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Cuomo turns to array of tax hikes to balance budget; Flanagan says 'No'

ALBANY — In some of Gov. Andrew M. Cuomo’s past state budgets, one would need a miner’s helmet and flashlight to find all the squirreled away tax and fee increases.

In the 2018 budget plan released Tuesday, Cuomo lays them out early and often, even listing in their own table of contents entry.

And there are many of what the administration calls "revenue actions," accounting for just shy of $1 billion in tax receipts for a hungry budget that will total $168 billion in the coming year.

There are little ones, like a tax hike on e-cigarette products, and another attempt at “internet fairness” by taxing third-party sales on places like Amazon and eBay.

And there are big ones, like the $500 million Albany could get in each of the next four years from nonprofit health insurance corporations that convert or are bought out by for-profit companies.

Cuomo, who has sought over the years to portray himself as a tax cutter, made no hiding of the fact that he wants to raise $1 billion in the coming year in new tax hikes, shifts or a term governor after governor have used: tax loophole closings.

Noting a combined $1.6 billion increase proposed for the state’s two biggest components — public schools and Medicaid — Cuomo said tax hikes are needed in the face of a projected $4.4 billion deficit.

“You can’t possibly get anywhere near where you want to be on education and health care unless you raise revenues. It’s just too big a deficit and the choice of cutting education or cutting health care, I don’t think is a place anyone wants to go to this year. So you have to raise revenue,’’ Cuomo said Tuesday in presenting his budget plan.

Senate Majority Leader John Flanagan, a Suffolk County Republican, offered a succinct response when asked if his GOP colleagues would go along with the Cuomo tax package: “No.’’

In the end, though, lawmakers in both parties will want to raise the levels Cuomo is seeking to spend on education and health care. Of those two areas of the budget, Assembly Speaker Carl Heastie, a Bronx Democrat, likened them to a brother and sister. “You love them both,’’ he said. He added: “If we want to spend more we have to find more revenues, and this is going to be a very challenging year in terms of revenues,’’ Heastie said.

Cuomo’s budget has given the Legislature a major head start when it comes to revenue raising ideas, including:

  • Creating a new tax on opioid drug sales, which is expected to generate $171 million, which Cuomo said will be used to help fund anti-addiction efforts.
  • Maintaining STAR property tax benefits at current levels, instead of proceeding with an expected 2 percent increase.
  • Deferring a number of business tax credits through 2020 and imposing new inspection fees on privately operated passenger carries, such as motor coaches.
  • Adding new patient costs on prescription drugs for those enrolled in the American Indian Health Plan.
  • Creating a new pre-licensing course for people to get a driver’s license and then charging them $8 apiece in order to raise nearly $1 million for the state.
  • Ending an energy services sale tax exemption and expanding a number of tax enforcement measures, such as a new effort to ensure all of New York’s cigar taxes are collected.

Cuomo also wants to go after health insurance companies that he said “just got a 40 percent windfall profit” as a result of the recently approved federal tax overhaul law.

"They weren’t expecting it. The health care costs wind up getting shifted to us. I think it’s totally justifiable to have a tax to recoup part of that windfall benefit,’’ he said of a plan to slap a 14 percent surcharge on underwriting gains from health insurance policies.

The New York Health Plan Association, which represents managed health care plans, said the Cuomo plan will raises costs for both employers and residents.

Among the biggest single revenue raisers is something Cuomo called an “opioid surcharge” of 2 cents per milligram of prescription opioids sold in New York that he said will be paid by manufacturers to raise $170 million to help combat the drug addiction problem.

“Opioid manufacturers have created an epidemic,’’ he said of the need for the tax.

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