Gov. Cuomo and legislative leaders have announced a three-way agreement that will generate an additional $2 billion in added revenue next year from taxes on the wealthiest New Yorkers.
NYSUT leaders welcomed this as a significant step forward and credited activism by NYSUT members, other union members, coalition partners and the "99 percent" for making the case that New York state must up its investment in public education and health care, and that the wealthiest must pay their fair share to help make that happen.
"This agreement provides the revenue that will make it possible for New York state to begin restoring cuts that have so burdened our schools and campuses. Clearly, more is needed and we look forward to a state budget that reflects how revenue is allocated," said NYSUT President Dick Iannuzzi. "New Yorkers want to see a greater investment in its public schools, higher education and health care facilities. Investments in infrastructure, job creation and economic development all reflect a commitment to growing New York's economy, which benefits all of us. Today's agreement gets us closer to the New York we all want."
The deal announced Tuesday will cut taxes for 4.4 million middle-class New Yorkers and tweak rates for the highest earners so that they would pay slightly less than they do under the so-called "millionaire's tax," set to expire at the end of this month.
Individuals making more than $1 million in taxable income and joint filers making more than $2 million would pay a rate of 8.82 percent, fractionally lower than the 8.97 percent rate they paid under the millionaire's tax. This slight tax break pales in comparison to the bonanza the super-rich would have reaped had the millionaire's tax simply been allowed to expire at the end of this year. The agreement announced today means New York state will still capture much needed revenue from these mega-earners.
The new income-tax rates would start next year. The newly implemented top bracket would expire Dec. 31, 2014.
In their joint press release, Gov. Cuomo, Assembly Speaker Silver and Senate Majority Leader Skelos also announced the governor's New York Works initiative, a $1-billion fund that would invest private, and possibly some public, pension funds in infrastructure such as roads, bridges and parks.
Iannuzzi had previously shared with the board and with local presidents in last week's tele-town hall that conversations with state leaders have been underway as to the potential investment of pension funds. Iannuzzi noted that TRS retirement fund investment decisions are controlled by a 10-member New York State TRS Board of Trustees and are based on the recommendations of independent financial analysts who must evaluate an investment's soundness and whether it has an appropriate rate of return.
The new tax rates would generate $2.6 billion in gross income, but some of that would be allocated to new initiatives, including $50 million in additional relief for flood-ravaged areas of the state; $37 million for an inner-city youth employment program; and a tax credit for employers who hire inner city youth.
Approximately $2 billion in net income would be available to close this year's budget gap and fund increases in next year's budget, a much-needed shot in the arm, although still far short of what is needed to fully fund schools, higher education and health care. "Our work remains cut out for us," said NYSUT Executive Vice President Andy Pallotta, "but we know we are on the right track and we will keep telling our state leaders what our students need to succeed."
Meanwhile, in addition to the tax code changes announced today, leaders announced a new commission will be appointed to more thoroughly analyze the state's tax structure and consider what further changes might be needed.