Albany’s Continued Fiscal Irresponsibility Leaves New Yorkers Seeing Red – And Paying Higher Taxes
Legislative column from Assembly Minority Leader Brian M. Kolb (R,I,C-Canandaigua)
July 23, 2010
An alarming finding unveiled last week as part of New York’s “June Cash Report” was proof positive that the Empire State still faces enormous financial challenges fueled by decades of Albany’s fiscal irresponsibility. The continued insistence by certain politicians on spending money like there is no tomorrow and imposing new job-killing taxes has made a bad situation worse. “Tomorrow” is here and, if current trends continue, New Yorkers will be seeing red and paying higher taxes for quite some time. NY ENDS FIRST FISCAL QUARTER OF 2010 $87.1 MILLION IN THE RED The state’s June Cash Report stated that, for only the second time in modern history, New York ended its first fiscal quarter in the red by $87.1 million. The report demonstrated that, despite all the talk of “fiscal austerity”, the spendthrift culture of Albany remains largely unchanged. In fact, State government actually spent more than last year, as General Fund spending was 10.7 percent above what it was in 2009, mainly due to increased costs from the Medicaid program and delays in school aid payments. 114 DAYS LATER, STILL NO STATE BUDGET! All of this was reported against a backdrop of New York State still not having a finalized spending plan in place. As of this weekly column’s writing, the Senate Majority has been AWOL from Albany for four weeks and the 2010-11 State Budget is now 114 days past due. Every additional day that passes inches this year’s spending plan closer to record lateness and means New York continues to go without a financial roadmap. Can you imagine any business operating for months without a fiscal plan to guide its decisions? That business would swiftly be out of business, and rightly so. When you add to this mix our current multi-billion dollar budget deficit and some of the nation’s highest income, business and property taxes, you can see why so many businesses are looking elsewhere to locate or expand – and why millions of fed-up New Yorkers have simply packed up and left. NEW PROPOSED TAX HIKES WILL KILL JOBS, HURT FAMILIES Even though the 2010-11 State Budget has not been approved, the contours of that spending plan have become clear. Now might be a good time to hold onto your wallet. Tight. According to an analysis released by the independent, non-partisan Empire Center for New York State Policy, the budget is expected to include several new tax and fee hikes that will further erode our economic competitiveness and increase the “middle class squeeze.” My previous weekly column provided an overview of those tax and fee increases. Here are some specifics regarding those tax hikes that you and your family need to be aware of:
- The state sales tax on clothing purchases under $110 will be temporarily reinstated, which is expected to cost taxpayers $330 million;
- Tax credits earned by businesses that invest or create jobs in New York will be deferred, amounting to a $100 million tax hike on certain companies this year. The deferral of these tax breaks – including investment, research and development, and Brownfield development credits – mean those companies will pay more in taxes;
- The state cigarette tax will increase by $1.60, raising the total tax to $4.35 per pack, the highest in the nation. This $260 million tax hike was adopted by the Majorities in both houses and signed into law in mid-June; and
- “Private label” credit cards issued by retail stores and Internet hotel booking websites such as “Expedia” will have new taxes imposed on them that will cost an estimated $30 million.