After New York’s fiscal year ended on March 31, it took five weeks of haggling before Gov. Kathy Hochul, D-N.Y., and state legislators finally passed a budget.
And it’s a doozy.
Gov. Hochul, who has tremendous power over the budget process, proved once again she is a weak and incompetent horse-trader. She permitted legislators to walk all over her.
Spending, which totals $254 billion, is up $17 billion versus the previous budget.
To fund the planned disbursements, the "Temporary Income Tax and Surcharge" law that's foisted on New Yorkers making more than $2.1 million annually, was extended for the third time. That tax rakes in about $5 billion annually.
There are also new taxes. They include a $1.4 billion payroll tax surcharge and another $10 billion of taxes on corporations and the wealthy.
The state continues to lean on top earners, particularly Wall Street entrepreneurs, to fund its fiscal follies.
For example, in 2023, over 50% of the state’s income tax revenue came from only 2% of filers — 200 thousand out of 10 million.
Where is all this money going?
The biggest chunk, $124 billion, will go to Medicaid.
Because New York broadly defines eligibility standards, at the present time there are approximately seven million people enrolled in Medicaid — 38% of the state’s population.
Of that total, an astounding 480 thousand are illegal immigrants.
School aid to fund the state’s failing public schools is $37.6 billion — up $1.7 billion.
Foundation Aid, which pays for various special education programs, is $26.4 billion—up $1.4 billion.
In the coming school year, total state and local expenditures for education will cost more than $30,000 per student, the highest per capita spending in the nation.
Spending to placate the teachers' unions goes up every year, while student proficiency goes down.
Then there is Gov. Hochul’s ludicrous "Inflation Refund" that will cost $2 billion.
In the Fall, probably around Election Day, $200 checks will be sent to individuals earning under $75 thousand annually and $400 to families making under $150 thousand.
$200 Bucks — Boy, Oh Boy!
Even members of the governor’s own party have ridiculed the measly handout.
The New York Times has reported that the multibillion payout "has been derided by some Democratic legislators as a stunt that is more about politics than good policy."
Expert reviews of the state’s budget is depressing reading.
The report released by the Citizens Budget Commission (CBC) points out that state spending has been increasing "four times the rate of inflation and comes despite the looming threat of multibillion dollar federal funding cuts."
Other CBC findings:
The budget "further cracks the state’s fiscal foundation, driving projected annual gaps to exceed $14 billion by fiscal year 2029."
The state’s structural budget deficit that consists of "the long-run mismatch between receipts and disbursements, is projected to exceed $20 billion."
And to pay off the state’s unemployment insurance debt, the governor is taking $7 billion from the state’s "rainy day" reserves.
"Reducing 'rainy day' reserves," the CBC concluded, "weakens the state’s ability to weather an economic downturn."
In his analysis of the enacted state budget released on June 9, State Comptroller Tom DiNapoli warned, "The stakes are high for New York if the cuts being discussed in Washington occur."
The state is heavily dependent on the feds to service Medicaid and other programs.
In fiscal year 2024-2025, those dollars totaled $96.7 billion or 38.8% of the state budget. Federal Medicaid contributions totaled $69.2 billion out of a total of $115.6 billion expended.
Yet, despite the Trump budgetary plans that have been in the news for months, Comptroller DiNapoli acknowledges that “the state has not taken any significant cost containment measures or implemented a strategy for addressing federal cuts. . . . "
In May, the New York Post cited a demographics study that concluded "more than 125,000 New Yorkers have fled to Florida in recent years taking nearly $14 billion worth of income out of the Empire State. . . . "
The report also revealed that New York’s "total share of millionaires compared to other states ticked down from 12.7% in 2010 to 8.7% in 2022 — a more than 31% slide."
If Gov. Hochul calls a special session to address federal cutbacks, expect the share of New York millionaires to continue to slide downward.
Why?
Because radical left-wing legislators vehemently opposed to spending cuts, will insist on imposing even heavier taxes on top earners who are already paying the highest combined state and local taxes in the nation.
George J. Marlin, a former executive director of the Port Authority of New York and New Jersey, is the author of "The American Catholic Voter: Two Hundred Years of Political Impact," and "Christian Persecutions in the Middle East: A 21st Century Tragedy." Read George J. Marlin's Reports — More Here.
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