At the height of the fiscal crisis two years ago, staring down the barrel of a $20 billion budget gap, the state imposed an income-tax surcharge on New Yorkers earning more than $200,000 a year — and called it a “millionaire’s tax.” I voted for it as a temporary solution, expecting that the economy would have turned the corner by now. But a tax isn’t temporary if we keep re-authorizing it. Unfortunately, some of my colleagues want to do just that — arguing that we should extend the tax before it expires this year.
If the surcharge were truly a millionaire’s tax, maybe it would be worth discussing. But since when do hard-working two-income middle-class families count as millionaires?
And the surcharge hasn’t even raised the revenue it was supposed to — falling well short of the projected $4 billion a year.
In the middle of a fragile recovery, with the state’s current deficit still at a whopping $10 billion and growing, we can’t be held hostage to improvising our way out of budget trouble (whether with taxes, cuts and/or borrowing) year after year. We have to recognize that we must fundamentally transform the very way New York state’s government is structured.
This is not the time to tinker around the edges. We don’t need higher taxes — we need smarter spending. And we should get beyond arguing about service cuts and instead find ways to provide services more efficiently.
Gov. Cuomo is leading the way. He’s putting forward innovative ideas, like a spending and government-efficiency commission to reorganize the state’s government — weeding out layers of unnecessary bureaucracy that clog up Albany. He has proposed a Medicaid redesign team to reign in New York’s out-of-control Medicaid costs — providing better service for less money — and another team that will do away with costly and unnecessary state mandates.
We in the Legislature must be a partner with the governor to redesign and rebuild New York’s government from the ground up — and there are plenty more great ideas that we can build on.
For instance, New York is one of only six states that pays for Medicare Part B premiums for government retirees. By asking retirees to cover these payments — which amount to $110 a month, about the cost of a cable bill — New York’s taxpayers can save more than $100 million every year.
We can also reform our state’s health-insurance-coverage system for future retirees, so that it rewards those state workers who have put in the most years of service — saving tens of millions of dollars more. And then there’s the $300 million in revenue the state could raise by repealing the Prohibition-era law that prevents grocery stores from selling wine — a move that would create thousands of jobs, all without raising taxes.
By making government smarter and more efficient, we’ll create jobs and foster investment in New York again. But extending the income-tax surcharge would be a colossal, job-killing step backward. It would punish middle-class New Yorkers and small businesspeople just when we should be focusing on promoting growth.
The economy is on the mend, and a new day is dawning in Albany. As Gov. Cuomo said, we can build New York back bigger and stronger than before. That means embracing innovative ideas.
In this era of new promise, the income-tax surcharge isn’t innovative, and it just isn’t the answer.
Micah Z. Kellner represents the Upper East Side, Yorkville and Roosevelt Island in the state As sembly.