As New York State faces a $6.1 billion budget deficit, and New York City braces for big cuts, the state and city teachers unions seized on the results of a new poll showing support for a new tax on the ultra wealthy.
Roughly 92% of 1,000 voters surveyed said they would somewhat or strongly support a new tax on billionaires, according to a poll the unions released Monday. When asked whether they would prefer taxing proposals versus cutting funding for K-12 schools, 81% of the survey’s respondents chose increasing taxes on the wealthy, according to the poll conducted by a D.C.-based firm Hart Research Associates.
The push for a billionaire’s tax comes as advocates, city officials, and state lawmakers worry that Gov. Andrew Cuomo’s budget proposal would shift the giant Medicaid program costs to New York City along with other localities, and that, in turn, would mean cuts for public schools, as well as other city services.
Cuomo’s budget proposal could mean $1.1 billion in new Medicaid costs for New York City alone, city officials estimate, which they say doesn’t account for other costs the city has to shoulder, such as education.
While Cuomo is proposing about a 2% increase in spending for New York City schools, city officials estimate that would fall $136 million short of what the city was expecting.
The state says the city is exaggerating the potential impact, saying a more realistic Medicaid cost is $212 million.
“[The] potential risk is about the future of our children: $136 million shortfall for education and real consequences for our kids in our schools,” said Mayor Bill de Blasio during a state budget hearing in Albany on Monday that focused on local governments. “This would mean the equivalent of removing 400 social workers and guidance counselors from our schools. That is what this cut could lead to in addition to ending programming for restorative justice that has been successful in reducing the need for suspensions and creating a safer school environment.”
The unions claim that more than $12 billion could result from a new tax on 112 billionaires living in the state, along with new income tax brackets for those who earn more than $5 million.
“It’s hard to walk down some Manhattan blocks without bumping into a multimillionaire,” said Andy Pallotta, president of New York State United Teachers. “So while some say it may be hard to consider tax proposals in an election year, we say that it’s hard for our schools to go without the social workers, classroom technology and supplies they need because the state wouldn’t ask the ultrawealthy to pay their fair share.”
City Council Speaker Corey Johnson and Comptroller Scott Stringer, who also attended Monday’s Albany press conference, joined others in swatting concerns that such a tax would cause New Yorkers to move out of state. The state hasn’t seen “an exodus” of New Yorkers, despite state and local tax deductions mostly eliminated on the federal level, Johnson said.
“We need to be smart and thoughtful about this, and that’s why we should be raising taxes and creating new revenue based on the wealthiest New Yorkers who for far too long have been underpaying their taxes,” Johnson said. “Pay your fair share, kick in a little bit more, so that the19% of New York City residents who are living below the poverty line — so that they’re not hurting in this budget.”
More revenue would allow the state to pay what it owes for Foundation Aid — the formula that sends extra dollars to high-needs districts but hasn’t been fulfilled to the level promised when it was created more than a dozen years ago, Pallotta said.
But it’s not clear that more money would go toward Foundation Aid — especially under the leadership of a governor who has tried to change the formula and has said there is no longer a legal obligation to boost those dollars by levels that advocates, policymakers, and lawmakers have asked for.
Cuomo has proposed an $826 million increase for education next fiscal year — less than half of what the state’s top education officials have requested. In an effort to ensure more education dollars are going to the neediest districts, Cuomo is also proposing shifting the formula for Foundation Aid by folding in ten separate formulas that are based on school districts’ expense logs. That suggestion has irked some state education groups, who argue that such a move could hurt districts’ ability to thoughtfully predict how much money they’ll get every fiscal year.
Calling for a new tax on the ultra-rich isn’t novel and has been raised for several years, supporters acknowledged Monday.
Democratic presidential candidates Elizabeth Warren and Bernie Sanders have proposed wealth taxes to cover big ticket items like health care and college tuition, but financial advisors have questioned whether the estimated revenue would come through given how some wealthy individuals find ways to reduce or avoid their tax bills, according to a recent New York Times article.