NYC’s Potential Path to Publish-Covid-19 Pandemic Financial Restoration
Concern for New York’s future continues as state lawmakers consider drastic measures that could hinder the city’s recovery from the Covid-19 pandemic.
New York Governor Andrew Cuomo proposed in January that taxes be increased for the rich and that state-level spending on Medicaid and schools be cut. Conservatives argue that higher taxes could cause wealthy taxpayers to leave the city, while progressives say the reduction in services could have a lasting impact on New York City.
New York City is heavily dependent on its affluent population. In 2018, the top 1% of the workforce accounted for 42.5% of total income tax levied by the city, according to the New York City Independent Budget Office. That was $ 5 billion in sales for the city.
“If they go, there will be a major financial crisis,” said Jared Walczak, vice president of government projects at the Tax Foundation’s Center for State Tax Policy. “How do you pay for all of these services? It affects everyone. The people who stay either have a higher tax burden or receive fewer government services.”
“There’s a real question for policy makers to answer now. How do you keep these people here? How do you make sure they want to come back after the pandemic?” Said Walczak.
However, Kim Phillips-Fein, a historian at New York University, said cuts in services could hurt the city in the long term. She found that austerity measures during the financial crisis of the 1970s led to mounting inequalities that have plagued the city since then.
Cornell University associate professor Cristobal Young also pointed out that only a small fraction of the wealthy are leaving their states for tax reasons.
Watch the video above to learn more about the situation in New York and the possible path to recovery.