In December, Governor David Paterson released his 2009-10 Executive Budget proposal with the promise to New Yorkers that during this economic downturn our state would craft a fiscally responsible budget that reins in excessive spending and that the process be done with greater government transparency. How quickly this promise evaporated into thin air. With the April 1 state budget deadline looming only three men, all from New York City, know what this year’s state fiscal blueprint will look like. However, based on rumors and speculation the rest of us can guess it will lack fiscal sanity.
Since the unveiling of the Governor’s budget plan, I have been a steadfast opponent of his 137 new taxes and fees. I have said all along that raising taxes on middle-class families and small businesses to the tune of almost $4 billion will be counterproductive and, therefore, should be removed from the final budget. Taxpayers achieved a minor victory when the Governor caved in to public pressure and removed eight of the most grievous tax and fee increases, including an additional sales tax on soft drinks, entertainment items like cable and satellite television/radio and digital downloads. Unfortunately, this year’s budget will still contain 129 new taxes and fees with a final taxpayer price tag of $2.9 billion.
New York is second only to New Jersey for the highest sales tax burden in the nation. This type of tax is regressive and will have a disproportionate effect on the increasing number of lower income residents. Still, it is reported that the New York City trio are considering increasing the state sales tax by 0.25 percent this year. The logic behind it is unclear since many residents will surely avoid paying this tax by purchasing goods and services in other countries, states or even on Native American Reservations. This is just another ill-advised plan that won’t help cure our economic ills.
Another instance of looking for a temporary fix that might be found in this year’s budget is the personal income tax increase on taxpayers earning more than $300,000 a year. Increasing the personal income tax burden on families is not a solution to our economic problems, because as the tax burden increases so does the number of people leaving our state in search of less expensive places to live and work. Finally, it is simple logic that higher taxes mean less money available to invest in New York State, which will only slow our economy further. Raising income taxes on anyone does not create economic development opportunities.
What’s missing from this year’s budget is something that Governor Paterson supports – a property tax cap. This year’s anticipated state budget will offer no property tax relief. In fact it will decrease the STAR program by $1.7 billion and eliminate the Middle-Class STAR Rebate Check program. During a time when homeowners are struggling to pay their bills, including mortgage and property taxes, the state can help the economy by putting more money in their pockets for them to spend on essential items like food, education and health care.
We cannot tax and spend our way out of an economic recession. Nor can we simply continue to borrow. Decreasing revenues and rising unemployment are a serious concern. During any economic crisis, families, businesses and government must learn to do more with less. We can do this, if we work together to advance bold, innovative ways to rein in wasteful government spending, consolidate government services and enact comprehensive property tax relief to lessen the burden placed on local taxpayers.
Together, we can turn this economy around and make New York State affordable again; but not if our state budget contains more spending, more taxes and more debt. It is time to say “stop” to these proposals.