My Testimony to the Queens New York State Senate Delegation State Budget Forum
Thank you for the opportunity to submit testimony.
I live on Crescent Street in the Dutch Kills neighborhood of Long Island City. State Senate District 59.
I serve my community as the Democratic State Committee Member for AD-36 and Chair of Queens Community Board 2. I am also Co-leader of Empire State Indivisible, a grassroots political organization that works to hold our elected leaders to account and engage New Yorkers in civic life.
My testimony has three parts:
- Enacting progressive taxation policies
- Concerns with the Governor’s budget proposal
- Fully funding the new statewide public campaign finance program
Enacting progressive taxation policies
Empire State Indivisible is part of the Invest in Our New York (IONY) statewide coalition that has the goal of rebuilding New York’s economy and shrinking our state’s economic inequality gap–which is the highest in the nation. In 2021, the IONY Campaign, in partnership with State Legislators, secured changes to our regressive tax system which have generated over $10 billion.
This year, we are calling on the Governor, Senate, and Assembly to continue raising public funds by increasing taxes on New York’s millionaires, billionaires and wealthy corporations. The IONY 2023 campaign includes proposals for progressive taxation so those who can afford to pay a little more, do so.
New York’s wealthiest individuals and corporations have benefitted from doing business in our State — from our workers, our natural resources, our public infrastructure, and a regressive taxation system that allows them to circumvent paying taxes equitably. The Governor, Senate, and Assembly must hold millionaires, billionaires and the state’s wealthiest corporations to account by increasing their taxes in the FY24 budget. Here’s how:
Make the State’s corporate tax permanent, lower the threshold for who pays, and increase rates on the wealthiest New York State corporations (S1980-Hoylman-Sigal / A3690-Kelles, Shrestha).
New York’s corporate tax rate has fallen from 8.5% in 2000 to a low of 6.5% by 2016. In 2021, the IONY campaign and the Legislature was able to secure a modest increase in the State’s corporate tax on New York’s corporations profiting over $5 million a year. This tax is set to expire on December 31, 2023. If the corporate tax expires, we will lose billions of dollars annually and the wealthiest corporations will get a needless tax cut at a time they are seeing record profits. We cannot allow this important reform to sunset.
Senator Hoylman-Sigal, Assembly Members Kelles, and Shrestha’s Corporate Tax bill can raise an estimated $10 billion for New York every year by making the State corporate tax permanent, lowering the threshold to corporations earning $2.5 million in annual profits and above, and raising the rates on the absolute richest corporations — those with $10 million or more in profits to 12% and those with $20 million or more in profits to 14%.
Institute a capital gains surcharge tax to capture lost revenue created as a result of a low federal tax rate on capital gains income. (S2162-Rivera / A2576-Kim)
Many ultra-wealthy New Yorkers make their money from regularly selling stocks and other investments — this is known as ‘capital gains’ income. People who earn ‘capital gains’ income pay very little in federal taxes due to how the federal government classifies capital gains income. By earning income this way, the wealthy avoid paying what they owe and thus take resources away from our communities.
Senator Rivera and Assembly Member Kim’s bill will enable New York to recoup that lost revenue and ensure that those who earn over $500,000 annually are taxed like the rest of New Yorkers are. According to the Fiscal Policy Institute, creating a capital gains surcharge tax is estimated to raise over $12 billion annually.
Overhaul New York’s broken inheritance tax and create a tax that treats inherited income as taxable income. (S2782-Brisport / A3193-Solages)
New York only places a small tax on very large estates when a person dies — as a result, people are allowed to inherit multi-million dollar estates as tax-free income. For example, in New York, a person can gain $5 million in inheritance and pay no tax on it.
Senator Brisport and Assembly Member Solages’ Heirs Tax bill would replace the existing inheritance taxes with an heirs tax that would treat inheritances as taxable income — beginning at $250,000. This would raise an estimated $3–4 billion dollars annually.
Most New Yorkers would not be impacted by this tax — as 99% of inheritances in New York are well under the $250,000 threshold and at $250,000 — the tax is a modest 2.5%. To ensure this bill only targets the wealthiest New Yorkers there are exceptions written into the law to exempt inheritances of primary residences valued under $2 million and small farms.
Establish a mark-to-market tax. (S1570-Ramos / A3252-Kelles)
The wealthiest people in our country don’t pay any income or wealth taxes on their biggest source of wealth, the rising value of their stocks and investment portfolios. They are able to use these gains to get huge amounts of cash through loans and other financial instruments and then pass their wealth to their heirs completely untaxed.
For New York, Senator Ramos and Assembly Member Kelles’ bill will create a yearly tax on assets that have accumulated value, requiring billionaires to pay income tax rates on their investment gains. This proposal would raise an estimated $24 billion in the first year and $1.5 billion annually after that.
Every year working-class and middle-class New Yorkers pay a tax on the increased value of their homes in the form of property taxes — billionaires should also have to pay taxes for their increased wealth.
Create additional progressive brackets within the state’s personal income tax. (S2059-Jackson / A3115-Meeks)
Since the 1970s, the richest have benefited from tax cuts at the state and federal levels. In 2021, the IONY campaign won an increase in the personal income tax rate of New Yorkers earning $1 million a year with progressive brackets at $1 million, $5 million and $25 million. This has resulted in billions of public dollars generated.
There is still work to be done to make New York’s income tax more progressive and recapture public dollars lost as a result of decades of tax cuts for the richest. Currently, people who earn between $300,000 and $1 million are in the same tax bracket and those who earn $1 million and $5 million are in the same bracket. This does not make sense.
Senator Jackson and Assembly Member Meeks’ progressive income tax bill will introduce ten new brackets, particularly focused on increasing taxes on the top 5%. This will raise an estimated $11 billion annually.
Many senators in the Queens delegation sponsor or cosponsor these bills. I urge all of you to push for the inclusion of this progressive taxation policy in the FY24 budget.
Concerns with the Governor’s budget proposal
The Governor’s budget proposal has some parts that will hurt our communities in Queens. In the Budget negotiation process, I urge the Queens State Senate delegation to reject the problematic parts of executive budget proposal and actively work to change the following:
- Instead of extending the existing corporate tax for three years, make this tax permanent and strengthen it as I have detailed earlier in my testimony.
- Precisely stipulate and oversee how the $1 billion slated for asylum seekers is used. This money must be used to truly help asylum seekers and not be subject to the unfocused plans of the New York City Mayor.
- Commit $10 million to the Climate Leadership and Community Protection Act as needed — instead of only $3 billion.
- Stipulate that the majority of the 800,000 homes proposed will be affordable — permanently in perpetuity.
- Include Good Cause, Housing Access Voucher Program (HAVP), and Tenant Opportunity to Purchase Act (TOPA).
- Do not allow for a revival of the 421-a or Start-Up New York programs. These are failed programs based in trickle down economic theory that serve only wealthy developers and corporations.
- Do not allow more charter schools in New York City as these schools will take away $1 billion from our public schools. We should be investing in and uplifting public education as this is how we invest in and uplift all New York students — our future.
- Do not increase the payroll tax to fund the MTA. This regressive tax will be capped so people who make $160,000 and below will pay the same as millionaires and billionaires. Instead, include in the budget and/or pass the eight bills that make up the “Fix the MTA” package that will fill the MTA deficit and improve service.
- Keep pay increases for homecare workers that were secured last year.
- Do not allow a cap on the minimum wage increase at 3% and secure an increase that will fully reflect the actual cost of living for most people, which varies regionally. Include in the budget and/or pass Senator Ramos’s bill that proposes not only raising the minimum wage but linking it to inflation.
- Do not allow changes to the bail reform laws as the data does not support the rhetoric propagated by the Governor, republicans, and media.
- Fully fund the new public campaign matching program which starts during the 2024 campaign cycle. I will detail the funding needs following.
There are countless additional needs that I have not detailed but that I hear from my neighbors as both a Democratic State Committee Member and Chair of Queens Community Board 2 . These needs include funding to protect and expand our abortion rights, increase civic engagement, and deeply invest in building or rebuilding physical infrastructure — all forms of housing including but not limited to public and supportive housing, hospitals, birthing centers, and mental healthcare, public schools, public parks, transit throughout the state, etc.
Fully funding the new statewide public campaign finance program
Lastly, I urge the Queens New York State Senate delegation to be accountable to the people of Queens and New York State by fully funding the statewide Public Campaign Finance Program in the final FY24 budget. This program will help us elect State lawmakers who will uniquely understand that they are accountable to the people and not big moneyed donors.
Empire State Indivisible is dedicated to policies that amplify the voices of everyday New Yorkers in our politics. We have been working alongside other grassroots groups in the Fair Elections for New York coalition since 2018 to advance small donor public financing in New York State.
Recently, Empire State Indivisible has been engaged in conversations with New Yorkers about the need to reimagine New York State’s taxation policy to be progressive not regressive and to end tax breaks to the wealthiest New Yorkers and New York corporations. In these conversations, many New Yorkers, people we have just met, pointed out the direct link between public campaign financing and enacting policies that put people first by investing in our communities.
The small donor public financing program, administered by the Public Campaign Finance Board (PCFB) at the State Board of Elections, launched on November 9, 2022. The 2024 legislative elections will be its first cycle. The PCFB requested $14.5 million for the program’s administration and $100 million for matching funds in its FY2024 budget request.
We appreciate the executive budget’s appropriation of $14.5 million for the agency’s implementation and administration costs. However, the partial allocation of $25 million for matching funds is far less than what is required to establish a robust program and instill public confidence in it. We encourage the Senate and Assembly to increase the appropriation for matching funds to the full $100 million requested by the PCFB.
It is essential that the PCFB receives adequate funding for both administration and future matching funds this year to help the program reach its full potential. Full funding will enable the agency to build candidate and voter confidence in the program’s solvency. It will also assure campaigns that they can plan their fundraising strategies around collecting small contributions from constituents instead of large donors.
The potential benefits of this program cannot be overstated. We fought so hard for this law because
- Public campaign financing amplifies community support for candidates. It makes it possible for folks from all walks of life to run and win their campaigns without needing to know or depend on people who can write big checks. Lowering the financial barriers to running successful campaigns is especially meaningful for voters who historically have faced obstacles in private wealth-based politics, including women, people of color, members of the LGBTQ+ community, and low-income individuals. Combined with voting reforms, this public policy brings more people into the democratic process.
- Large corporate contributors continue to spend huge sums on state elections, translating into disproportionate influence on our political process. Those contributors’ voices and opinions, and those of their lobbying firms, are often at odds with the solutions our communities need. These differences exist in tenants’ rights and affordable housing, real clean energy and climate solutions, good paying jobs, health care for all, public education, consumer protections, regulation of technology companies, democracy reform, civil rights, or ending police violence and mass incarceration.
Fully funding this program now is an investment in our democracy’s future at a time when many other states are retracting voting rights and severely limiting our democracy and democratic process.
A budget is more than just a financial plan, it is a statement of priorities. I urge the Queens New York State Senate delegation to use their power, entrusted to them by the people, to pass a FY24 State Budget that prioritizes the people — New Yorkers in Queens and throughout our State.