Tax Hikes, Sports Betting And Marijuana: New York State Approves New Budget

New York lawmakers have passed the state budget for fiscal 2021-2022 totaling $ 212 billion, some of which will come from tax increases. How this budget will affect the lives of residents of the region, said the publication New York Post.

The state plans to generate new revenue through legalizing sports betting and recreational marijuana, among other things. The new item of expenditure includes the provision of unemployment benefits to illegal immigrants.

Key details of the budget package

Taxes

For individuals earning more than $ 1 million a year and for married couples earning more than $ 2 million, the state income tax rate will increase from 8,83% to 9,65%. Individuals with income over $ 5 million a year will be subject to state income tax at a rate of 10,3%; and persons whose income exceeds $ 25 million a year - at a rate of 10,9%.

This tax increase will be in effect until 2027, then it can be extended. This innovation makes the total tax burden on New York City residents the highest in the country. The total tax burden refers to the total rate of income tax paid to the federal, state and city budgets.

Corporate franchise tax for businesses that make more than $ 5 million in revenue per year will also rise from 6,5% to 7,25%.

Games of chance

The state has legalized sports betting through apps. The State Gaming Commission will issue licenses to two companies capable of creating at least four mobile betting platforms for residents of the region.

Applications must be sent by July 1, 2021, responses to them will be given within 30 days, and contracts will be concluded within five months after that.

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Priority will be given to the state's Indian tribes, and obtaining a license will require an upfront payment of $ 25 million to the state. That said, the terms of the distribution of revenues between the provider and the state have not yet been determined, but will likely include a split of 50 by 50 or 55 by 45 percent.

Officials hope the apps will launch in the fall, in time for the NFL season, and the state's revenue from legalizing such rates for the 2021-2022 fiscal year is projected at $ 99 million.

This figure is expected to rise to $ 350 million in the next fiscal year and reach $ 500 million in the 2025-2026 fiscal year.

"Fund for excluded workers"

One of the most controversial budget clauses that has caused a split in the Democratic Party is the plan to pay unemployment benefits to illegal immigrants - up to $ 15 each. Legislators motivated this by the fact that illegal immigrants were not eligible for federal unemployment benefits or financial assistance, although they also faced difficulties due to the pandemic.

Payments were calculated at a maximum of about $ 300 per week and should cover the loss of wages by illegal immigrants between March 27, 2020 and April 1, 2021 due to the pandemic.

Eligibility for these benefits will be limited to those whose income was less than $ 12 in the 26 months prior to the coming into effect of the budget bill, as long as these people can prove they can work.

The amount of benefits will be determined on the basis of a point system tied to the ability of the illegal to provide official documents confirming his residence in New York and proof of previous employment.

Those who do not qualify for the maximum payout of $ 15 can still qualify for a lower payout of $ 600 (fewer supporting documents and data are required to receive it).

Help for tenants and homeowners

The budget provides $ 3 billion to provide New Yorkers with a roof over their heads.

The $ 2,3 billion Emergency Rent Assistance Program will provide tenants with money to cover up to 12 months of late rent and utility bills, and three months in advance can be requested.

To participate in this program, the applicant (individual or family) must have a combined income of less than 80% of the average income in their area of ​​residence. But priority goes to those with incomes below 50% of average earnings and those who have been unemployed for at least 90 days.

Anyone who does not meet these requirements will be able to apply for financial assistance from the “aid to the needy fund”.

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In addition, $ 575 million of federal funds provided to the state will be allocated to help homeowners avoid having their property confiscated due to mortgage delinquencies.

An additional $ 100 million will be allocated to local governments to provide housing for the homeless or to help people unable to pay their rent to avoid eviction.

Helping business and art

Small businesses will receive a total of $ 1 billion in aid, including grants to cover the cost of wages, rent, or mortgage payments. The money can also go towards insurance, utilities, personal protective equipment, and heating, cooling and ventilation upgrades necessary to adhere to safety protocols during the COVID-19 pandemic.

In addition, small businesses will be eligible for tax breaks totaling $ 200 million, with an additional $ 35 million allocated to restaurants that have lost their businesses due to increased restrictions due to COVID-19 in the areas where they located.

Nonprofit art institutions will receive $ 40 million to help them upgrade spaces to meet new safety requirements.

From the budget will be allocated $ 43,1 million and the operating budget of the Council of the Arts of the State of New York and $ 1 million "grants for the stabilization of the arts."

Music and theater organizations will be eligible for $ 100 million in tax credits.

Another $ 20 million will be allocated for construction work to improve various objects of art and culture.

Recreational Marijuana

The law that Cuomo signed as part of the budget approval process already allows anyone over the age of 21 to carry up to three ounces of marijuana and smoke weed anywhere in New Yorkwhere smoking of tobacco products is allowed.

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The new Cannabis Regulatory Authority is slated to begin licensing marijuana growers, distributors and retailers shortly, but sales of cannabis in the state will not begin until a year from now.

Officials predict that the legal marijuana growing industry could create 30 to 000 jobs and generate $ 60 million in new state revenues a year.