Tuesday, January 22, 2008

Spitzer To NYers: Less Tax Relief, More Money Filling The Tank

Governor's Proposed Budget Cuts Aid To LI School Districts, And Ups The Price At The Pump

True enough, we have a $4.6 billion gap to close in New York, but if Eliot Spitzer, who delivered his 2008-09 Budget message to the NYS Legislature this afternoon, intends to do that on the taxpayers' backs, without slashing spending by any significant level, he'll not only remain widely unpopular, he'll drive even more of us off Long Island and out of New York.

A smaller STAR rebate (for whatever that is worth). Less State Aid to our local school districts. An increase in the gasoline tax (at a time when this tax should be cut).

The bottom line is that even modest increases in taxes, coupled with decreases in aid to school districts and still no real property tax relief, is too much, particularly when much of New York, including Long Island and economically devastated upstate, are attempting to stave off the effects of an apparent recession.

New Yorkers understand the need for belt-tightening, and making sacrifices. We've been doing both for years. Unfortunately, from what we see in the Governor's 2008-09 proposed budget, Mr. Spitzer doesn't understand that the fiscal restraint and give-backs have to start in Albany.

So far, there's not all that much to cheer about in the State capital. Let's hope that the Legislature, in its upcoming review and revision of the budget, can restore school aid, hold new taxes and fees at bay, and, at long last, actually do something to cut the property tax.

As for cutting spending -- in a legislative election year, no less -- well, just don't hold your breath!
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From The New York Times:

Spitzer Proposes New Taxes and Fees

ALBANY—Gov. Eliot Spitzer proposed an array of new taxes and fees, $1 billion in health care cuts and scaled back plans for new education aid and property tax relief in his second executive budget.

The governor’s budget, which was unveiled Tuesday, came on a day when the Federal Reserve dramatically cut interest rates to stave off increasingly gloomy economic conditions in the United States that sent global markets plummeting over the weekend.

“Like every other state in the nation, New York is feeling the effects of a serious economic downturn requiring us to make tough decisions necessary to continue moving our state in the right direction,” the governor wrote in a message included with his budget presentation.

With the state facing a projected $4.4 billion deficit in the upcoming fiscal year — which begins on April 1 — the governor proposed a spending increase of 5 percent, the lowest proposed spending increase in an executive budget in several years. That said, it was one that critics said was not sharp enough given the worsening economic conditions. Further, the governor called for an increase of nearly 1 percent in the state workforce, bringing the number of workers over 200,000.

And there will likely be pressure from the Legislature to increase spending further — as there always is — in a year when all 212 lawmakers are up for re-election and Republicans will be fighting to hold their slim majority in the Senate.

Of particular sensitivity will be $738 million in proposed new taxes and fees, though there is no broadly based income tax increase. Among the new measures were modest increases in everything from taxes on gasoline and malt liquor to increases in fees the state charges for home purchases above $175,000 and steps aimed at increases in taxes paid by out-of-state residents who work or do business in New York.

The administration said it was not raising taxes, but closing loopholes, though a number of their steps will likely be felt by consumers. Among them was a plan to reclassify Health Maintenance Organizations so they are taxed as insurers, a move that will cost H.M.O.’s more than $200 million a year and presumably be passed on to patients.

Republicans in the Senate particularly objected to proposed cutbacks in the School Tax Relief, or STAR, program, which sends money back to homeowners to modestly offset their property taxes. The state had committed to return $1.8 billion to property taxpayers this year; that will be scaled back to $1.25 billion.

“This budget once again is an assault on suburban families, in terms of education, in terms of property tax relief, in terms of health care and in terms of economic development and job creation,” said Tom Dunham, a spokesman for Senator Dean Skelos, a Long Island Republican and the deputy majority leader of the Senate. “He obviously didn’t learn his lesson last year.”

Over all, the $124.3 billion budget — including federal matching funds — increases spending by 5 percent. The governor is proposing $980 million in Medicaid and other health care cuts, in part by changing the way the state reimburses for care to emphasize preventative care and by making changes in the way it does bulk purchasing of pharmaceuticals.

The Spitzer administration is also seeking to reap $1.35 billion in savings by ordering agencies to pare 5 percent from their budgets, including by closing some facilities and taking steps to lower energy use.

The governor proposed a $1.46 billion increase in education aid, bringing total education spending to $21 billion. But his aid plan is scaled back from what he had outlined last year; New York City schools will likely see a $100 million reduction in expected operating aid under the plan, though an increase from last year. Aid set aside by Senate Republicans for Long Island will also be reduced in the plan, a move sure to spark a fight with the Legislature.

Edmund J. McMahon, director of the Empire Center for New York State Policy, a conservative group, said, “I don’t think 5 to 6 percent growth qualifies as an austere response — it doesn’t qualify as belt tightening; it’s more like throat clearing.

“Spending is still increasing at an unsustainable level. We’re dealing with it one year at a time and hoping for the best in the future.”

Assemblyman Michael N. Gianaris, a Queens Democrat, said: “Everyone recognizes this is a very difficult year budget wise.

“While there will definitely be interest groups kicking and screaming about their particular subject areas, the important thing to recognize is there are difficult choices to be made and the governor has struck a good balance.”

2008 The New York Times Company

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