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NY governor is raising money from billionaires on promises not to raise their taxes and instead slash state funding for poor cities

New York Governor Andrew Cuomo speaks in front of a private jet at the Rochester airport (via Flickr)

On August 25, New York Governor Andrew Cuomo attended a fundraiser at the family compound of the billionaire Sands brothers, whose liquor and cannabis firm Constellation Brands is headquartered in the Rochester suburb of Victor. The Sands brothers have a combined net worth of $3.8 billion and are major Cuomo supporters – the two brothers, their spouses, and their businesses have donated more than $379,000 to Cuomo’s campaigns since 2009. Robert Sands has received appointments from Cuomo to a number of public policy positions, including the state’s pandemic re-opening task force.

Cuomo’s most recent feting by the billionaire brothers comes as the Governor stridently opposes implementing new taxes on the state’s ultra-wealthy, opting instead for draconian cuts to state spending in the absence of federal aid. Cuomo’s cuts include a 20% slashing of aid to cities, which is the largest source of revenue for several upstate cities, including the Sands’ hometown of Rochester. Recently, the New York Times identified Rochester as facing the most severe threat in the country from revenue shortfalls driven by the coronavirus pandemic. The number two and three spots in the Times’s reporting are occupied by Buffalo and Syracuse, which are also targets for Cuomo’s austerity cuts.

By raising political money from billionaire Finger Lakes donors while slashing critical funding for poor cities in Western and Central New York, Cuomo is once again signaling that his administration prioritizes billionaire wealth over public goods that serve working people.

Cuomo’s austerity threatens upstate cities

Faced with a $14 billion budget deficit due to the coronavirus pandemic, which shuttered nearly every business in the state for weeks this spring, Cuomo has elected to slash state spending – reducing operations and withholding funding from cities – rather than acceding to calls to raise more revenue by taxing New York’s ultra-rich.

Cuomo’s austerity plan could be devastating to de-industrialized upstate cities, which are dependent on state aid to function. Buffalo, the second largest city in the state, is counting on state aid to make up 62.4% of the revenues to fund its 2020-21 budget. Syracuse’s proposed 2020-21 budget relies on state aid for 55.3% of all revenues and Rochester’s proposed budget is counting on state aid for 51.6% of its revenues.

The majority of these funds go to city school districts, but a significant portion funds cities’ general funds, which are used to pay for other essential municipal functions, such as maintaining roads and bridges, paying firefighters and other emergency first responders, and providing community services.  

Cuomo has already begun withholding money from cities in New York, a move that he says is only temporary until the federal government passes an aid package for US states and cities. However, Congress shows little evidence that such a deal is forthcoming. So far, Cuomo has withheld $1.7 billion in aid payments to local governments and non-profit service providers, including $324 million in funding for schools and $77.5 million in aid and incentives to municipalities.

Although a federal aid package for states and cities does not appear to be coming, Cuomo has steadfastly refused to consider closing the budget gap by raising taxes on the rich, even though he is aware of the devastating impact his cuts will have.

Cuomo’s budget spokesman Freeman Klopott told the Buffalo News: “If the federal government does not act, then the withholdings will become permanent cuts, which will be devastating to schools, hospitals, police and fire departments, along with other critical services.” Thomas DiNapoli, the New York State Comptroller, told the News “There is no clear Plan B if we don’t get that additional help from Washington.”

A package of 14 bills aimed at taxing the ultra-wealthy could generate $35 billion per year in new revenues, enough to cover the state’s deficit due to the coronavirus pandemic and to fund additional investment in critical social infrastructure in the state. The bills include a billionaire’s wealth tax, higher income tax brackets for people who earn more than $5 million per year, and restoring taxes on yachts and private jets that Cuomo eliminated in his first term.

Opinion polling shows that New Yorkers would prefer raising money from the ultra-wealthy to cutting services. In a poll of likely New York voters released on September 1, 90% supported raising income taxes on earners who make more than $5 million per year, 88% supported raising taxes on income over $1 million, and 81% supported raising taxes on income over $500,000 per year. On the other hand, 72% of voters said they opposed cutting funding for roads, bridges, and transportation, 81% opposed cutting funding for K-12 public schools, and 86% opposed cutting funding for the elderly and disabled.

To make sense of Cuomo’s rejection of these broadly popular proposals to tax the ultra-rich to fund public goods, we can look to how important billionaires and other wealthy donors have been to his political career.

In a December 2019 report, we found that 49 billionaires worth a combined $280 billion had given more than $4 million in individual contributions – i.e. donations of their own money and not counting corporate donations or political action committee spending – to Cuomo’s political campaigns since 2002.

In one statement opposing raising taxes on the rich, Cuomo described how important the tax convenience of billionaires is to him: “I literally talk to people all day long who are in their Hamptons house who also lived here, or in their Hudson Valley house or in their Connecticut weekend house, and I say, ‘You gotta come back, when are you coming back?'”

Now, as upstate cities like Buffalo, Syracuse, and Rochester are getting squeezed even tighter, the governor is raising revenue for his own personal benefit from billionaires like Rochester’s Sands brothers.

Billionaire Sands brothers are long-time Cuomo backers

Cuomo’s mid-term fundraising junket to the Sands family compound on Canandaigua Lake was first reported by the Rochester Democrat and Chronicle. As the Democrat and Chronicle noted, Richard and Robert Sands have been longtime donors to Cuomo and, according to the paper, Cuomo has attended at least four fundraisers hosted by the family in the past decade.

Both Richard Sands, the board chair of Constellation Brands, and Robert Sands, the president & CEO of the company, are billionaires. As of September 1, 2020, Richard and Robert Sands each has a net worth of $1.9 billion, according to Forbes.

The Sands brothers, their wives, and their companies have contributed at least $379,101 to Cuomo’s campaigns since 2010. This number includes cash donations as well as in-kind contributions of food and drink for fundraisers and travel expenses.

Robert Sands was an initial member of Finger Lakes Regional Economic Development Council created by Cuomo in his first term. More recently, Cuomo appointed Robert Sands to the New York Forward Re-Opening Advisory Board, tasked with guiding the state’s strategy to re-open during the coronavirus pandemic. Robert Sands is also the chairman of the Greater Rochester Chamber of Commerce, a corporate lobbying group based in Rochester aligned with Cuomo. At the end of Cuomo’s first gubernatorial term, his Lieutenant Governor, former Rochester mayor Robert Duffy, drew criticism for interviewing for the chief executive position at the Greater Rochester Chamber while still in office. After officially withdrawing his name from consideration, Duffy took the job shortly after his tenure as a public official ended.

As we reported in 2019, the Sands brothers are positioning themselves to profit significantly from the legalization of recreational cannabis in New York State, which Cuomo has signalled he supports. Between 2017 and May 2020, Constellation Brands has acquired a 38.6% stake in Canopy Growth, a Canadian cannabis producer, which could grow to a 55% stake if Constellation exercises all of its warrants.

The Sands brothers’ fortunes have so far weathered the coronavirus pandemic relatively unscathed. As mentioned above, the brothers have a combined net worth of $3.8 billion. Poorer New Yorkers – in the Sands’ brothers home city of Rochester and around the state – have not been as lucky. While the state’s billionaire class has seen its total wealth increase during the pandemic, more than two million New Yorkers have lost their jobs. Working class people and people of color are far more likely to contract the coronavirus, be hospitalized, and die.

Governor Cuomo appears to have deemed this trade-off acceptable as he prescribes ever more austerity for working class people already battered by the coronavirus pandemic in order to protect the profits of his wealthy donor base.