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Cuomo's Budget: Following the Lead of Failed Right-Wing Ideology
New York Gov. Andrew Cuomo has been hailed by some as a bold leader,
but the priorities expressed in his first budget, approved this week by the legislature, indicate that he is following the right-wing's
slash-and-burn policies and adhering to economically flawed and discounted
ideology.
The budget
includes a slew of heinous cuts that predominantly fall on the middle
class, working families, and localities, but does not include the
extension of a high-end-income tax surcharge, a measure that over 70 percent of New Yorkers support. It slashes
education aid by $1.3 billion, cuts state workforce costs by $450
million, and lowers local aid, while also creating or increasing several
tax
credits for businesses. The budget's adherence to right-wing economic
doctrine was so strong that former New York City Mayor and presidential
candidate Rudy Guiliani boasted that Gov. Cuomo was "doing everything that a Republican governor would be doing
in a similar situation." Perhaps recent reports highlighting the fact that conservative
billionaire David Koch provided Cuomo with $87,000 during the gubernatorial campaign should also come as no surprise.
During an economic downturn, progressive revenue generation is far
preferable to deep cuts, as it allows states to provide funding for
essential programs, pump money into the economy, and protect working
families. Research consistently shows that, contrary to
right-wing rhetoric,
there is no link between tax increases and job loss. Studies have also shown that states
with higher personal income tax rates experienced significant job growth in the past decade, have more innovative new economy industries as a result of crucial investments in long-term growth industries, and sustain higher income growth. Additionally, states that have increased income taxes slightly on the wealthiest few in recent years have not experienced any significant out-migration of wealthy residents.
Cuomo's actions stand in stark contrast with other progressive budget solutions being advanced across the country: including Illinois increasing its personal and corporate income tax, proposals in Michigan and Connecticut to raise tax rates on the highest earners, and efforts to bolster the earned income tax credit (EITC) to assist the working poor.
Far from helping to rebuild the economy, a budget that relies too heavily on cuts threatens to have a detrimental impact, resulting in reduced private sector spending, job loss, and diminished investments. The Economic Policy Institute explains that $1 in cuts translates to $1.41 in lost economic activity. As Jon Shure, Deputy Director of the Center on Budget and Policy Priorities, relates, "to be cutting taxes when you're short of revenue is like saying you could run faster if you cut off your foot."
Far from helping to rebuild the economy, a budget that relies too heavily on cuts threatens to have a detrimental impact, resulting in reduced private sector spending, job loss, and diminished investments. The Economic Policy Institute explains that $1 in cuts translates to $1.41 in lost economic activity. As Jon Shure, Deputy Director of the Center on Budget and Policy Priorities, relates, "to be cutting taxes when you're short of revenue is like saying you could run faster if you cut off your foot."
Analysis has shown that the extension of New York's "millionaire's tax" would have generated $1.2 billion in the coming year, $4 billion the following year, and only impacted only 2 percent of the state (the Center for Working Families provides a breakdown of the percentage of residents in each district who would be affected by the increase). Despite overwhelming public support for the extension of the measure, historic levels of economic inequality, and the egregious regressivity of the state's existing tax structure (which places a heavier burden on the middle class and low-income families than the richest of the state), elected officials decided to further burden working families by passing a budget that relies primarily on cuts. This is demonstrative of a disturbing and pervasive trend in politics: tax breaks for the affluent and corporations, and austerity for the rest.
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