On Fred Dicker’s show today, Governor Andrew Cuomo was aggressively questioned by Dicker on the details laid out in a Wall Street Journal article this morning about a possible grand tax code restructuring. Dicker tried every angle to get the Governor to say whether elements of a continuation of the so-called “millionaires’ tax” would be part of the restructuring.
Cuomo wouldn’t bite. He continued to argue that whatever plan he comes up with for closing the estimated $3.5 billion budget gap next year will be built on a broad economic program rather than a budget calculation.
“We're not going at this as a budget exercise," the Governor told Dicker. “In the past the exercise has been how do you close the gap--how do you fill the hole? This is an economic problem not a budget problem: How do you create jobs in the state, at a time when you have this national economy and the national current is running against you?"
As we’ve noted in the past, the Governor was reported to be looking for a way to “evolve” on the millionaires’ tax issue. Cuomo is a Big Idea guy. And this is one of those Rahm Emanuel-esque moments where a crisis can turn into an opportunity—at least for Cuomo.
That’s surely one of the reasons why Cuomo refused to say raising taxes was off the table. In a sense, it’d be pure Cuomoian genius: present a broad plan for improving the economy, partly through restructuring a (perceived) antiquated tax code, which will undoubtedly provide pro-business incentives, while “expanding” the tax base. This could mean many things, but most likely would incorporate some form of higher-income increase, without ever mentioning the words “millionaires’ tax.”
“If you use the tax code right, it's a potent economic generator. If you use it incorrectly, you can stifle business,” said Cuomo, who acknowledged he’s seeking economic advice ahead of the budget process and that “[m]any of the suggestions have to do with the tax code.”
“I have not decided on the economic program for the state, part of which will be how do you use the tax code to create jobs,” he later stated.
It was interesting to hear Cuomo invoke governmental gridlock repeatedly on both Dicker’s show and later on Susan Arbetter’s program. Cuomo, as a kind of grand visionary, speaks often about how many of our problems are just as much as crisis in confidence over government as anything economic or social.
As a theme, the Cuomo administration has been about restoring confidence in the public that the government can work—for them and with each other. Keeping chaos at bay in this year’s budget process, after such a stellar performance last year, is going to be a difficult task. There’s less fat to be cut, and the budget that must be balanced faces continued gaps. He would like to solve the state’s fiscal problems with a cooperative legislature.
“I don’t want Albany to be gridlocked like the Washington process,” he said on Arbetter’s show, invoking the supercommittee’s failure earlier this month and the debt ceiling debacle over the summer. The details of this grand economic plan, with a tax code reform tucked in there, will likely be the deciding factor in how much, if any, Albany gridlock we see early next year.