Last night, the State Legislature struck a deal on the budget. According to the Times-Union, "In broad strokes, the agreement closes the state's estimated $16.2 billion budget deficit through $6 billion in federal stimulus dollars, $6 billion in cuts to an array of programs, and $4 billion in new revenue through an increase in the personal income tax on affluent New Yorkers."
Singles making more than $250,000 or families making $300,000-$500,000 will be taxed at 7.85%, up from 6.85%. Anyone (singles and families) making more than $500,000 will pay 8.97%. The tax hikes were previously expected to involve three income brackets, but the Daily News reports the $500,000-$1 million one at 8.47% was eliminated because it would generate the needed $4 billion. The tax hikes will be phased out after three years.
The 6.85% tax rate currently "kicks in for couples and joint filers making more than $40,000," the NY Times reports, and the Citizen Budget Commission deputy research director Elizabeth Lynam says, "Raising the personal income tax is going to make it harder for New York to recover economically." However, the Working Families Party executive director Dan Cantor hailed the move, "It’s a profound breakthrough for tax fairness. The era of phony prosperity has ended, and a new era of real shared sacrifice must begin."
Other highlights of the budget: Education spending remains frozen, $328 million to NYC will be reinstated, and healthcare cuts. Capitol Confidental has links on the bills, as they appear on the State Senate's website.
