The New York State Legislature has passed a $177 billion fiscal 2021 budget that continues a phase-in plan for middle-income tax cuts and includes spending cuts in light of the COVID-19 pandemic.
Gov. Andrew Cuomo (D) announced the budget's highlights April 2, stating that it has no new taxes but authorizes a $10 billion spending reduction to account for the economic impact of the pandemic.
The budget, which was delivered to the governor April 3, will allow for up to $105.8 billion in state operating spending, but the initial total will be $95.8 billion unless the state receives further federal assistance or the economy recovers faster than expected from the pandemic. It will also authorize the state budget director to cut spending during fiscal 2021.
The budget will continue to lower personal income tax rates for middle-income New Yorkers as part of multiyear plan enacted in 2016. The cuts are expected to save 4.7 million New Yorkers over $1.8 billion in 2020, according to the governor.
The budget will also create a refundable, discretionary, green jobs tax credit totaling 7.5 percent of wages for each net new job created, and a green investment tax credit of up to 5 percent of qualifying new capital investments involved with green economy projects.
Cuomo's plan to legalize recreational cannabis, included in his January 8 State of the State address, did not make it into the final revenue bill (S. 7509B/A. 9509B). That proposal would have generated an estimated $300 million in tax revenue.
The governor's tax relief proposal for small businesses was also not included in the budget. According to Cuomo's 2020 State of the State book, that would have lowered the corporate tax rate from 6.5 percent to 4 percent for small businesses with fewer than 100 employees and less than $390,000 in annual income.
The budget also does not include the additional tax on ultramillionaires that New York City Public Advocate Jumaane Williams (D) had called for to protect healthcare spending from budget cuts.