Today’s post is written by Politics and Other Stuff editor Paul Fisk
The MAGA wrecking ball approach to governance is inflicting incalculable harm on our nation, with more of it cynically timed to not take full effect until after the 2026 election. Blue states like New York are being hit particularly hard.
Already enacted federal actions will dramatically increase health care costs and could eliminate insurance for 1.5 million New Yorkers. The cuts increase hunger and food insecurity for 300,000 adults and children who currently benefit from SNAP. They negatively affect education, agriculture, and the environment. They move us backwards on climate change. They raise prices for state and local governments as well as families.
The unfortunate reality is that the harm already done will take years, if not decades, to repair. The dissolution of safeguards and norms, the dismantling of bureaucratic capacity to provide needed services, the loss of institutional memory, the destruction of data and research, and the loss of faith in our government by our own citizens and the rest of the world are not things that can be fixed overnight. The states must step up and salvage as much as possible.
The Fiscal Policy Institute, an independent, nonpartisan think tank, estimates New York state’s immediate budgetary loss over two years at $7.6 billion, roughly twice the state’s predictions, plus another $4.9 billion cut to the health care industry outside the state budget. Medicaid cuts included in the federal mega-MAGA bill may seriously damage or even result in closings at rural hospitals.
The state may be inclined to follow a previous plan for facing big problems: paper them over in election years with one-time actions and put off permanent solutions that often never seem to materialize. New York no longer has to plead poverty and an inability to do more.
We have a better alternative now: reinstate the Stock Transfer Tax, a major revenue stream that was in place from 1905 until 1981. It helped solve the New York City fiscal crisis in the 1970’s and it is needed again now. It could bring in at least $15 to $20 billion annually, and grow, according to an analysis by noted economist and Yale Global Justice Fellow James Henry.
We have a golden opportunity to enact a long-term fix that could solve not just the immediate problem but provide resources to make serious progress on filling financial gaps in health care, education, infrastructure, climate change and other areas.
New York can reinstate nearly painlessly this miniscule one-tenth of one percent sales tax on stock trades, which is far below typical brokers’ fees and would be paid to a great extent by wealthy financial speculators, day traders, and out-of-state investors. Some wealthy traders have been contributing part of their profits in hopes of protecting their interests.
Past objections to this surcharge have been credibly debunked in an article by James Henry and in a letter to colleagues from the Assembly sponsor, Phil Steck, a Democrat from the Albany area. It would be tragic if we let a privileged few prevent us from adopting an equitable, recurring and growing revenue source that could dramatically improve our state’s fiscal condition.
Our Democratic state government officials have the opportunity to stand up for their stated beliefs. This is a chance to show voters that Albany can act on their behalf and not, like Washington, just for the already-wealthy, whose contributions some may have become a bit too fond of receiving.
We can counter the cuts from Washington and create a permanent revenue stream with growth potential. It can be a win-win.
Tell your state representative that this is the year to do it: approve legislation (A1494/S1237) to create this revenue stream to address our major problems and get ahead of the devastating federal cuts that are coming in programs that are vital to New Yorkers.
Paul Fisk is retired from the NY State Budget Division and is a former City of Buffalo Budget Director.
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