Governor Cuomo is in the unenviable position of creating a budget while faced with a $10 billion deficit. Unfortunately, his decision to end the temporary income tax surcharge on high-earning New Yorkers will cut off a crucial revenue source that would have brought in $1 billion in revenue this year and $5 billion next year.¹ Instead, he proposes to cut approximately $400 million to critical human services, leaving nonprofits with the difficult task of deciding who to lay off and what services to close.
Governor Cuomo’s proposed budget attempts to close the $10 billion budget gap primarily through cuts, including reductions to Medicaid, education, and human services. His proposal includes $50 million in cuts to youth services, $15.7 million in cuts to New York City Homeless Shelters, and the zeroing out of Temporary Aid to Needy Families (TANF) programs – a cut of $138 million.
Extending the Personal Income Tax (PIT) surcharge, a tax increase on the top five percent of earners (single filers with an income above $200,000, and joint filers with an income above $300,000) would help stave off some of the worst budget cuts and help preserve vital services that more New Yorkers than ever before are relying on to survive this recession. The decision not to pursue revenue options creates a tear in the safety net, jeopardizes economic recovery, and means job losses across the State.
According to the State Labor Department, New York has already lost 44,000 State and local government jobs over the past two years – a greater decline than in the finance/insurance industry or construction.² Human services employ about 1.2 million people, or 17 percent of the State’s workforce, and consume millions in goods and services, reinvesting financially in New York’s economy. A loss of funding to the human services sector means a loss of jobs and spending in struggling communities. Nonprofits have faced broad cuts over the past two years and have already cut back on programs and laid off staff. The Governor’s proposed budget ensures that more programs will close, that some nonprofits will be out of business entirely, and the people they employ, and serve, will be out of luck.
At the same time that the Governor does not want to tax the wealthy, his budget includes a new fee of $60 for background checks on child welfare workers (up from $5), which he hopes will generate $12 million in revenue for the State. The message here seems to be that while taxing the wealthy is not an option, charging low-income workers who help children in need is a good way to generate revenue for the State.
In the long term, the State needs to examine the tax structure of the State and all its subdivisions and recommend the best use of taxation to ensure that economic recovery reaches all areas of the State, that decent jobs are available for all who want to work, that the social safety net for the poor and needy is adequately maintained, and that the budget is sustainable over time and accepted by all classes of society.
In the short term, the State must ensure that its necessary functions – including keeping its commitment to care for its neediest citizens – be fully funded and efficiently operated. Getting through this period of recovery and helping New York reach its full potential requires the shared sacrifice of all of us. We should not be putting the burden of recovery only on poor and working-class New Yorkers. To achieve a full and fair recovery the State must extend the personal income tax surcharge and restore funding to human services.
To read more about the Governor’s proposed cuts to human services, and their impact on New York, visit our website at http://www.whocares-ido.org/budgetCuts.html.
Contributed by Michelle Jackson
Of the Human Services Council of NYC