Cuomo unveils budget plan, calls for big tax changes

ALBANY (AP) — New York Gov. Andrew Cuomo vowed to fight back against Washington Republicans on Tuesday with a $168 billion state budget proposal that lays out spending on schools and mass transit while also confronting greater uncertainty in federal funding.

The Democrat said he’ll urge lawmakers to consider restructuring the state tax system to soften the blow of the new federal tax overhaul enacted by Republicans. One idea is a new payroll tax which would largely replace the current income tax, an ambitious idea that already faces challenges with New York’s Republican lawmakers.

“We’re looking at all options,” he said, adding that a report from state tax officials on possible changes will be released Wednesday. “We don’t want to make a bad situation worse.”

The new federal tax code sharply limits a deduction for state and local taxes. That deduction had been especially popular in high-tax states like New York, where many homeowners now face large increases in their federal tax bills.

The spending proposal released by Cuomo on Tuesday contained few specifics about any tax changes, which would be worked out with lawmakers over the next few months. Lawmakers hope to approve a budget by April 1.

Cuomo’s proposal holds most spending flat in order to eliminate a $4.4 billion deficit. It increases education spending by $769 million and sets aside more than $400 million for work on New York City’s beleaguered subway and transit system. Cuomo also proposed a new surcharge on opioid prescriptions to fund efforts to fight addiction.

At one point in Cuomo’s speech a Democratic lawmaker, Assemblyman Charles Barron of Brooklyn, stood up and heckled the governor, criticizing him for not setting aside more money for public education. “Tax the millionaires!” he said. Cuomo told him to listen to his entire proposal before taking issue with it, and noted that state education spending is at an all-time record high.