Gov. Cuomo threatens litigation if Biden fails to deliver $15B in New York aid

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Gov. Andrew Cuomo threatened to sue soon-to-be President Joe Biden if the federal government fails to deliver $15 billion in coronavirus pandemic aid to help New York State balance its budget.

“If Washington doesn’t provide New York State with our $15 billion fair share, we will pursue litigation,” Cuomo said Tuesday during his 2021-2022 budget presentation.

Biden will be sworn in as president on Wednesday.

“The legal crisis is legally and ethically Washington’s liability. President Trump is gone. But the damage to New York remains. The COVID assault on New York State in the spring was due to federal negligence,” said the three-term Democratic governor, who has long had warm relations with Biden.

“The new federal government didn’t cause the damage, but they are legally, ethically, and politically responsible for correcting it.”

Cuomo said he was hopeful that allies Biden, New York Senate Democratic leader Chuck Schumer, who is about to become majority leader of the Senate, and House Speaker Nancy Pelosi will deliver for the Empire State — but won’t let them off the hook if they don’t.

Cuomo laid out two options in the budget presentation — dependent on how much federal aid New York gets in the next federal coronavirus stimulus package.

The governor said the state will have to slash school funding by $2 billion, Medicaid by $600 million and impose 5 percent across-the-board cuts to New York City and local governments and social services by another $900 million if New York gets just $6 billion of an expected $350 billion earmarked for state and local governments under Biden’s proposed $1.12 trillion “American Rescue” package.

Cuomo also said the state would also be forced to consider raising state income taxes on the wealthy that would generate another $1.5 billion — from a top rate of 8.82 percent to 10.8 percent. In New York City, the combined state and local income tax rate on the rich would jump to 14.7 percent, highest in the nation. California has a top income tax rate of 13.3 percent, followed by neighboring New Jersey at 10.75 percent and Connecticut, 7 percent.

Even with these severe actions, Albany would have to borrow billions more to close the gap, the governor said.

But New York would not have to cut aid to schools, local government and services, Medicaid, or postpone scheduled raises for government workers if Biden and the Democratic-led Congress provide $15 billion in aid to close the budget shortfall.

Not only would New York not have to raise income taxes on the wealthy, Cuomo said, the state could move forward with scheduled income tax reductions to middle class New Yorkers.

As expected, Cuomo proposed legalizing mobile sports betting and recreational marijuana to generate revenues for state coffers. Mobile sports betting would generate $500 million in revenues for the state when fully operational, and taxes on pot are estimated at $350 million annually.

But Cuomo has picked a fight with state lawmakers on how to run the sports betting program. The governor wants to have mobile sports betting tightly controlled by the Division of the Lottery, which would hire one or two contractors to offer bets on sporting events.

Lawmakers have proposed to have mobile sports bets through servers set up at casinos, which have suffered massive losses in business during the pandemic.

“Question is, who makes the profits? Casinos or the people of the state of New York? I’m with the people,” Cuomo said.

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