March 2004

Tax Increases

From the NYS Assembly • Sheldon Silver, Speaker
Herman D. Farrell Jr. • Chair, Assembly Ways and Means Committee

What the experts are saying...

"Fees and taxes are one and the same."

- Michael Long, Chairman, New York State Conservative Party

"[T]hese things represent a continuation of the syndrome of nickel-and-diming people to death."

- EJ McMahon, Senior Fellow, Manhattan Institute for Policy Research

"Four weeks of tax-half shopping does little to benefit the shopper and barely registers on the consumer’s radar screen. And it plays havoc with retailers, creating four weeks of shopping when activity would spike, and 48 weeks when shoppers would just stay away. This can’t be good for New York’s sales tax coffers."

- James R. Sherin, President and CEO, Retail Council of New York State

"Two weeks ago the governor reaffirmed his commitment not to raise taxes this year. [But] the Executive Budget includes a new $200 million ‘sick tax’ plus new or higher taxes on nursing home and home care. Clearly, there is an inconsistency. We hope we can count on the legislative leaders to again reject the tax-and-cut proposals from the governor."

- Daniel Sisto, President, Healthcare Association of New York State

"It concerns us because fees are taxes by another name. Everyone has been under the assumption that there would be no new taxes."

- Mark Alesse, Director of the New York office, National Federation of Independent Businesses

"They’re not helping to make this a state where people want to live. They are pushing people out."

- Marcy Horbach, New City resident

"People only have a certain amount of money to spend. Clothes are expensive enough as it is."

- Jasmin Garcia, White Plains store manager

No, governor, there’s nothing "petty" about $3.8 billion in new taxes

The governor and his administration just don’t get it.

Charles Gargano, the governor’s economic development chief, recently went on TV and dismissed the $3.8 billion in new taxes the governor proposed in his executive budget as "petty increases of fees here and there."

For the average working family in New York already dealing with high taxes, a $3.8 billion tax hike is a whole lot of petty – especially since the governor made yet another no-new-taxes pledge in the lead up to the release of his budget.

When do tax hikes stop being petty – and start hurting families?

The most egregious increase is a new $823 million sales tax on clothes – a tax which will fall hardest on working parents trying to outfit their kids for school. Last year, a temporary, one-year increase in the sales tax on clothing was adopted to help close a major budget gap. As things stand now, sales taxes on clothes under $110 are supposed to be repealed early this year. The governor wants to keep the state and local tax in place, offering just four weeks a year when the tax wouldn’t be collected.

During that same interview, Gargano actually said that only having four tax-free weeks a year is "better" than having 52 tax-free weeks. Perhaps Gargano, the former ambassador to Trinidad and Tobago, will indeed benefit from the occasional tax break on single clothing items that cost nearly $500, but the Assembly feels most working families prefer tax relief on less luxurious items year-round.

The administration is also considering a plan to start charging tolls on hundreds of miles of currently toll-free state highways and interstates – a new road tax – throughout the state. Apart from making it more expensive for people to commute to work, such a measure would also make it harder to attract jobs in the first place, since it would further raise the cost of doing business in the state.

Some of the governor’s other "petty" tax hikes include:

  • Drug Tax: A $60 million cut to the Elderly Pharmaceutical Insurance Coverage program – a tax on low-income people trying to buy life-saving prescription drugs that will drive local pharmacies out of the program.
  • Study Tax: A 5 percent cut in community college assistance – a tax on local property-taxpayers and those attending local colleges.
  • Safety Tax: A 3 percent tax on protective and detective services.
  • Fun Tax: A new 4 percent tax on tickets to sporting and other entertainment events.
  • Car Tax: A new tax on insurance registration.
  • Home Buyers Tax: An increase in the real property transfer recording fee.
  • Ticket Tax: A new parking ticket surcharge.
  • Trail Riders Tax: A new tax on motorcycle and ATV tires.

The list goes on and on. And when you factor in things like the governor’s new "sick tax" on hospitals, nursing homes and home health care agencies – a tax that will cost at least $429 million, leading to higher insurance rates and health care costs – and a 5 percent cut to college opportunity programs, the word "petty" seems to be a poor adjective to describe the heavy burden these tax hikes will place on New York’s families.

Out of touch, and pushing taxpayers to the brink

Gargano’s comments are typical of the governor’s out-of-touch administration. Last year, Lt. Governor Mary Donohue said that property taxes weren’t a concern of the state, despite the fact that across New York, homeowners and small businesses are being pushed to the financial brink by the governor’s failed policies.

This administration has made a habit out of trying to balance the state’s books by shifting as many costs as possible onto local governments. Last year, the governor tried to cut $1.4 billion from schools, which would have led to record property tax hikes statewide since districts would have had to make up the money somehow. Similarly, the governor’s refusal to have the state pay its fair share of Medicaid costs is sapping local budgets statewide.

What the governor and his administration seemingly fail to realize is that countless families are hit hard by each of these tax hikes – especially in a rough economy like New York’s. But what makes them even harder to digest is that the governor makes the same no-new-taxes pledge year after year, and year after year, he proposes new taxes.

The Assembly fought the governor’s tax hikes before – and we’ll fight them again

Last year, the governor proposed $6.7 billion in new taxes and fees – including the largest property tax hike in state history, as well as MTA toll and fare hikes. The Assembly recognized how destructive such taxes would have been, and so we reached across partisan lines and worked with the state Senate to pass a responsible budget that kept taxes in check.

This year, we’re going to fight for a budget that protects education, health care, and holds down the cost of living – because in the end, there’s nothing “petty” about not being able to afford to live in the state you call home.

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