On the subject of New York’s highest-in-the-country tax burden, Gov. Cuomo started his term with admirable clarity. As he embarks on his reelection campaign year, he’s in danger of losing it.
“I say no new taxes, period,” Cuomo proclaimed on his inauguration day in January 2011. He also said: “This state has no future if it is going to be the tax capital of the nation.”
Those welcome and seemingly definitive words had been a mantra of his 2010 campaign, and were the guiding principle of his 2011 budget — which closed a $9 billion deficit without asking citizens to pay more.
But that was before the Occupy Wall Street movement put income inequality on the political map.
It was before Tea Party extremists in Congress gave fiscal conservatism a bad name with many Democrats.
And it was before Cuomo put asterisks on his no-new-taxes pledge by choosing to extend or modify certain levies rather than letting them expire as scheduled.
Most of all, it was before Bill de Blasio made taxing the rich a centerpiece of his mayoral campaign — and won in a historic landslide.
The political winds have shifted, and Cuomo’s once-crystalline anti-tax rhetoric has gotten murky.
Here is his latest statement on de Blasio’s proposal, which would finance expanded pre-kindergarten and after-school programs by boosting the city’s tax on people who make $500,000 and up by half a point, from 3.86% to 4.41%.
Pre-k “is the right service, it is the right reform, it is the right initiative, but all of these issues are complicated,” Cuomo said Monday. “With this mayor and with myself, I’m very confident about the relationship and the partnership and the good will — we’ll figure these things out.”
Wiggle words like those have some business leaders worried that Cuomo will cave to de Blasio’s demand — which would send a terrible message to investors around the world about the city’s economic climate.
Cuomo insiders deny that his opposition to new taxes has changed — and say he has held his fire on de Blasio’s proposal to avoid raining on the mayor-elect’s parade and alienating a friend and political ally.
They note, too, that he poured cold water on de Blasio’s plan in a meeting with the Daily News Editorial Board last month — raising concern that it would chase the wealthy to lower-tax states: “They’ll say, ‘I’m going to Florida.’ I believe that,” he said.
Still, he has waffled on taxes in the past. After pushing to let a temporary income tax surcharge on the wealthy expire as planned at the end of 2011, he changed his mind at the last minute and continued the surcharge at lower rates.
And he has yet to draw a no-new-taxes line in the sand with de Blasio.
If Cuomo won’t strongly and forthrightly make the case against tax hikes, who in New York politics will?
Mayor Bloomberg — who, for all his political differences with Cuomo, always had his back on this issue — is leaving the picture.
Democrats who dominate the City Council and the state Assembly will be fully on board with de Blasio’s plan, as are the Democrats who make up the minority in the Senate.
Another key player, Senate Independent Democratic Conference leader Jeff Klein of the Bronx, has also endorsed the pre-k tax hike — meaning there might well be enough Democratic votes to pass the measure if it comes to the floor.
That means Cuomo’s last, best allies in the Legislature are Senate Republicans under Dean Skelos — who are a minority on their own, but share power in an increasingly awkward arrangement with Klein and his IDC.
It could be Cuomo and the Senate GOP against the world — which is a lonely place for a Democratic governor to be when doing battle with a newly elected mayor.
But to paraphrase Maggie Thatcher, this is no time to go wobbly, governor.
Despite Cuomo’s properly tight-fisted budgeting — which has held overall spending below inflation — the Tax Foundation still ranks New York No. 1 for high taxes and dead last for its business tax climate.
The state’s economy is still hurting for decent jobs as a result.
And New York will never turn that around until it sheds its well-earned reputation as the Vampire State.
Cuomo himself has tried to fix that reputation by capping property taxes and creating tax-free havens for business start-ups on selected university campuses. He has also made plain that he will include some kind of tax cut in his budget for 2014, when he’s running for reelection.
But whatever good those gestures do in boosting the state’s image with investors would be negated if he goes along with a significant tax hike on the financial capital of the world.
Cuomo’s promises are at stake. So are de Blasio’s. This will get very interesting.
whammond@nydailynews.com
