The New York State budget deadline for passage is April 1st. Since the first year of Andrew Cuomo’s tenure as Governor, getting the budget passed on time became a test of whether government was working or not. For decades before Cuomo came to office, the state budget was delayed, sometimes for weeks, occasionally for months. Somehow the state still functioned. Various political entities would claim it was more important to “get it right” than meeting some deadline. Recently, the New York Post wrote an editorial pretty much saying that same thing as they endorsed Gov. Kathy Hochul’s crime program and bail reform reforms.
In that same spirit of helpfulness, I propose that the Governor add a tax rebate program to the budget mix. Giving every person who files residential income taxes a $400 rebate would do much to help citizens cope with the rising price of gas and other necessary commodities like food and clothing. There is a similar proposal being kicked around in California but New York could enact a rebate more quickly.
A rebate is efficient at getting real money into people’s hands without getting bogged down in tax rate arcana, pitting industry or groups of taxpayers against one another and setting up a lobbyist battle royale. A rebate can be implemented quickly, and how the funds are used is the decision of each individual. Need to drive for work, a rebate helps. Need new shoes for the kids, a rebate gives one resources. In fact, a flat $400 rebate is very egalitarian. A firefighter, or school teacher, or small business person gets the same amount as a celebrity millionaire or tech billionaire.
Having worked on the New York City property tax rebate proposed by Mayor Michael Bloomberg in 2004, I have some familiarity with the arguments used in opposition to a rebate program, and the arguments that promote it. The arguments against are usually that the government knows better what that money should be spent on. Smaller class size or mental health programs, for example. Laudable, but there are already funds directed to education and other areas – every year. But this year, with inflation rising, and the turbulence from Ukraine roiling the oil and gas markets, there is a new factor that state budgeting should acknowledge and address. And that new factor affects everyone.
Why should the Governor consider it now? For one thing, the state has a tremendous surplus of money. The pandemic did not dry up New York finances, in fact state income and sales taxes ran ahead of projections. With the influx of federal pandemic relief funds, there are resources for the areas that warranted special help, and there is even some unrestricted federal aid. But only the state government has resources that can address so directly its citizens’ pocketbooks. Given the added state revenues, what is the argument for not helping taxpayers with their household expenses?
Putting money directly into the hands of people pressured by high prices, ensures that the money will be put to good use. Furthermore, it can be applauded by liberals and conservatives on that same basis and has the added benefit as proof that government can work for the common good, at least sometimes.
Finally, there is the old adage that good policy makes good politics. If Gov. Hochul seizes this idea, along with her crime agenda, she will be hard to attack from a regional or philosophic basis. The two tracks will play well everywhere, including upstate and in the New York City suburbs. But enough about political advantage. A tax rebate makes sense on so many other levels, that we can leave the electioneering for another time. Surely, we wouldn’t want politics to intrude on the budget process.
Bill Cunningham is the founder of Cunningham Strategies. He previously worked for the administrations of New York City Mayor Michael Bloomberg and Gov. Hugh Carey and was chief of staff and campaign advisor for Sen. Daniel P. Moynihan.