Cuomo, Murphy Call for More Covid Relief to Hardest-Hit States

(Bloomberg) -- Governors Andrew Cuomo of New York and Phil Murphy of New Jersey said Congress should apportion stimulus money in a way that gives more to states hardest-hit by the novel coronavirus.

“We say to the Congress now: be fair,” Cuomo said Friday during a virus briefing, where he was joined virtually by Murphy. “Fair is to distribute the Covid relief funds proportionate to the damage of Covid.”

The governors also reiterated their call to nix former Republican Donald Trump's 2017 law that placed a $10,000 cap on state and local tax deductions, or SALT, effectively raising taxes for those who exceeded the limit. New York, New Jersey, Connecticut and Maryland sued the Internal Revenue Service and then-Treasury Secretary Steven Mnuchin in 2018, saying the law was aimed at taking money from high-tax Democratic states and giving it to Republican states.

A federal judge in 2019 dismissed the suit, saying the plaintiffs had failed to uphold their argument that the limit was “an unconstitutional assault on states' sovereign choices.” Litigation is ongoing, according to Cuomo, who is organizing a national repeal effort.

New York, New Jersey and Connecticut were among the first states hit hard by the Covid-19 outbreak. Cuomo blamed the Trump administration for allowing more than 3 million people to travel from Europe to the U.S. via the New York-area airports after Covid-19 started to spread.

“Those flights landed in New York and New Jersey, and they populated the tri-state region,” Cuomo said. “That's why we had the explosion in the numbers early on.”

Cuomo says the SALT legislation amounts to double taxation, allowing the federal government to tax what a person has paid in state, local and property taxes. A repeal would involve majority support in the Democratic-led Congress and the signature of their party mate, President Joe Biden.

Critics against lifting the limit have called it a benefit mainly for the rich. Congress' nonpartisan Joint Committee on Taxation reported that households earning at least $1 million annually are the biggest beneficiaries.

New Jerseyans stood to pay $3.1 billion more in taxes annually as a result of the 2017 change, according to a study by the Institute on Taxation and Economic Policy, a non-profit, non-partisan research group based in Washington.

“It's high time this thing gets off the books,” Murphy said.

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