Gov. Andrew M. Cuomo and the New York state Legislature announced last week that the state has finalized a $212 billion budget for FY 2022—almost two weeks after the deadline. The budget invests in almost every sector of the state. Notable provisions include $2.4 billion in relief for renters and homeowners, and $1 billion for small-business recovery. Additionally, there is significant investment in education, child care and infrastructure.
The $212-billion budget figure represents an estimated 10% increase from last year’s budget. Federal relief money and tax increases to wealthy residents in New York and businesses fund the increase in this year’s budget. As a result, two new, individual tax brackets will be created–one for residents who make between $5 million and $25 million, and the other for residents who make more than $25 million. Additionally, there will be an increase in the Corporate Franchise Tax Rate for businesses that make more than $5 million in income.
These tax increases will impact many insurance carriers. These increases could impact policyholders adversely, as carriers could attempt to pass the increase on to insureds.
Many insurance-related measures were left out of the final budget—including provisions that would have allowed the New York State Insurance Fund to cover policyholders’ out-of-state operations as long as policyholders’ main operations reside in New York state.