New York governor says US government must fix state finances amid Covid-19

14 Jan 21

Washington must step in to help New York with the largest budget deficit in its history to stop the need for “extraordinary negative measures”, the state’s governor has said.

In a series of annual ‘state of the state’ speeches this week, New York state governor Andrew Cuomo, said Covid-19 had left the area with a $15bn deficit, with its economy having been ravaged by the virus.

He said the Covid-19 crisis was the federal government’s responsibility, because it had failed to warn New York at the outset of the crisis that the virus was already likely to be in the US and did not halt flights from Europe during the height of the continent’s first wave.

“New Yorkers cannot now be asked to pay the bill for federal incompetence,” said Cuomo, calling for Washington to financially support the state.

“If the federal government needs revenue, it should raise income tax on the wealthy to finance the states’ resurgence from this national devastation.

“That is basic economic justice and economic prudence.”

Cuomo said that for New York to close the financial gap with no federal help would require “extraordinary negative measures”.

He said raising income tax to the highest rate in the country on all income over $1m would only raise $1.5bn; postponing a tax cut for the middle class would save $500m; freezing labour contracts would save $1bn; and cutting education funding by 20% would save $5.2bn.

“Even after all of that pain, we would still need billions of cuts to health in the middle of a pandemic, and we would need to borrow billions at a cost to future generations,” Cuomo said.

He then outlined plans to allow online sports betting and legalise recreational marijuana use as ways to boost state revenue.

Cuomo went on to promise large investment in transport and affordable housing across the state, to aid the economic recovery from the pandemic, as well as a programme to support the arts, which have suffered during the crisis.

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