In an open letter to New York City officials on Tuesday, a group of 250 business leaders asked the city not to raise taxes as they struggle to get back on its feet after over a year of economic hardships from the pandemic.
— Partnership for NYC (@Partnership4NYC) March 23, 2021
The letter is addressed to Democratic Governor Andrew Cuomo, Leader Andrea Stewart-Cousins and Speaker Carl Heastie, telling the government officials that the leaders felt the need “to express alarm at plans to enact the largest spending and tax increases in the state’s history.”
The leaders add that the “current budget proposals” will make it more difficult for New York to recover from the devastating economic impact caused by the coronavirus pandemic over the past year.
Reuters reports, “New York’s fiscal year 2022 budget projects a $37 billion revenue loss over four years due to the pandemic. Budget plans have called for raising $1.54 billion and $1.4 billion in the next two fiscal years on taxable income greater than $5 million.”
The letter states,
The American Rescue Plan, for which most of us advocated, is providing $1.9 trillion in federal funding to eliminate the need for new state and local taxes this year. Once we are on a path toward restoring more than one million jobs and thousands of small businesses that New York has lost in the past twelve months, there may well be need to raise new revenues to fill the gaps in our education, health and social welfare systems.
At this moment, however, significant corporate and individual tax increases will make it far more difficult to restart the economic engine and reassemble the deep and diverse talent pool that makes New York the greatest city in the world. We are not alone in this view; among others, the nonpartisan Citizens Budget Commission has said these tax increases are “both unnecessary and economically risky,” thanks to federal aid and higher than expected tax receipts in 2020.
The business leaders add that the pandemic has shown that people can work from anywhere, and increasing taxes in New York will make it more difficult to bring employees back to New York who have relocated elsewhere over the past year.
“This is not about companies threatening to leave the state; this is simply about our people voting with their feet,” the letter continues, stating that new taxes could lead to companies moving their businesses to other states “where the talent wants to live and work.” The leaders use the example of the 1970s when half of the city’s Fortune 500 companies left New York “and it took thirty years to recover.”
The letter continues, stating that the coronavirus pandemic “has also put a spotlight on the inequitable condition of Black and Latinx communities, low-wage workers and immigrant populations who were struggling to survive in our high-cost cities in the best of times but have been ravaged during the past year. We understand your need to respond to these urgent human needs and we will continue to support these efforts through expansion of partnerships for education and workforce development, hiring and small business assistance.”
The leaders make the point that COVID-19 has likely affected the region in ways that are not fully known yet, adding that “a healthy state economy” needs government and businesses to be able to work together.
The letter closes with the plea for government leaders to “hold off on major tax and spending changes” until the coronavirus pandemic is in the past, “and the path to recovery is better defined.”