Assemblymember Sarahana Shrestha wears her politics on her sleeve. Identified with the progressive wing of the Democratic Party, Shrestha is co-chair of the Ecosocialism Working Group for the Democratic Socialists of America (DSA) for the mid-Hudson Valley.
Shrestha calls governor Kathy Hochul’s proposed spending plan for 2023-24 “an austerity budget.” Her main priority, she says, is to tax the rich- wealthy corporations in particular, to produce substantially more state revenues.
“Make them pay the share that is owed to us,” she says. “Who generates all this wealth? CEOs are not sitting there working away to generate this wealth. It’s the workers. We’re squeezing working-class people to pay for everything. And despite squeezing the working class, everything is still under-invested.”
Chosen last November to advocate for the interests of most of Ulster County and portions of northern Dutchess County in the 103rd Assembly District, the assemblymember has found the Albany pace brisk since her swearing-in on January 1.
“In January you get to know the landscape, so to speak. The processes, the culture, the people and the staff,” says rookie Shrestha. “Right away, we start voting on chapter amendments, which are bills that passed last year, and now have to be voted on again as chapter amendments because they were negotiated with the governor.”
And then comes the governor’s proposed budget, which demands a legislative response. The majority conferences huddle behind closed doors to begin a conversation and solicit the input of legislators.
“Anything that’s in the budget you raise your hand and speak on it,” explains Shrestha, “and you make your case for literally anything. There’s no obstacle for what you can debate.”
The collection of priorities put forth by the two houses of the legislature sets the ambit of the negotiations between the two branches of government.
Which legislative projects get included or which of the governor’s goals get excluded says a great deal about the objectives of Assembly speaker Carl Heastie and Senate majority leader Andrea Stewart Cousins, both Democrats, for the 2023-2024 legislative session.
To hold the ear of either Heastie or Stewart-Cousins, the 42 Democratic state senators and 102 Democratic asssemblymembers must jostle and vie with one another in their party conferences to get their policies into the proposed legislative budgets to be negotiated with governor Hochul. Twenty-one senators and 48 assemblypersons are Republicans who meet in their own conferences, but goals advanced by the minority party get nowhere without the permission of the Democrats.
“The overall expectation is that the governor presents her version,” says Shrestha. “She sends it to the floor, and it is expected to be critiqued by the legislature. What the progressives are going to fight for is that the ceiling that we set is as close to our vision as possible. And then we expect during the negotiation and all of that, we’ll get somewhere in the middle.”
Raising the corporate tax
Shrestha points to Hochul’s solutions for raising the necessary revenues to underwrite services across the state as emblematic of the insufficiency of the governor’s vision: taxes on cigarettes, taxes on casinos and gambling, a tax on payroll mobility. The governor has also proposed modest tuition hikes for the city and state universities.
“When it comes to my budget priorities, I’m working on corporate tax,” says Shrestha. “This is a good time to revisit it because our top tax rate applied to those corporations making over five million dollars in profits, Seven and a quarter percent is going to sunset. If we do nothing, it will just go back to 6.5 percent.”
Even at 7.25 percent, New York comes in behind 18 other states and the District of Columbia. Behind personal income tax and sales taxes, New York’s corporate tax is the state’s third largest source of tax revenue.
New Jersey’s top tax rate on corporations is 11.5 percent. Pennsylvania’s is 9.99 percent. Other states with higher corporate rates than New York’s are Connecticut, Massachusetts, Vermont, New Hampshire, Maine, Maryland, Delaware, Illinois, Wisconsin, Nebraska, Minnesota, Louisiana, Iowa, Oregon, California and Alaska.
“We have proposed a different set of brackets,” says Shrestha, “that starts at $2.5 million and goes up to the very large corporations.” That additional revenue is essential, according to the Esopus resident.
“The reason this revenue is central to our budget fight,” says Shrestha, “is the projection of how much revenue we will raise affects how much we can spend. If we don’t pass our corporate-tax proposal, what we can spend is very low.”
Reported corporate profits of less than $2.5 million would be taxed under Shresha’s proposal at 6.5 percent. Above $2.5 million to below $10 million, the rate rises to 8 percent. From $10 to $20 million, the rate would be 12 percent. For corporations making over $20 million and above annually, the top corporate tax rate would be set at 14 percent, sufficient to raise an estimated additional $3.4 billion in annual revenue to the state. It would also distinguish New York as having the highest top corporate tax rate in the nation.
“The one thing that really needs to be clarified,” says Shrestha, “is that it’s not only for corporations who are based here in the state. It’s for all corporations who are making any money from sales in New York. And it’s only tax on their profits. So if a corporation is struggling they’re not affected.”
If the corporate tax affects all businesses equally, in-state or out, New York-based corporations won’t be threatening to leave the state — unless they choose not to do business in the third largest market in the United States.
“Which corporation is not going to want to succeed?” argues Shrestha. “If Tesla does not want to pay these taxes, for example, they would have to say, we don’t want to sell cars in New York. Amazon would have to say, we don’t want to sell products on Amazon in New York. No corporation is going to compromise their profit just to save a fraction.”
According to Shrestha, polls show that New Yorker’s regardless of party share the enthusiasm for taxing corporate profits. Governor Hochul’s budget proposal would raise $810 million compared to Shrestha’s target of $9 billion.
“We are always being asked how we plan to pay for the things we need,” says Shrestha, “And this is how. By raising revenues from those who are hoarding money and have outsized influence on our democracy. The projection of how much revenue we will raise affects how much we can spend. If we don’t pass our corporate-tax proposal, the amount we can spend is very low.”
It’s unlikely that during the upcoming negotiations with the legislature that the governor will embrace Shrestha’s corporate-tax plan if she doesn’t have to. As it stands now, a 9.25 percent corporate tax rate on all profits over five million is the compromise favored by the Assembly, which has declined to adopt the additional tax brackets proposed by Shrestha.
Helping with housing
Housing for Ulster County residents figures prominently on Shrestha’s agenda. She is pushing for a number of revenue actions.
One is the creation of a $250-million state fund with which to bankroll tenants who wish to purchase the properties in which they reside. “There have been some success stories in the city,” says Shrestha, “where tenants were able to buy a building. But we can’t wait on these rare success stories. We have to facilitate it.”
Another priority for Shrestha is a $250-million program for housing access vouchers. “This is a big issue in places like Kingston,” says Shrestha, “which is running out of places to put people who need an emergency shelter, and there is a lot of public money spent on motels that we put people in. But we want to do this voucher program because we want to help transition people who are in temporary emergency-shelter situations into stable housing.”
And then there’s good-cause eviction. Even though good cause does not have a spending implication, it has been pushed during the budget process regardless. “On the policy side, good-cause eviction is a high, top-three priority,” the local assemblymember maintains. “We’ve always sort of known that in the localities having the jurisdiction to pass and enact good-cause eviction would be challenged. That’s been our expectation. So the people who are trying to pass it at the state level are pretty committed.”
Co-sponsored by 58 Assembly members, Shrestha among them, a bill to enshrine prohibiting eviction without good cause as state law currently waits in the judiciary committee. With good-cause eviction laws falling in Newburgh, Poughkeepsie and Albany. housing activists await action from the legislature.
“There’s no reason not to try it,” says Shrestha. “The governor can just say a hard no, but this is one of those bills that, because it’s not attached to spending, we can still try to pass it as just separate legislation during the remainder of the session until June.”
Final budget due April 1
There’s lots of ways to play the game in Albany.
“A lot of people are already thinking about re-election,” says Shrestha. “Folks are already raising money, having fundraisers. When the election ends, the fundraising doesn’t end. Your expenses are ongoing. But I’m not thinking about re-election. I can’t think about the two-year clock thing. I’m thinking about these three months, because the final budget has to pass by April 1. The main clock ticking is the budget.”
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