Last Tuesday afternoon, our Conference released its “revenue forecast” for New York State. A revenue forecast is a lot like a weather forecast: it provides a snapshot of conditions today, analyzes developing patterns and makes a projection as to what could happen in the near future. Just like a weather forecast, financial forecasts are not guarantees; they are educated predictions as to what might occur if current trends continue.
REVENUE FORECAST HELPS ASSESS HEALTH OF NEW YORK’S ECONOMY
However, instead of measuring temperature and precipitation as a weather forecast does, a revenue forecast examines dollars and cents, tax collections and the overall condition of an economy, in this case, New York’s financial system. The data is collected, the numbers are crunched and the outcome provides a roadmap that helps Leaders like Governor Cuomo and me make informed decisions about taxes, spending and the economy.
Our Conference’s revenue forecast analyzed the condition of New York’s economy and closely examined present – and projected – collections of tax revenue by State government from taxpayers, job creators and other sources. The projection of All Fund tax revenue (“All Fund” revenue is exactly what it sounds like: ALL the revenue that state government brings in from taxes and the lottery) for New York is $134 million less than the Governor forecasted for the 2011-12 and 2012-13 fiscal years. We projected Total All Fund revenue at $64.5 billion for 2011-12 and $66.7 billion for 2012-13.
FORECAST: DROP-OFF IN BUSINESS TAX REVENUE
The forecast included higher projected revenues in Personal Income Taxes, as well as Sales and User Taxes, and lower projected revenue in the areas of Business Taxes, other taxes and the MTA Payroll Tax (this is a tax collected to fund the Metropolitan Transportation Authority, which oversees/operates transit downstate). On an All Fund basis, our projection anticipates $56.5 million less this year and $89.8 million less next year in State Business Tax revenue.
HOW WE GOT HERE – THE GREAT RECESSION
It is important to remember that a revenue forecast never occurs in a vacuum: it happens in the real world and must account for what is happening today. The revenue forecast was made on the heels of the worst economic downturn in our country since the Great Depression of the 1930s.
At the recession’s peak, there were close to 800,000 New Yorkers unemployed. When you account for the fact that many folks became so discouraged they simply stopped looking for work, New York’s true unemployment figure was likely closer to (or exceeded) one million. Think about that: roughly one in 19 New Yorkers was out of a job at some point over the past three years. That is a sobering statistic.
BETWEEN THE NUMBERS: WHAT THE BUSINESS TAX REVENUE DECLINE MEANS
Based on the available fiscal indicators, New York’s economic recovery appears fragile and incomplete. Private sector job creators have not bounced back as strongly as the Governor anticipates. I believe the decline in Business Tax Revenue illustrates the urgent need for Albany to enact pro-growth job creation policies that will strengthen New York’s economic recovery, especially for upstate.
MY PRO-GROWTH JOBS AGENDA
Albany needs to get off the dime and move forward with an aggressive, pro-growth private sector jobs agenda that strengthens our economic recovery. My pro-jobs agenda includes:
- Lowering the Corporate Franchise Tax for all businesses;
- Repealing the Corporate Franchise Tax and Personal Income Tax for manufacturers;
- Eliminating the State’s Temporary Basic Utility Assessment (18-A) imposed on utility companies that drives up costs for ratepayers;
- Reinvesting in New York’s manufacturing sector, especially in the areas of high-tech, nanotech and biotech;
- Rescinding the job-killing “Wage Theft Prevention Act’s” annual notice requirement that buries job creators in needless paperwork;
- Delivering unfunded mandate relief that includes freezing County Medicaid costs at the current level and banning all new unfunded mandates; and
- Promoting “Economic Gardening” to help expand “second stage businesses” that employ 5 to 99 persons.
Growing the private sector, promoting sensible statewide economic development and cutting job-killing rules, regulations and red tape that act as barriers to job creation are all necessary to ensure a full, balanced and sustained economic recovery that benefits all New Yorkers. With any luck, future forecasts will point to continued recovery, a healthier economy and more jobs.
As always, constituents wishing to discuss this topic, or any other state-related matter should contact my district office at (315) 781-2030, or e-mail me at email@example.com.