Looking Forward: The 2010 Legislative Session

Guest View/Ithaca Journal; Barbara Lifton
January 7, 2011

New York and most states are experiencing great financial woes, due to the deep recession we are in, mostly caused by the financial sectorís greedy and irresponsible actions. We have been pulled back from the brink of a Depression through the enactment of billions in federal stimulus that, it is estimated, has saved upwards of 100,000 jobs and softened the blow of poverty for millions more in NYS. Most economists are calling for more stimulus, as the private sector is still stalled and failing to create the jobs needed by Americans and New Yorkers.

How does this larger, national picture affect our legislative session ahead? As I hear calls for cuts of billions in state spending, I am worried that too many people are calling for less government spending, rather than remembering FDR, who understood that government must act to protect people and revive the private sector through steady government support. That is the lesson of the recovery from the Depression and we forget it at our peril.

This session, we face a $7 billion shortfall. Since about 76% of the state budget goes to education and health care, itís impossible to make big cuts without devastating these sectors. We will continue to look for savings Ė last year we cut $6 billion in recurring spending due to Medicaid and Rockefeller Drug Law Reform. But after several rounds of cuts, there is no fat left in many cases. Cuts will mean loss of critical services and middle-class jobs. I fear we will make severe cuts in those areas, unless there is a massive public outcry.

What should we do? We should enact a partial reversal of the high-end tax cuts that were passed from 1988 to 1996, under which the top 4% of New Yorkers, those making $250,000 per year and up, had their tax rates cut by more than 50%. The wealthiest New Yorkers went from a 15% tax bracket to under 7%. Most other New Yorkers have more than paid for their 1% cut through property tax hikes that resulted from the shift from state to local support for schools and other critical services. We are now losing $21 billion every year to the state treasury due to those overly-optimistic high-end cuts, which did not revive the stateís economy and create good jobs as promised.

Most peopleís taxes are too high, but itís not their income taxes that are killing them. Our income taxes rank 25th out of the 50 states. Itís the local property tax thatís spiraled out of control.

The Assembly passed an Ethics Reform bill last year, and it is clear with new revelations of corruption and pay-to-play politics that urgent action is needed.

We also need campaign finance reform to stem the influence of big money. The Assembly Majority, has passed such a bill many times since 1979. New York must get this done. Some say we canít afford the $33 million price tag; I say we will save many times over that in more sensible, effective government.