Over the past few years, North Brooklyn has developed into a stronghold for democratic socialist politics. Two of our state elected officials, State Senator Julia Salazar and Assemblymember Emily Gallagher, are both involved with the local branch of the DSA (Democratic Socialists of America). Currently, the DSA and other activist groups are in the middle of their campaign to push for the state legislature to pass the Invest in Our New York Act, a slate of six bills designed to generate $50 billion in revenue through taxing the most wealthy New Yorkers.
A March 25th virtual town hall led by Gallagher, alongside other activists, demystified the annual budget process and showed exactly what is at stake for millions of working class New Yorkers, and how an extra $50 billion in revenue would be put to use statewide. Here’s what you need to know about the Invest in Our New York Act.
New York State’s finances are currently not great.
Thanks to the ongoing coronavirus crisis, the embattled Cuomo administration announced that they are facing a $59 billion budget deficit through 2022. The situation in New York state is particularly dire, thanks to the state’s position as one of the country’s largest economies. We have a greater income per capita than Sweden, and if we were an independent nation, our economy would be the 10th largest in the world (that’s larger than Canada’s economy). According to the Wall Street Journal, “New York’s state government lost an estimated $14 billion in the current fiscal year and $16 billion in the coming fiscal year. Transportation authorities around New York City expect to take in $15 billion less revenue due to drops in subway, train and air passengers.”
New York City itself is projecting $13.5 billion in shortfalls. This means that our public schools won’t be properly funded, as well as other statewide programs like Medicaid and the MTA. This budget deficit is unfolding as the richest New Yorkers get richer. “New York’s billionaires grew $87.7 billion richer during the pandemic — to a total net worth well over $600 billion” the campaign’s website states. New Yorkers everywhere have lost income, jobs, and are facing food insecurity and evictions. Wealth inequality was rampant before the pandemic, but the pandemic certainly exacerbated the situation.
What exactly will these bills do?
Essentially, the idea behind the ongoing campaign to #TaxtheRich is that New York has more than its fair share of billionaires and other high wealth earners. Raising taxes on these individuals and their various forms of wealth alone would open up a new stream of revenue so that the state could continue to pay for programs and services that New Yorkers so desperately need. “Governments in other industrialized democracies collect much more tax revenue, proportional to GDP, than New York State” says the campaign’s website. Our current tax system means that “those who earn the most pay the smallest share in taxes.” If these bills were passed, it means that taxes won’t go up for 95% of New Yorkers – just the richest 5%.
The Invest in Our New York Act actually comprises six different bills: Progressive Income Tax, Capital Gains Tax, Heirs’ Tax, Billionaire’s Tax, Wall Street Tax, and Corporate Tax, each of which would generate a few billion dollars.
What is the budgeting process like in the state government?
On the virtual town hall on March 25th, Assemblymember Emily Gallagher elucidated how the state legislature budgeting process works. The process lasts January to April. Essentially, New York state uses an executive model for budgeting, which requires the Governor to release a budget to the state legislature, which functions as a starting point for negotiations. The Senate and Assembly work on their own budgets with this in mind, so the process is about how to reconcile the three different visions – the governor’s, the senate’s, and the assembly’s. According to Assemblymember Gallagher, Governor Cuomo has typically released very austere budgets in the eyes of the socialist cohort of legislators within the state legislature.
The Invest in Our New York Act is a goal for how folks would like the budget to look like, but it’s likely not the end of the story. It’s what we would have in an ideal world. The socialists asked for a lot in the budgeting process, and they will end up getting some of it in the final negotiations. The campaign is seeking to pressure other legislators to support this vision of the budget. Even if the Act itself doesn’t pass, it alerts everyone to a bold way of thinking out there.
Wait, socialists? I hear they’re eating rats in Venezuela…
That’s not what this is. Democratic socialism is an ideology that emphasizes people over profits. It believes that decisions should be made by the people who are affected most by them, and prioritizes the needs and voices of the working class over corporate interests. Senator Bernie Sanders is an example of a democratic socialist. Democratic socialists are more aligned with strong welfare states like in Scandinavian countries. They do not believe in a centrally planned economy, like in the Soviet Union. As for Venezuela, though their politics are socialist in name, under Nicolas Maduro, the country is largely an authoritarian state, which is antithetical to democratic socialism. If this passes, I guarantee that you won’t have to eat a rat.
The budget is supposed to come out on April 1st. Historically, Governor Cuomo has been loath to increase taxes on the wealthy, though without more federal aid, he might be in a position where he can no longer deny the option.