Obviously, the fairness of the SALT deduction is a lot more complicated than "having other states pay for it".
Other states have been playing by the same rules, and would have been allowed to do the same thing. They merely chose not too. Indeed, you Federalists should have loved the old system. The SALT deduction took money away from the big bad centralized federal government and gave it to the states to spend as they saw fit. Isn't that the core of the conservative view of Federalism? The SALT deduction incentivized states to provide infrastructure and services, with less federal government involvement. For probably this and a bunch of other reasons, NY and CA were able to invest in infrastructure and services that created an environment where much more wealth is created than, say, in Oklahoma or Alabama. As a result, it turns out that NY and other high tax states provide more revenue to the government than they take out.
How will it go without than incentive? Who knows? Cuomo's only real beef is that all states made decisions about how to tax and spend based on one set of rules, and now, almost without any warning, the rules have changed.