ALBANY – Gov. Andrew M. Cuomo in his new state budget dubbed them “loophole closures,” “reforms” and “modernizations.”
Others call them tax increases.
And, like governors before him, Cuomo is relying on hundreds of millions of dollars to help him balance his 2017 budget and pay for spending increases he wants lawmakers to embrace.
Add in his call to extend an expiring tax on wealthy taxpayers and the “revenue actions,” as Cuomo’s budget calls them, amount to $5 billion in new taxes or extensions of taxes and fees set to expire.
The governor, in his public unveiling of the budget Tuesday night, mentioned only one fee increase – affecting motor vehicle fees.
But the budget is sprinkled with an assortment of what critics call nuisance taxes that make the state a more expensive place to live.
“Albany gets addicted to these taxes and fees, and they never go away,” said Michael Durant, director of the state chapter of the National Federation of Independent Businesses.
“This budget is filled with nickel-and-dime tax increases,” he added, saying the cycle of such fee and tax hikes has a long-term effect on the financial health of New York’s small businesses.
Besides businesses, consumers will be asked to give more money to Albany under the Cuomo plan.
Among the details:
* A plan to “modernize sales tax collections to reflect the internet economy,” requiring internet companies to collect state sales taxes on online sales of tangible property.
That will bring the state $68 million this year and $136 million next year. State officials said it is meant to capture sales not now covered under the state’s online sales tax system, such as products sold by third party sellers like Amazon.
* A cap on tax benefits for some residents enrolled in the STAR property tax break program.
Lawmakers say this will especially hit homeowners living in communities where property taxes rise following a revaluation process. The savings for the state government: $50 million.
* A “cigar tax reform,” which will change the way taxes are calculated from a percentage of wholesalers prices to a 45 cents per cigar tax. That will bring $23 million to the state when fully effective next year.
* Charging an alcohol sales permit to movie theaters that want to get in on the governor’s plan to permit wine and beer sales at all theaters. This will bring a modest $125,000.
* Extending an expiring fee imposed on natural gas and oil production values. The revenue number for that could not immediately be found in the budget.
Morris Peters, a Cuomo budget division spokesman, said Cuomo’s budget again caps the state-funded portion of the budget below 2 percent, and includes continuation of a tax cut for families earning under $300,000 that he said will benefit six million taxpayers.
“What you’re talking about are actions that either close unintended loopholes, continue this state’s successful smoking cessation efforts or makes sure the costs of activities are borne by the people who use them instead of taxpayers writ large,’’ he said, of the tax and fee hikes.
During his State of the State tour and again on Tuesday night, Cuomo sought to highlight the savings his budget will bring residents.
He touted continuation of a program that lowered tax rates for people making up to $300,000 a year, a plan to offer free tuition for some public college students and higher tax credits to help New Yorkers pay for child care services.
But, he told legislators Tuesday that he also wants to extend for another three years an income tax surcharge on wealthy New Yorkers, such as married couples who jointly file their taxes and make $2.1 million or more a year.
That tax is worth $683 million for the 2017-18 budget and $3.4 billion the following year, according to budget documents.
Take that tax out of the equation, and the budget still counts on hundreds of millions of dollars in new or extended tax increases in the coming two years.
Many involve complex portions of the state’s tax code, such as a tax increase on the sale of partnership interests by non-residents or the “loophole closing” of a tax on certain co-op apartment sales real property gains.
There is also a $5 million increase affecting S Corporations and others.
And there is $140 million the governor wants to count in his budget by making permanent charitable deduction limits for people making over $10 million a year.
Some taxes and fees are industry-specific.
Consider $20 million that will come from a plan to “clarify” that property used in the production and distribution of electricity, natural gas, steam and water delivered through pipes is not eligible for a state investment tax credit.
Other taxes and fees are placed directly on consumers – or passed along by companies whose products they buy.
Cuomo intends to regulate and tax vapor products, such as e-cigarettes and hookah pens. His budget states that such products carry addictive nicotine and that their use should be covered just as cigarettes are under the state’s Clean Indoor Air Act.
Taxing the products will bring in $5 million, the budget stated.
The cigar tax law change is necessary, Cuomo’s budget states, to “remedy compliance and enforcement issues that have arisen because of changes in the business practices of the cigar industry.” Such changes have “created uncertainty, disparate results among taxpayers and significant revenue losses,” the budget stated.
Overall, the budget anticipated a 28 percent increase in motor vehicle fees.
The largest: $81 million expected by raising the DMV fee charged to consumers for new and duplicate vehicle certificate of titles. New titles would cost $75, up $25. Last year, three million vehicle titles were issued in New York.
The budget also included a tax on certain real estate transfers and a new $5 charge for state-issued ID cards for real estate agents.
“If it looks like a duck, walks like a duck and it quacks like a duck, in New York state it’s a tax. The governor can call them a fee. He can call them ducks if he wants. But they are taxes,” said Sen. James Tedisco, a Schenectady County Republican.