February 9, 2021

Congress has passed another spending plan relieving New York of its current deficit that through tax collections and scrutiny by fiscal watch dogs is 1/4 of early estimates. The state’s federal receipts will be $84B for 2021-22, an increase of $20B and extinguish the deficit, providing total cash receipts of $193B.  Personal income tax receipts are expected to recover from a reduction – 2020-2021- of $2B and grow in 2022 to approx. $60B.  This may explain why S-2522 was held in committee. The ever present question: can the state control its excessive spending and keep the tax burden low enough to stop the flight of taxpayers?  Past performance indicates: NO.  S-2522 was held in budget and revenue. [see below]

Waiver from HOS limitation rules:  NYS DOT has extended the waiver it granted last week through Feb. 16. But this time all counties are included.

THESE REVENUE BILLS were referred to the budget committee for probable adoption.  Low-taxed investment income means: “long-term capital gain, dividends, or any other type of income taxed under the preferential rates of section 1(h) of the internal revenue code, or any successor provision thereto.” [A3352 SA S2522.

It is difficult to assess the likelihood of passage in view of the $1.3 trillion Covid rescue bill passed by Congress this week, but NY’s share may not dissuade the state from passage of the instant measures regardless.  Budget hearings prevaded session this week and Covid -19 vaccine distribution continued to confound the government including dueling press releases, the latest purporting to have established new eligibility rules, with dates and locations and promises, promises.   But one senses some movement of the intelligent kind toward resolution.

State Bill Bill Name Last Action New Version Action Vote Sponsor Doc.
NY A03352 Relates to extending the top state income tax rate; provides for an additional tax to be imposed on certain resident’s low-taxed investment income. referred to ways and means
NY S02522 Relates to extending the top state income tax rate; provides for an additional tax to be imposed on certain resident’s low-taxed investment income. REFERRED TO BUDGET AND REVENUE
NY S02833 Imposes additional tax on certain business income and on business income included in an individual’s New York taxable income. REFERRED TO BUDGET AND REVENUE

 

“The CLIMATE ACTION COUNCIL will host [remotely] public meetings designed to continue sector-specific discussions to support and provide recommendations to the Council for consideration as it develops a Scoping Plan to achieve New York’s ambitious greenhouse gas reduction targets.”

Industry groups have formed a coalition [2021-01-20 – CAC Cost Study Letter – Final.pdf of business and labor to address the council’s implementation for a massive conversion of a significant portion of the state’s economy to a carbon free system  that will displace hydrocarbon fuels. The economic impact will be difficult to assess.

Backing out of the current mix of fuels requires replacing revenue through taxes on carbon emissions – in other words – taxes on fuels at bulk storage or importation level that are then “passed-on” to  consumers.  Recall the carbon tax proposals never became law because the word “tax” frightens politicians. Additional sources of energy will be from wind, solar, bio-mass, etc., built through patronage funded by bonds.  Other steps will be taken to increase price of carbon fuels by their elimination  as a cost of doing business.