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SNDREW CUOMO TELLS FLANAGAN TO TOLL EGGS WHILE HE BETS AND PRAYS AT GULFSTREAM PARK ON SUNDAY APRIL 16 2017
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Gov. Andrew Cuomo Proposes New Fees to Fill Budget Gap
Democratic governor refers to several fees as ‘revenue actions’ instead of taxes
New York Gov. Andrew Cuomo releases his proposed state budget during a news conference at the Executive Mansion in Albany, N.Y., on Tuesday. PHOTO: HANS PENNINK/ASSOCIATED PRESS
ALBANY—A $25 increase on certificates of title from the Department of Motor Vehicles, an expansion of online sales taxes, and a 5.5% charge on Uber rides outside New York City.
These are among the new fees in Gov. Andrew Cuomo’s budget proposal that have become a sticking point in negotiations with legislators.
Other proposals in Mr. Cuomo’s budget include a fee on permits for movie theaters to sell alcohol, a slightly higher cigar flat tax, a new 10-cent per-milliliter tax on e-cigarette vapor, and a new charge of as much as $1.20 on prepaid cellphones.
Additionally, sales tax for online purchases would be expanded to include transactions in which the seller is out of state but the buyer is in New York.
Mr. Cuomo, a Democrat, has played down the proposed fees. In remarks laying out his budget plan last week, he touted the renewal of a surcharge on the state’s highest earners as filling a budget deficit and said the only new fee was from the DMV.
In his published summary of his budget proposal, a number of fees are referred to as “revenue actions” instead of taxes. On Monday the governor’s office said legislators are overstating the amount of new tax revenue in his proposal.
But the small fees in the fine print of Mr. Cuomo’s budget proposal have provided ammunition for conservative legislators, many of whom see it as an easier battle than fighting Mr. Cuomo’s tax on millionaires.
“This budget shows the government thinks they can go back to the taxpayers like they’re ATMs,” said Assemblywoman Nicole Malliotakis, a Staten Island Republican who has been vocal about the fees.
The Senate GOP and Assembly Democrats released their analyses of Mr. Cuomo’s budget proposal this week, and both houses put the total new revenue from fees and taxes at just over $800 million, including the first year of the millionaire’s tax.
Senate Republican Majority Leader John Flanagan said Monday he was surprised by that amount since the governor had told him there would be “basically nothing” by way of new taxes in his public remarks.
The governor’s office said the math in those analyses is “fuzzy” and the Senate’s analysis is “a smokescreen to mask…support for giving a tax break to millionaires at the expense of the middle class.”
Some in the Senate GOP have pushed back on the millionaire’s tax, but others have recently expressed acceptance of the concept.
The governor faces a budget deficit of more than $1 billion, and the fees could help fill the gaps, though he has said the deficit is mostly covered by the millionaire’s tax, an income tax surcharge on residents making more than $1 million.
Mr. Cuomo’s office also said the millionaire’s tax shouldn’t be categorized as a new tax since it is a renewal, but others disagreed because the existing tax would expire if Mr. Cuomo doesn’t renew it.
A spokeswoman for Mr. Cuomo said the other fees are “actions that either close unintended loopholes, continue this state’s successful smoking-cessation efforts, or makes sure the cost of activities are borne by the people who use them instead of taxpayers writ large.”
Conservative fiscal groups and legislators said, taken as a whole, the fees are burdensome to taxpayers and could accelerate the state’s population decline.
Mr. Cuomo has pointed to his budget proposal’s renewal of a tax cut on middle-class brackets as increasing affordability, and his annual 2% cap on spending growth as showing restraint.
The legislature and the governor have an April 1 deadline to agree on the roughly $152 billion budget.
Write to Mike Vilensky at mike.vilensky@dowjones.com
