'Serious as a heart attack': NY faces $2.3B shortfall; Cuomo blames tax overhaul
New York state is facing a budget shortfall to the tune of $2.3 billion, and Gov. Andrew Cuomo argues it's because New York is paying the price for President Donald Trump's signature legislative achievement.
The governor is blaming the Republican-backed federal tax overhaul that capped state and local tax deductions at $10,000 for the shortfall. He says it's prompting many of the state's richest residents -- who pay 46 percent of the state's income tax -- to either change their primary residence or leave New York entirely.
"It literally restructured the economy to help red states at the cost of blue states," Cuomo says of the tax law.
"A $2.3 billion drop in revenues at this point is as serious as a heart attack," says state Comptroller Tom DiNapoli. He says the SALT deduction cap is hurting middle-class families, too.
"I'm concerned about my neighbors on Long Island who don't necessarily have a second residence, and they can't just flip somewhere else," DiNapoli says.
But some economists say New Yorkers are not leaving because of the SALT deduction cup, but because they've been searching for greener pastures for years as a result of the state's own tax policies.
"The problems here are caused by the governor and his administration," says Long Island-based economic analyst Marty Cantor. "It's too expensive to live on Long Island and in New York state. Taxes are too high, people are leaving. It has nothing to do with Trump."
Gov. Cuomo is now calling on his colleagues in the Democrat-controlled state Legislature to spend wisely.
"The Legislature, through the budget process, has to reconcile what we would like to do, with what we can do," he says.
The state Senate minority leader is warning Democrats against raising taxes to balance the budget. East Northport Republican John Flanagan says, "Budgeting is about choices, and it's time for Gov. Cuomo and legislative Democrats to make the right ones."