Courtesy of New York State Senate

The New York State Senate's new budget is attempting to fix stagnate government funding and implemented new taxes and fees.

April 15, 2019

New York Senate Passes Budget, Includes New Taxes and Fees

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Last week, Democrats in the New York State Senate passed a $175 billion budget, bringing a variety of extensive changes that will be enacted in the coming years.

“This is the broadest, most sweeping state budget that we have done and for the ninth straight year it was both timely and fiscally responsible,” said Governor Andrew Cuomo, who championed the budget.

“This current state budget is good for Cornell. It funds higher education and student aid at previous levels and funds specific Cornell programs that provide research and service and outreach to New Yorkers and NYS government agencies,” Director of Government Relations for the university, Charles Kruzansky, stated.

The updated budget is good news for many taxpayers. The majority of the middle class residents can look forward to a lowering of income-tax rates, and state spending will continue to be restricted in order to close the $3 billion budget gap.

However, there are also a variety of new taxes and fees, like the Internet Fairness Conformity Tax, which will charge sales tax for all online purchases. A state-wide ban on plastic bags will also go into effect next year with a potential additional charge for paper bags.

Cornell students and Ithaca inhabitants will be subject to these new regulations.

NYS Budget Graphic

Kruzanksy weighed in on the terms of the budget. “Right now the [New York] economy is doing well and the state is bringing in more revenue year to year,” he said in an interview with the Sun.

This could be good news for Cornell — when the New York state economy is in decline, less discretionary funding is directed to schools and higher education to accommodate increased mandated costs like unemployment benefits and Medicaid, according to Kruzansky. With more revenue flowing into the state treasury, more money is available to be spent on Cornell, providing students with more resources and funding.

The new budget also solidified a permanent property tax cap. Depending on the rate of inflation, the growth in property taxes will be limited to two percent per year or less. “[The property tax cap] has set the scene for spending at the state, local and school district level under Governor Cuomo,” said Kruzansky.

The budget is also an attempt to fix stagnant government funding. “The state government agencies budgets are basically held flat. This includes SUNY budgets, and Cornell gets most of its state funding through the SUNY budget. The amount Cornell receives from NYS has basically been flat for ten years,” said Kruzansky.

According to Kruzansky, approximately 35 percent of Cornell’s funding comes from New York State, and the private colleges also receive direct aid from the state. Compared to other states, New York student aid is the most generous in the United States.

“For me, money was a big reason for choosing Cornell,” Sam Lustig ’21 told the Sun. “I recognized that getting access to in-state tuition meant a lot of benefits. For me, I’ve always had it in the back of my head that I wanted to go to grad school or law school in the future, and saving $20,000 a year would obviously help me do that.”

Prof. Ronald Ehrenberg, economics and industrial and labor relations, raised concerns about how the new budget would be adopted to Cornell in particular, as a university composed of both private and public colleges. “The budget basically does not provide any increased funding for operations for the state campuses at Cornell,” he said. “That’s the main problem.”

The new budget also specifically targets upstate New York as an area of vital importance.

“The upstate economy is a long-term problem that is the result of demographics — relatively few people coming into upstate, with the exception of a few places like Ithaca, and a steady outmigration of younger people,” said Kruzansky.

Ithaca’s ability to avoid the problems of other upstate regions such as fragile employment bases, older and poorer populations and slow economic development, according to Kruzansky, is largely due to Cornell’s presence.

Kruzansky noted that his team, which represents Cornell University before the executive and legislative branches of New York state government, wants to utilize higher education institutions like Cornell as a source of economic activity in New York State in the future.