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Cuomo to Covid Volunteers: Pay Up

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Cuomo to Covid Volunteers: Pay Up

The Wall Street Journal May 8, 2020
EconomicsTaxBudget
Urban PolicyNYC

The governor imposes New York income taxes on the health-care workers from other states who answered his call to come fight coronavirus.

When Gov. Andrew Cuomo appealed in March for health-care workers to come to New York and help fight the Covid-19 epidemic, some 21,000 people from around the country volunteered. Thousands came, toiling under difficult conditions and earning the admiration of New Yorkers.

Now these workers are learning they’ll make another contribution to the state. Mr. Cuomo said earlier this week they’ll have to pay state taxes on income earned while they were in New York. Heroes a few weeks ago, they are now pawns in a struggle between Mr. Cuomo and Washington.

“If we don’t get more money from Washington, we can’t fund schools at the rate we want to fund them. We are in dire financial need,” Mr. Cuomo said in explaining why the state couldn’t afford to provide what he called “subsidies” to guest workers.

New York faces enormous financial challenges because of the closing of much of its economy. Mr. Cuomo has extended rules keeping all but essential businesses closed and said that his state, with about a quarter of all cases nationwide, will be among the last to reopen.

Even so, New York enacted a $177 billion budget in April, only $1 billion less than what Mr. Cuomo proposed in January, before Covid-19. The plan banks on $10 billion in federal aid beyond the $40 billion that New York has received for coronavirus health-care costs and relief for businesses and individuals.

He has since lobbied incessantly for more aid, sparring with U.S. Senate Majority Leader Mitch McConnell, who said he’s holding off on “a vast new rescue package” for state and local governments until it’s clear what happened to the $2.8 trillion already committed. Mr. McConnell also enraged Mr. Cuomo by suggesting states be allowed to go bankrupt to deal with obligations incurred before the crisis.

Mr. Cuomo claims New York deserves more aid because it is a “donor” state, contributing more money to the federal government in taxes than it gets back in spending. That argument might be more convincing if the state’s heavily Democratic congressional delegation didn’t consistently support higher federal tax rates, which take more money proportionally from New Yorkers than from residents most elsewhere because of the state’s higher incomes. They asked for it.

Meanwhile, visiting workers will have to pay New York’s high taxes, while their home states may also dun them on the same income. They could be excused for wondering about New York’s gratitude.

This piece first appeared at The Wall Street Journal (paywall)

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Steven Malanga is the George M. Yeager Fellow at the Manhattan Institute and a senior editor at City Journal. This piece was adapted from City Journal.

Photo by Al Bello/Getty Images

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