New York state lawmakers are close to agreeing on a new spending plan that would include a deal to raise taxes on the wealthy and raise the minimum wage. They failed to seal a pact Monday night, but say they will be back Tuesday morning to try again.
Senate Co-Leaders Dean Skelos and Jeff Klein, after a closed door leaders meeting, said they are hopeful that up to $700 million in tax cuts for business and the middle class could be in the state budget. Skelos, a Republican, says it’s possible an energy tax surcharge that the governor had wanted to extend could also be discontinued.
“We’re very close to having a deal,” Skelos said.
As part of the package, the governor and leaders are talking about raising the minimum wage and considering a phase-in to $9 per hour over a three-year period.
Assembly Speaker Sheldon Silver, while denying that the proposal had been accepted, offered a defense of the idea.
“Nobody said I signed off on any plan,” Silver said. “But realistically, if we can get a minimum wage that ends at $9 in two years, I think we’ve done a tremendous service.”
The budget deal could include a continuation of a tax surcharge on individuals making more than $1 million dollars a year, and couples making more than $2 million annually. The tax was scheduled to expire in 2014, an election year for the governor and all 212 legislators. The proposal would extend the temporary tax on the wealthy into 2015.
E.J. McMahon, with the conservative think tank the Empire Center, says the state may not get as much money from extending the tax on millionaires as lawmakers think.
“You’re really tempting fate at this point,” he said. McMahon predicts more wealthy people will leave New York. With the internet and Skype, he says, it’s easy to conduct business from anywhere these days.
Ron Deutsch, with New Yorkers for Fiscal Fairness, says if the wealthy were going to be driven away by the tax rate, they would have already left, since the tax surcharge has existed in one form or another since 2009.
“This is absolutely a fairness issue,” Deutsch said.
Lawmakers still hope to have budget bills passed by Friday, but if talks drag on any longer, they may need the governor to issue emergency messages to meet that deadline.