ALBANY — Gov. Andrew Cuomo wants to separate the state’s tax rates from the federal rates to keep New Yorkers from a $1.5 billion income tax increase, the Democrat’s top budget official testified Thursday during a budget hearing.
Budget Director Robert Mujica told lawmakers during the joint Senate and Assembly hearing on taxes that Cuomo plans to detail the proposal in an amendment to the spending plan he released last month. He said the governor proposes to decouple the state tax code from the federal government’s, a move that would restore deductibility many New Yorkers stand to lose under the new federal tax overhaul.
“This issue was created in Washington, but we can fix it in New York,” Mujica said.
Under the new federal rules, the state stands to receive $1.5 billion in additional tax payments. Most of the new money would be paid by taxpayers who can no longer take advantage of former deductions.
Last month, the Republican-controlled Senate passed highly technical legislation that would tweak the state’s tax rules to separate it from the federal tax code. The Senate bill would restore many of the deductions New York taxpayers will lose at the state level under the new federal tax plan.
Major changes included in the recent tax overhaul in Washington will have a significant impact on the state’s own tax code, but the specifics are something Cuomo administration officials and the Legislature are still trying to figure out.
During the four-hour hearing lawmakers also questioned state officials about $1 billion in new taxes and fees included in Cuomo’s $168 billion budget proposal.
The new taxes include a $127 million levy on opioid manufacturers to pay for costs associated with the addiction crisis in many New York communities. Republican lawmakers voiced concern that consumers will bear eventually bear the costs of that plan if the companies raise prices on their painkillers.
Mujica said tax rates for corporations and individuals have gone down in New York. But Republican Sen. James Tedesco, of Schenectady County, said high tax rates keep driving people out of the New York, threatening to make it the “Empty State” instead of the Empire State.
BEIJING — China's stock market benchmark plunged 5.5 percent today and other Asian markets were off sharply after the Dow Jones industrials on Wall Street plummeted more than 1,000 points, deepening a week-long sell-off.
Asian markets followed Wall Street down after the Dow entered "correction" territory for the first time in two years.
The Shanghai Composite Index dipped 5.5 percent but recovered slightly to end morning trading down 4.1 percent at 3,127.91. Tokyo's Nikkei 225 was off 3.2 percent at 21,180.28 and Hong Kong's Hang Seng fell 4.2 percent to 29,142.87. Benchmarks in Australia, South Korea and Southeast Asia also retreated.
Financial analysts regard corrections as a normal market event but said the latest plunge might have been triggered by a combination of events that rattled investors. Those include worries about a potential rise in U.S. inflation or interest rates and whether budget disputes in Washington might lead to another government shutdown.
"Markets are down again today, maybe unnerved by fears that the U.S. Senate will not pass a budget bill in time to avoid a U.S. government shutdown," said Rob Carnell of ING in a report. "With financial markets vulnerable at the moment, this was not great timing for such political brinksmanship."
Chinese markets fell despite unexpected strongly trade data Thursday.
In Europe, markets were unnerved Thursday by the Bank of England's indication that it could raise its key interest rate in coming months because of stronger global economic growth. Germany's DAX lost 2.6 percent while France's CAC 40 ended down 2 percent. Britain's FTSE 100 fell 1.5 percent.
After hitting a high two weeks ago, U.S. stocks started to tumble last week after the Labor Department said workers' wages grew at a fast rate in January. Investors worried rising wages will hurt corporate profits and could signal an increase in inflation that could prompt the Federal Reserve to raise interest rates at a faster pace, putting a brake on the economy.
Since then, the Dow and the Standard & Poor's 500 have fallen 10 percent, Wall Street's traditional definition of a correction.
On Wall Street, many companies that rose the most over the past year have borne the brunt of the selling. Facebook and Boeing have both fallen sharply.
The Dow lost 1,032.89 points, or 4.1 percent, to 23,860.46. Boeing, Goldman Sachs and Home Depot took some of the worst losses.
The S&P 500, the benchmark for many index funds, shed 100.66 points, or 3.8 percent, to 2,581. Even after this week's losses, the S&P 500 index is up 12.5 percent over the past year. The Nasdaq composite fell 274.82 points, or 3.9 percent, to 6,777.16.
The market, in its second-longest bull run of all time, had not seen a correction for two years, an unusually long time. Many market watchers have predicted a pullback for some time, saying stock prices have become too expensive relative to company earnings.
"We may have seen the worst, but it's too early to say for sure. However, our view remains that it's just another correction," said Shane Oliver of AMP Capital in a report.
Corrections of up to 15 percent "are normal," said Oliver.
"In the absence of recession, a deep bear market is unlikely," he said.
Stocks are not falling because investors have doubts about the economy. Employers are hiring at a healthy pace, with unemployment at a 17-year low of 4.1 percent. The housing industry is solid. Manufacturing is rebounding. Households and businesses are spending freely. Personal debt has lightened since the financial crisis a decade ago. And major economies around the world are growing in tandem for the first time since the Great Recession.
Economies around the world are strengthening and corporate profits are on the rise. That combination usually carries stocks higher. But stock prices climbed faster than profits in recent years. Many investors justified that by pointing out that interest rates were low and few alternatives looked like better investments. Fast rising interest rates would make that argument much less persuasive.
In currency markets, the dollar edged up to 108.84 yen from Thursday's 108.73 yen. The euro held steady at $1.2248.
Benchmark U.S. crude lost 65 cents to $60.50 per barrel in electronic trading on the New York Mercantile Exchange. It fell 64 cents the previous session to $61.15.
Brent crude, used to price international oils, lost 58 cents to $64.23 in London. It retreated $70 cents on Thursday to $68.81.
ALBANY — An aide to a New York state senator faces felony assault charges after a grand jury indicted him for allegedly hitting a woman with a television cord.
The Times Union reported that Robert Nickol is scheduled to be arraigned Friday in connection with the September domestic violence incident.
Nickol is an aide to Sen. William Larkin, a Republican.
An Albany County grand jury indicted Nickol on Tuesday on charges of assault and strangulation.
Neither Larkin’s office nor Nickol’s attorney, James Knox, immediately returned calls seeking comment.
ALBANY — New York state officials say more funding is available for residents facing problems keeping their homes heated this winter.
Gov. Andrew Cuomo announced Wednesday that the additional funding will help eligible New Yorkers struggling to afford heating fuel or facing the likelihood of having their utility service shut off.
The Democrat said those people can apply for a second emergency benefit through the federal Home Energy Assistance Program starting on Monday. Families earning up to nearly $53,500 per year can qualify for assistance.
State officials said they’ve seen a 40-percent increase in requests for emergency heating assistance this winter when compared to last year. Households that have already received the benefit known as HEAP are eligible for applying for additional funding.
Applications are accepted at local social services agencies.
ACTON, Mass. — A Massachusetts couple says it was fun when they started receiving free mystery packages from Amazon they hadn’t ordered.
Now they want it to stop.
Mike and Kelly Gallivan, of Acton, tell The Boston Globe the first package arrived in October. They have continued to receive one or two a week with mostly cheap stuff like plastic fans and phone chargers.
The Gallivans say Amazon told them the merchandise was paid with a gift card with no sender’s name.
Two experts say the Gallivans are likely being used to manipulate Amazon buyer reviews. The anonymous sender is likely writing glowing reviews of their own product.
An Amazon spokeswoman said the Seattle-based company is investigating inquiries from consumers who have received unsolicited packages and will ban vendors who abuse the reviews system.
On Feb. 9:
1825 — The House of Representatives elected John Quincy Adams president after no candidate received a majority of electoral votes.
1870 — The U.S. Weather Bureau was established.
1964 — The Beatles made their first live American television appearance on “The Ed Sullivan Show,” broadcast from New York on CBS.
1971 — Magnitude 6.6 earthquake in California’s San Fernando Valley claimed 65 lives. The crew of Apollo 14 returned to Earth after man’s third landing on the moon.
2002 — Britain’s Princess Margaret, sister of Queen Elizabeth II, died in London at age 71.
Thought for Today: “What we call progress is the exchange of one nuisance for another nuisance.”
— Havelock Ellis, English psychologist (1859-1939).