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Brian Lehrer: Bryan Lehrer on WNYC. How do you put a budget together when you don't know how much money you're going to have? That's one problem facing Albany this year as lawmakers look to see how much money the Biden administration will give New York before the April 1st, New York state budget deadline. The precariousness of the situation has led Governor Cuomo to create two different budgets, one in which the federal government fills in the whole budget gap of $15 billion, and another in which they come up short.

In the latter case, which Cuomo is calling a doomsday scenario, the state would cut about $2 billion from funding for schools $600 million from Medicaid and there would be other cuts across the board. Maybe the state should just invest in GameStop. Kidding, but we'll talk about that Wall Street insanity that's being called the French Revolution of finance, later in the show. In a way, it's relevant to my guest right now because of something that she's proposing.

It's state senator, Julia Salazar, and she and other progressive lawmakers and advocates are criticizing the governor for among other things, relying on the federal government to balance the budget when they say the problem could be solved by a few simple progressive tax reforms that include increasing taxes on billionaires, a tax on inherited wealth, a capital gains tax and a tax on Wall Street trades. GameStop, gamers, this could mean you, and one on corporations. Senator Salazar, good to have you again, welcome back to WNYC.

Senator Julia Salazar: Thank you, Brian. Happy to be here.

Brian Lehrer: You are the lead sponsor, I see, on that particular bill, the financial transactions tax, which would put a small tax on all Wall Street transactions. Could you explain how that would work?

Senator Julia Salazar: Yes. I am the lead sponsor of the financial transaction tax, which is part of the invest in our New York Act, which is six different bills that would collectively raise a projected $50 billion in new revenue for New York State but my bill is a financial transaction tax. It's similar to what has been referred to as a stock transfer tax in the past. Currently, New York State does not have a financial transaction tax or a stock transfer tax, at least one that actually generates any revenue at all for the state.

What this would do is apply a small percentage tax, only one half of 1%, in the case of stocks, 1/10th of 1% in the case of bonds, and 1/5,000th of 1% in the case of derivatives on trading in the stock market.

Brian Lehrer: Opponents of that legislation center their argument on the threat of capital flight, and that in the digital age, it would be even easier than before for transactions to simply be moved out of state and avoid the tax altogether and diminish the state's budget net. What say you?

Senator Julia Salazar: I think it's highly unlikely that we will see capital flight as the result of this tax. We've seen similar tax increases in other jurisdictions where they have seen virtually no tax flight as a result of the tax. We also believe that anyone moving their financial transactions elsewhere, it would be outweighed by the resources that the state would have in order to cover our needs. We know that the wealthy are not going to want to continue to do business in New York and stay in New York.

We are all forced to continue living under austerity policies and really, the purpose of this legislation is to increase resources to the many needs that our state has right now and make the state more livable for everyone, including the wealthy, as well as vulnerable New Yorkers and working-class families.

Brian Lehrer: What's the version of a wealth tax and some people might remember that when Elizabeth Warren was running for president, that was one of her central progressive taxation planks, not to tax income more necessarily, but to tax wealth. Hers started at $50 million dollars of wealth. The Senate has a version of a wealth tax at the state level?

Senator Julia Salazar: I wouldn't call it a wealth tax per se. There is a proposed marked market tax, also known as a billionaire's tax, which would be a tax on unrealized capital gains. Additionally, there is a personal income tax proposal that differs vastly from the personal income tax proposal that the governor proposed. In terms of a wealth tax, we are limited in what we can do at the state level, compared to what could be proposed at the federal level. Regardless, it is definitely urgent that we use the mechanisms that are at our disposal at the state level to raise new revenue from the ultra-wealthy.

Brian Lehrer: I did hear that Governor Cuomo has indicated that he would consider implementing a temporary millionaire's tax for the COVID financial crisis, something that he's resisted in the past. Did I just hear you say that the Senate has a different version of that than the governor is interested in? We can get that wonky, can you explain the difference?

Senator Julia Salazar: Absolutely. Just to clarify, the Senate doesn't have a uniform position right now on a personal income tax proposal. The legislation that I'm referring to is part of the investment in our New York Act and has been introduced in the Senate. The governor's proposal is in his draft executive budget and his executive budget proposal is either to rely on a one time $15 billion bailout from Washington or a small tax increase, much smaller than what we would be proposing on a handful of billionaires coupled with billions of dollars in budget cuts for our hospitals and schools, as you mentioned.

Additionally, the governor's proposal would fully rebate back that small personal income tax increase. Ultimately, over time, we really wouldn't see any net increase in revenue to the state if the governor's plan is the only personal income tax that is implemented. What we want to see instead is a progressive personal income tax that begins at around $320,000 as annual income as a floor for seeing the top tax rates increase, and those top tax rates would gradually increase as you get into millions of dollars per year in personal income or billions of dollars per year, as New York has more billionaires in our state than any other state in the nation.

Brian Lehrer: Listeners, we can take some phone calls for Democratic New York State Senator Julia Salazar from the city. She talks with her colleagues and the new supermajority, meaning Democrats have a supermajority in the State Senate, which means a big enough majority to at least if they hang together, override a veto that Governor Cuomo might issue on maybe a different version of a millionaire's tax than he wants as we were just hearing explained.

Listeners, if you agree, that rich New Yorkers, the wealthiest New Yorkers should be taxed more, how would you like to see them taxed more? That's one of the things we're talking about with Senator Salazar. Which form of an increased taxation on the wealthiest New Yorkers would be the best. Of course, some people will say all of the above, but let's talk about the various options, 646-435-7280, or it doesn't have to be about that. There's a lot else going on in this new supermajority state senate. We'll get to some of those things as we go. 646-435-7280. Call your senator, if you're in senator Salazar's district, or even if you're not. 646-435-7280.

Two new sources of revenue that as you know the governor is hoping to get would come from legalizing certain forms of gambling in the state and legalizing recreational marijuana sales in the state. Let me ask you about the gambling, online gambling. He's now advocating for a proposal to allow the state to oversee the introduction of mobile sports betting which he projected would raise $500 million a year for the state.

I noticed that mayoral candidate, Andrew Yang has proposed putting a casino on Governors Island and people who attend casinos in person or bet online are not typically people with vast amounts of expendable income. Skeptics say, what kind of message does it send New Yorkers that the governor is for taxing gambles made on sports, but not gambles made on Wall Street?

Senator Julia Salazar: I think that these are regressive taxes. I certainly don't want to see a casino on Governors Island. Mobile sports betting has been discussed for years in the legislature, and it's true it's not a progressive tax. I think it's a shame that the governor has largely been unwilling to look to the people who can afford the most to help in this time of unprecedented crisis for our state, the ultra-wealthy, and instead would be willing to pass the burden on to-- Continue to pass the burden on to working families, the consumers who are taking advantage of, would be taking advantage of mobile sports betting or recreational adult-use marijuana.

It's a shame because the ultra-wealthy can absolutely afford to pay more, and additionally, attacks on the ultra-wealthy would generate far more revenue than either of these consumer taxes would.

Brian Lehrer: Are you for legalizing the sports betting?

Senator Julia Salazar: I do support the legislation. I don't think that it should be the highest priority in raising revenue given that the projected revenue is relatively small and that it's really essentially a regressive tax.

Brian Lehrer: What about legalizing recreational cannabis sales? Is this going to be finally the year?

Senator Julia Salazar: I certainly hope so. I'm very hopeful that we'll finally see it. The proposal that was outlined in the governor's budget address does differ from the Marijuana Regulation Taxation Act, Senator Krueger's legislation, which I fully support. I would like to see us pass something that is as similar as possible to the MRTA that not only would raise hundreds of millions of dollars in revenue for the state but also would correct the wrongs and the harm that we've seen due to the criminalization of marijuana use in New York.

Brian Lehrer: Are you close to an agreement on franchises and other benefits for historically over police communities?

Senator Julia Salazar: I believe so. It's always best as Senator Krueger. That question is as the bills lead sponsor, but my understanding is that we're very close to being able to pass this legislation in a way that will work for people who want to engage in the industry and also for consumers and for people who have been impacted the most by criminalization. That should be the number one goal for us, is making sure that people who have been impacted the most have access to the industry, are able to participate in the industry, and then additionally have their records expunged as it's related to marijuana.

Brian Lehrer: All right. Let's go to some phone calls. By the way, I realize I didn't mention what district you represent, the Brooklyn neighborhoods parts of Bushwick, Cypress Hills, Greenspoint, Williamsburg, Bed-Stuy, Brownsville, East New York. There you go. Martha in Queens, you're on WNYC with a state Senator from Brooklyn, Julia Salazar. Hi, Martha?

Martha: Hi. I just wanted to know if having a supermajority, why don't you just go ahead, put it together, the tax and the transaction, send it to the governor and if he refuses to sign it, then you just override the veto?

Brian Lehrer: Is it that simple?

Senator Julia Salazar: That's a great question. I wish it were that simple. Technically that is a possibility now that we have a democratic supermajority in the Senate, which is wonderful. I think additionally, having the supermajority also just gives us a little bit more wiggle room for members of the conference who maybe aren't fully supportive of any given legislation. It allows us to have a little bit more space to secure enough votes to pass it.

I think that it's pretty difficult even with the supermajority to guarantee that we would be able to override the governor's veto and what's most important is making sure that we have the support of New Yorkers like you who want to see this legislation pass and who will tell the governor that we want them to sign the bill rather than having him veto the bill, and having to override the veto. I do think that the legislature should act regardless of the governor's position on this at this point because he's made his position clear, and I think that the support for taxing the wealthy in New York is very clear as well.

Brian Lehrer: All right. Here's a pushback call, I think, on taxing high incomes right now in a different way. Toby in Brooklyn, you're on WNYC with state Senator, Julia Salazar. Hi, Toby?

Toby: Hi, Brian. Thanks for taking my call. I am the son of immigrants. My parents immigrated here. I'm first generation. They didn't have very much. They sacrificed a lot to make sure that I had advantages that most people didn't have. They didn't get handouts. They waited in line like everybody else to get their citizenship. I worked very hard, that's what they taught me, put myself through school, and to get into the best school. I took out student loans to be able to get into Ivy League schools. I did all that so I have a better life, that way I can earn more, especially living in this city, which is prohibitively expensive.

Someone like myself, when I heard that they were raising the threshold for people to have a floor of $350,000. I worked very hard to be able to earn that amount and I earned just a little bit more than that. I have a family of two, two children. My wife makes less than I do. I have to pay taxes on her disparity on income because that's the marriage tax because of the difference.

I pay the highest tax rate federally. I pay the state tax and I pay the city tax. I'm paying over 43% on my income every year. I have student loans that I can't deduct interest on because I make more than what the threshold is. Because somebody like myself that works hard to earn more to be able to have this, and also because I want to be able to have a better life for my kids and to be taxed even higher than that, I wonder what message that sends, especially for somebody like myself, that really even at that high income, in some ways does struggle to still live in New York City, which I know sounds a little bit weird, but when you have a family, you're trying to afford certain things.

On that area and that income, you live like somebody else making $80,000 or less in another state. That's really how it is, and I don't think I'm that far off on it. My question is what does that mean for somebody like myself when that message sends across that the Senate wants to go ahead and increase taxes on people like myself.

Brian Lehrer: Toby, thank you. Senator.

Senator Julia Salazar: Thank you, Toby. The message that we're really trying to send is that the ultra-wealthy in New York and in particular, people who actually are much more than you do, millionaires and billionaires would be paying the highest top tax rates. We want to make sure that this is a truly progressive tax, and I do understand that even with an income that's in the hundreds of thousands of dollars, when you're living in New York City, when you have a family to take care of, your expenses are extraordinary, and working families who earn even less feel that the most.

I definitely sympathize with that, but the details too matter, and what we are talking about is a very, very small increase on only the top tax rate for people starting at incomes in the hundreds of thousands of dollars. The message is that we want to make sure people who earn more and are able to bear more of the tax burden that is currently falling on working families, that is what we are actually doing. It's really important to know that the impact for someone who earns $350,000 a year would actually still be very minimal if we were to move forward with the personal income tax proposal that we have in the invest in our New York act.

Brian Lehrer: Just to be clear, when we say millionaires tax, sometimes that's assumed to mean literally only increase taxes on people whose income is $1 million or more in a given year. I know president Biden promised when he was campaigning not to raise taxes on anybody making less than $400,000 a year, that was his threshold. That would include the caller. What is the actual threshold after which your state income taxes would go up under your proposal?

Senator Julia Salazar: It would be in the $300,000 to $400,000 range. I think we still need to come up with an exact number for which we would begin to see marginal increases in the top tax rates on their personal income tax. There's room for negotiation on this. What's really important is that we're not starting at such an incredibly high threshold is what has been proposed by Governor Cuomo. Where he's looking at more than $10 million per year in personal income as a floor to see any personal income tax top tax rates increased.

Really, we want to make sure that the people who can actually afford to pay this additional tax are the ones paying it. We definitely don't want to look to President Trump's previous tax proposals as a model for this or to the governor's proposals as a model.

Brian Lehrer: We have just a few minutes left with state Senator Julia Salazar from Brooklyn. Let's see if we can tick through a few items pretty briefly before we run out of time. The governor is expected to announce by tomorrow that indoor dining will be allowed to resume in New York City by the end of the week at 25% capacity. Is that something you support?

Senator Julia Salazar: I'm sorry, can you repeat the question, Brian?

Brian Lehrer: Indoor dining reopening in the city at 25% capacity, the governor expects, he'll probably announce that tomorrow. Do you support it?

Senator Julia Salazar: I'm reluctant to support it. However, I think that what we really need to be doing is making sure that people who work in the service industry and our restaurants are able to stay open. At the same time, I don't think that we're seeing the decrease in the number of cases that we need to see in order to justify reopening. I also think 25% capacity, it is possible to do it safely. I think our priorities are a little bit out of order when we haven't even yet provided the relief that restaurant workers and small restaurant owners really need to get through this. That should really be prioritized over just reopening, especially when there's still a risk of the virus spreading and cases increasing again.

Brian Lehrer: Yes. Making sure the relief is there and being centered as much as the reopening debate. One follow-up on that. Conservative say the people most in favor of more restrictions on restaurants and other businesses are professional class people who work from home, maybe people like our last caller, not working-class New Yorkers hit so hard by unemployment by the pandemic. Is that an argument that you buy as a progressive in any way on behalf of your working-class constituents?

Senator Julia Salazar: Yes. Working-class people really should not be bearing the brunt and they have been, both in terms of the public health impact and the economic impact of this crisis. We really need to make policy decisions that shift that burden off of working-class families and small businesses and instead are demanding that those who have seen actually an increase in profits during the pandemic, some who have even-- Corporations who have even profited from the pandemic. Those are the actors who should be paying more and also who we should look to in implementing these policies that would not only benefit them actually in the long-term but would benefit our entire state.

Brian Lehrer: Last thing. You are calling on Cuomo to fully staff the state parole board with 19 commissioners from diverse backgrounds, including people directly affected by the state's incarceration system. Can you remind people who have not had experience with that system why the parole board is important and why it's understaffed at the moment, to begin with?

Senator Julia Salazar: Yes. The parole board plays an enormous role, has the power to determine, of course, whether or not someone who is eligible for parole is released. We often see on parole board, people who have only one perspective of the criminal justice system, former corrections officers, for example, former police officers. We very rarely see people on the parole board who are going to be sympathetic to someone who has done a significant amount of time.

Many people spend decades in prison before they actually get to go in front of the parole board and that's the case in New York state. It is especially important right now that we make it easier for people to be eligible for parole and we prioritize people who are seniors. The elder parole board would do this as well as being The Fair and Timely Parole Act because we really need to minimize the number of people who are incarcerated right now as we see a higher percentage of COVID-19 cases on the inside than on the outside. It's not only the right thing to do from a criminal justice perspective, but also from a public health perspective that we make sure that as many people as possible are eligible for parole if they're serving time.

Brian Lehrer: That's really interesting about staffing the parole board with people who've had experience from that side, not just from the law enforcement side. In our last 30 seconds and also our phone connection is deteriorating. I have to keep it brief. Do you have governor Cuomo sympathy on this yet? Can you tell?

Senator Julia Salazar: It's a little bit [inaudible 00:27:36] where the governor stands on parole board appointments but I'm definitely here to work with him on it and work with docs on it so that we can actually see parole justice in the state of New York not only for the sake of public health during the pandemic but as addressing a long-term problem and a systemic problem in how parole functions in the state.

Brian Lehrer: New York State Senator, Julia Salazar of Brooklyn, we always appreciate when you come on with us. Thank you so much.

Senator Julia Salazar: Thank you, Brian.

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