It’s been a busy few days in Washington. While I’m thrilled about the repeal of Don’t Ask, Don’t Tell, and the extension of unemployment benefits, I remain extremely disappointed about the extension of the Bush-era tax cuts to the very wealthiest households. It will cause us to borrow billions, do little to stimulate the economy, and increase the deficit in order to put more money in the pockets of millionaires.

At the same time, cities and states across the country are reeling. Federal stimulus spending is about to expire, and no new help is on the horizon. In Arizona, 1 million low-income residents lost access to Medicaid services, and the state stopped paying for organ transplants. Washington State cut benefits to 41,000 physically and mentally incapacitated individuals, leaving them just $258 per month. Hawaii shortened the school year by 17 days. Newark laid off 13% of its police officers. And states are still facing staggering deficits—California $18 billion, Illinois $13 billion, Florida $5 billion—that threaten deeper cuts, and perhaps even bankruptcy.

Here in New York City, Mayor Bloomberg has proposed laying off over 4,000 public school teachers, closing 20 fire companies at night, closing dozens of child care centers, eliminating over 2,000 summer youth jobs and leaving more runaway homeless youth to sleep on the streets.

So it is time for cities and states to step up. That’s why the New York City Council’s Progressive Caucus, which I co-chair, has introduced a plan to place a temporary city/state income tax surcharge on the wealthiest New Yorkers—precisely the amount of the tax windfall they are getting from incoming Republican House Speaker John Boehner and Senate Republican Leader Mitch McConnell.

We are encouraging other legislators around the U.S. to do the same. We will repeal the surcharge the minute that Congress and the President end the Bush tax cuts for the wealthiest and restore some tax fairness to the federal tax system.

Our proposal would raise over $8 billion annually. For that amount, we can keep the child care center open. We can avoid laying off thousands of school teachers. We can keep the fire companies open at night. We can keep shelter beds in place for homeless teens who are sleeping on the street. We can keep our libraries open 6 days a week (the Mayor’s proposal would likely reduce some branches to just 2 or 3 days next year). And we could still reduce the City’s budget deficit.

What will it mean for the average family? The 97% of New Yorkers earning under $250,000 will still receive the full tax relief offered under all the plans. A married couple with two kids earning $50,000 will continue to receive about $2,000 in tax relief.

For the wealthiest New Yorkers? A married couple with no kids, earning $500,000, would no longer receive the $3,000 extra that the Bush plan gave them (they’ll still get over $7,000, much more than the average family).

Republicans say it’s a bad time to have anyone’s taxes go up. But look at it this way. The top 1% of households in New York have an average income of $2.3 million, and will receive an $80,000 tax windfall under the federal deal. They will likely save most of it, so it won’t help our struggling economy.

Meanwhile, in my community, the mayor is preparing to close a 30-year-old child care center that serves 50 low-income kids, many of whose parents work nearby in downtown Brooklyn. Without child care, it will be hard for their parents to keep their jobs. Which choice is better for the economy and the future of our city?

We will still have very hard choices to make. The City’s projected budget deficit for coming years is growing, so we’ll still need to come up with more cuts. That is no simple task when we have already cancelled police recruitment classes, raised school class size and eliminated thousands of back-to-work and summer youth jobs.

But we will face fewer disastrous consequences—rising crime, night-time fires or kids who miss out on early childhood education that is essential to healthy brain development. We will prevent massive layoffs and reduce the risk of a double-dip recession. And we’ll get a very modestly fairer tax system to boot.

National Democrats lost on tax policy. But common-sense progressives in cities and states across the country don’t have to.