a political advisor to two previous governors, and now an adjunct professor at SUNY, says it’s likely that the Occupy movement did influence Cuomo, but not because of the 100 or so young people marching through the halls of the Capitol. He says it’s real impact is the “way it positioned the mirror” over what the public is concerned about.

 

“It has shifted the focus of moderate independents, particularly in our suburban communities, which is 50% of the vote, towards saying ‘we want a fairer tax system’,” said Gyory.

 

 

The governor says there’s another reason he needed revenue as the budget gap widened more than he’d predicted. Cuomo and lawmakers have already promised schools and health care providers that they would increase their funding by 4% in the next year’s budget, after deeply slashing spending to close a then $10 billion dollar deficit in the current state spending plan.  The Governor says he intends to keep that commitment.

 

“How do you now turn around and say ‘forget all that, I was wrong, you’re going to get zero’?” Cuomo asked. “You can’t do it.”

 

Gyory says he doubts Cuomo’s reversal on tax policy will hurt the governor politically, in the long run, especially since the tax code changes include tax breaks for the middle class.

 

“The flip flopper charges will bounce off him,” said Gyory. “I think it’s a plus plus for him.”

 

And,  an added bonus to the new tax law- Cuomo and the legislature have saved themselves a lot of wrangling in next year’s budget , though the governor says they will  still have to cut $2 billion more dollars.