I’m as distressed as any New Yorker over the prospect of mid-year state cuts due to the $1.8 billion hole in our budget after the governor’s administrative actions. While I thought we might have enough in rainy day funds and improved revenue forecasts to get us through, the Bush recession continues, and it now appears we cannot even limp through until March 31st. I’m fighting hard to find options that would allow us to lessen cuts. I know any cuts to schools, health care, libraries, roads and bridges, and other critical public services are onerous and counterproductive, actually slowing our recovery.
While the 2009 budget cut $6 billion in recurring spending by Medicaid and Rockefeller Drug Law reform, that’s not enough to make up for the annual loss of $21 billion lost through, mostly high-end, tax cuts. In next year’s budget, we must do a partial, but permanent, reversal of the high-end tax cuts that were enacted from 1988 to 1996. The top 4 percent of New Yorkers, those making $250,000 per year and up, had their tax rates cut by more than half. Most other New Yorkers had perhaps a one percent drop, from say, 5 to 4 percent, but have more than paid for those cuts by property tax hikes resulting from the shift from state to local support for schools and other critical services. It’s worth noting that several studies and our state’s own experience indicate that wealthy people do not leave the state when we raise their taxes a few points.
New York now mirrors the country in suffering from the greatest income inequality since the 1920’s. The top 1 percent of Americans has more wealth than the bottom 90 percent and more income than the bottom 40 percent. That degree of inequality is a grave threat to a democracy, as a strong democracy depends upon a strong middle-class.
More and more middle-class Americans and New Yorkers have joined the ranks of the working poor – people who are working full-time, but only making poverty wages. I think that the wealthy elite of this country and state, who led the drive for deregulation and benefited obscenely from those policies, now should pay more taxes to help clean up the mess they’ve made.
It’s wrong for Goldman Sachs to hand out tens of thousands of bonuses of $700,000 each, money they wouldn’t have without billions of our federal tax dollars, while Americans are being foreclosed on their homes at the rate of one every 7.5 seconds. As the new Congress works to figure out how to regulate Wall Street, we must at least tax them, so that we have the resources to fund our children’s schools, keep our libraries open and staffed, fix our roads and bridges, and assist those victimized by their Ponzi schemes.
Unless we enact serious income tax reform, next year we’ll be facing yet more cuts to schools, hospitals, nursing homes and other critical services, as the “jobless recovery” we’re in will only mean a small increase in state revenues.
Member of Assembly