Governor Paterson today released his list of proposed $2 billion cuts in this year's state budget ahead of the special session of the state legislature next Tuesday. Meanwhile a broad coalition of labor, human service, education and faith groups help news conferences in eight cities across the state. They plan a major rally in Albany on the 18th. A big fight is over Paterson's unwillingness to expend any part of the state's $1 billion plus rainy day fund to resolve this year's $2 billion deficit. The Working Families Party renewed their call for the Millionaires Tax.
OVER 200 NON PROFITS, SERVICE PROVIDERS, UNIONS AND FAITH-BASED GROUPS TO GOVERNOR PATERSON: CUTS ALONE WILL DEVASTATE NEW YORK’S FUTURE
Groups Providing Critical State Services Call on Paterson to Stop Exempting Wealthy New Yorkers from Budget Pain and to Use the Tax Stabilization Reserve Fund to Fill the Gap!
(Albany, N.Y)— On the day Governor Paterson is announcing billions in budget cuts, the Better Choice Budget Campaign and the One New York: Fighting for Fairness joined together to call on the Governor and legislative leaders to abandon a budget policy that calls on working families and vulnerable New Yorkers to bear the burden of the state’s fiscal crisis.
Together the two coalitions represent more than 200 non-profit organizations, faith-based groups, service providers and unions that supply front line services to many of New York’s most vulnerable citizens. The two coalitions called on Paterson to examine revenue options rather than gutting services to close the state’s huge budget gap. Similar events are also occurring today in New York City, Buffalo, Rochester, Utica, Binghamton, and in Central Islip on Long Island.
The groups called on Paterson to use the Tax Stabilization Reserve Fund (a “Rainy Day Fund” that currently has $1.039 billion) to bridge the mid-year budget gap, to wait for a state fiscal relief package from Washington before making massive cuts in services, and to ask the wealthiest New Yorkers to take part in the “shared sacrifice as we did in 2003.
“Today, more than ever before, the economic crisis has placed a great burden on the average New York family,” said Phillip H. Smith, President of United University Professions, the union that represents 35,000 State University of New York faculty and professional staff. “Tens of thousands of qualified high school graduates and community college transfer applicants from moderate income families are denied admission to SUNY four-year colleges and universities. These institutions no longer have the funding needed to provide the faculty and professional staff to teach and counsel them. SUNY’s budget has already been slashed by $148 million this year, and any further cuts would be disastrous. We must protect access to higher education for students who cannot afford private colleges, and SUNY is the only hope many students have to achieve a college education. Reducing state support for SUNY disenfranchises New York’s most vulnerable families. It not only to limit their children’s opportunity for a productive career, but also limits the state’s opportunity to develop an educated workforce, which would speed our economic recovery.”
“The Pubic Employees Federation (PEF) had identified several options to help close the budget gaps that will avoid layoffs and damaging cuts to public services,” said PEF President Ken Brynien. “In this fiscal crisis it is more important than ever to make sure New York’s taxpayers get the best value for their tax dollars. The state could save up to $750 million a year by reducing the use of private consultants by instituting a freeze on all new consultant contracts, requiring a budget waiver to enter into those contracts and by examining all current consultant contracts to determine which can be terminated and which can be done by state employees at a lower cost.”
“The Governor’s notion of shared sacrifice seems to leave the wealthiest New Yorkers out of the equation, stated Ron Deutsch, executive director, New Yorkers for Fiscal Fairness. “This is very strange since the Governor believed in a balanced approach to closing the budget deficit in 2003, when he voted to raise taxes on the wealthiest New Yorkers rather than slash funding for programs and services to those most in need of state assistance. During that time, then-Senate Minority Leader Paterson helped the Legislature override the Governor’s vetoes on tax increases for the wealthy because he understood that the budget could not be balanced on the backs of working families. Now, however, Governor Paterson seems to have flip-flopped, employing the same approach and rhetoric as Governor Pataki in 2003, when the state was faced with an $11.5 billion deficit.”
The tax increases put in place in 2003 did not have the negative impact on the state’s economy, or on the number of high-income taxpayers in the state, that Governor Pataki predicted in vetoing the Legislature’s budget bills. In fact, the number of high-income returns grew steadily from about 245,000 in 2002 to an estimated 430,000 in 2007, and employment in the state increased each year that the temporary surcharge was in place. The wealthiest New Yorkers (over $200,000) also saw there incomes increase 108% between 2003-2008 (those below $200,000 only saw an increase of 15% over the same time period).
"New Yorkers can't afford mid-year cuts to education and health care. We need to follow President-elect Obama's lead, and address the fiscal crisis by asking the wealthiest New Yorkers to pay their fair share," Karen Scharff, executive director, Citizen Action of NYS.
“New York is facing hard times. However, poor and low income families are facing even harder times. They are struggling to meet their children’s basic needs. Parents are struggling to keep their jobs, a roof over their children’s heads, put food on the table, heat their homes and keep gas in the car. New York must be vigilant in protecting children as difficult budget decisions are being made. We join in calling for utilization of the Tax Stabilization Reserve Fund until federal relief can be realized stated Karen Schimke, Executive Director, Schuyler Center for Advocacy and Analysis.
“In difficult economic times, when tough decisions need to be made about how to close deficits, we must always be guided by the principle that the state not balance the budget on the backs of those most in need,” said Richard E. Barnes, executive director of the Catholic Conference. “While the Catholic Conference has not taken a position on which revenue streams should be tapped, it is clear that the options being presented must be considered. We are here to stress the importance of keeping in mind that those who have no voice – the very poor and vulnerable – are most in need of the state’s limited resources. Put simply, those who need the most help should be last in line for cuts.”
“We are calling on Governor Paterson and legislative leaders to recognize what a mistake it would be to cut critical programs any further. Programs like civil legal services for the poor are part of our state’s social safety net and have already been cut by over 50% this year. Civil legal services are essential in saving the state money by averting crisis – helping obtain unemployment benefits, avoid homelessness and ensure access to basic needs supports like food stamps. Further cuts would be both financially and socially irresponsible,” said Anne Erickson, president & CEO of Empire Justice Center.
"New York State has a constitutional obligation to provide the funding needed to educate every child. After years of court orders in the CFE case, the Governor & both houses of the legislature made a promise in law to provide the dollars our school children need. The idea that the Governor would break this promise and cut education funding in order to keep his promise to New York's highest income earners not to raise their taxes is not only unfair, it is unreasonable." Billy Easton, executive director, Alliance for Quality Education.
“Medicaid provides a lifeline for low-income New Yorkers and it must be protected. The state should not be attempting to cut its way out of this crisis by putting the health care safety net in jeopardy. We must continue the ‘patient-first’ health care agenda, and more wisely spend our health care dollars. Medicaid is not just about hospitals, it is first and foremost about people,” stated Lara Kassel, advocacy coordinator, Medicaid Matters NY.
“Voters throughout New York and the United States made it clear on Election Day that they wanted change. We hope Governor Paterson was listening. They're tired of politicians who bail out Wall Street while the poor and middle class are threatened with the loss of their homes and don't have enough to feed their families. Even Republican voters in NY believe that millionaires deserve a tax hike. When times are bad, you need to stimulate the economy by putting more money, not less, in the hands of those struggling to make ends meet. And with the life savings of so many New Yorkers have been flooded away by the misbehavior of Wall Street financiers, this certainly seems like the time for the state to dip into our rainy day fund," said Mark Dunlea, executive director of the Hunger Action Network of New York State.
“The Wall Street Meltdown was not created by working men and women and they must not be forced to bear the burnt of New York State’s Budget Crisis. Destruction of the public workforce, schools, state services and health care would leave our state with a terrible economy, hasten our decline and dramatically impact the ability of small businesses to survive. The state must be more realistic in its solutions to repair the budget shortfalls. Just as the federal government has moved quickly to support the financial sector with almost a trillion dollars, so too must Washington provide the assistance necessary for New York State and other states,” said the statement from Alan Lubin, executive vice-president of NYSUT and Bruce Ventimiglia, President and Chief Executive Officer of Saratoga Capital Management, LLC : Co- Chairmen : BALCONY : The Business and Labor Coalition of New York.
"New York State should not balance the budget on the backs of our families and our environment," said Alison Jenkins, fiscal policy program director, Environmental Advocates of New York. "For too long, the state's environmental agencies have tried to protect New York's natural resources and public health with insufficient staff and money. Further cuts at these agencies will only cost New York more in the years ahead."
Joseph Stiglitz, winner of the 2001 Nobel Prize in Economics (recently appointed chairman of the Governor’s Council of Economic Advisors), explains in his March 2008 letter to Governor Paterson and Legislative leaders that an increase in the tax on the portions of families’ incomes over some relatively high level is the least damaging mechanism for balancing state budgets during recessions. In contrast, cuts in government spending on goods and services that are produced locally (like education and health care) and cuts in transfer payments to lower-income families are most damaging to the economy, as they come closest to taking dollar for dollar out of the local economy.
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Is State spending really out of control?
What the Governor and Division of Budget fail to acknowledge is that the State has made some important (and expensive) new commitments in the last several years without any new revenue streams to pay for them:
• Family Health Plus Takeover and Medicaid Cap - $1 billion this year; $1.35 next year and $2.5 billion in 2010-11
• STAR – From $2.5 billion in 2001-02 to $6.0 billion in 2010-11
• CFE Settlement - $5.5 billion in new foundation aid by 2010-11 and Facilities investment in 2005-06 budget.
• $1.2 billion in cash and tax abatements originally going to AMD – now being awarded to “The Foundry” company owned by the Government of Abu Dhabi (very oil rich country) that will have their headquarters in the Cayman Islands to avoid taxation.
Additionally, according to research from the Fiscal Policy Institute, state spending in areas other than health, education, STAR, and transportation grew by less than 3% a year from 2004 to 2008.
Why Use the Tax Stabilization Reserve Fund
The Governor also lays out reasons why we should not use the state’s reserve funds to close the mid-year budget gap. Of primary concern is the fear of exhausting state reserves, as well as the triggering of a downgrade in the state’s credit rating. Most importantly he states, a large one-shot action, such as the use of reserves, does nothing to address our state’s looming out-year deficits.
We strongly recommend using the Tax Stabilization Reserve Fund (TSRF). It is specifically for unplanned end of year deficits and totals $1.039 billion. It is an important backstop or cushion for getting through the current fiscal year without making $2 billion in cuts to vital services, as the Governor has proposed.
Using the TSRF also provides the state the time to have a well-informed debate over expenditures and revenues in the 2009-10 state budget. This would allow the debates to be more deliberative than usual since the Governor will be proposing his Executive Budget on December 16, 2008, which is 5 weeks earlier than required.
The Legislature cannot pass a law transferring money from the Tax Stabilization Reserve Fund to the General Fund, nor can it pass a law requiring the Governor to use the money from this fund. The Governor simply has to borrow the amount needed from it on March 31, 2008, if disbursements exceed receipts and money available to make those disbursements.
The Governor and the Legislature should not make more cuts during the current fiscal year than are necessary, given this $1 billion cushion. And, most importantly, the state should not make additional cuts in services until we know the size and scope of a possible federal relief package from Washington.
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GOVERNOR PATERSON DELIVERS $5.2 BILLION, TWO-YEAR DEFICIT REDUCTION PLAN
Savings of $2 Billion in Current Year, $3.2 Billion Next Year Are Spread Across All Areas of State Spending
Plan Represents Series of Tough Choices Necessary to Address Record Four-Year $47 billion Budget Deficit
Governor David A. Paterson today announced a comprehensive, two-year $5.2 billion deficit reduction plan that will entirely eliminate the State's $1.5 billion current-year shortfall, protect against further declines in revenue in a volatile economic climate, and make a substantial down payment on next year's deficit.
Governor Paterson’s proposed reductions are spread across virtually every area of State spending, including education, health care, human services, the State workforce, and others. These actions would produce $2 billion of savings in 2008-09 and $3.2 billion in 2009-10.
“The deficit reduction plan I have put forward today represents a series of difficult choices across virtually every area of State spending,” said Governor Paterson. “The only way we are going to overcome this unprecedented crisis is through shared sacrifice. I look forward to engaging in a productive dialogue with the Legislature about the actions we must take at next week’s special session to address our State’s record budget deficits.”
Governor Paterson’s plan would close the State’s $1.5 billion current-year shortfall, while also providing a $548 million cushion against additional declines in revenue during 2008-09. These proposed actions would also reduce the State's 2009-10 deficit from $12.5 billion to $8.8 billion and four-year budget deficit by from $47.0 billion to $35.9 billion.
After implementing Governor Paterson’s deficit reduction plan, 2008-09 All Funds spending would still total $119.2 billion, an increase of $3.1 billion or 2.7 percent over the previous year. State Operating Funds spending would total $77.0 billion, an increase of $1.9 billion or 2.5 percent. Inflation is currently projected to be 4.2 percent for 2008-09.
Governor Paterson continued: “The unfortunate reality is that many worthy programs with laudable goals, some of which I have supported in the past, will have to experience reductions in funding. These are not decisions that I have made lightly. With the State facing the largest deficits in its history, we have no other option but to make these tough but necessary choices. In times like this, government needs to put the public interest ahead of special interests - this budget plan tackles this financial crisis head-on and addresses the State's collective needs for fiscal responsibility.”
Governor Paterson’s plan includes the following major components. A full listing of all proposed actions is also attached.
School Aid (Fiscal Year 2008-09 Savings: $585 million, Fiscal Year 2009-10 Savings: $844 million). The deficit reduction plan would decrease the rate of growth in School Aid in the 2008-09 School Year by $836 million ($585 million in the 2008-09 State Fiscal Year). Even after these actions, 2008-09 School Year School Aid would still increase by $1.0 billion or 5 percent compared to 2007-08 and total $20.7 billion. Moreover, the level of School Aid spending statewide in 2008-09 would represent an increase of $6.2 billion or 43 percent compared to 2003-04. According to the US Census Bureau, New York spent on average $14,884 per pupil on its public schools in 2006 – the highest amount of any State and 63 percent above the national average.
Medicaid/Health Care (2008-09 Savings: $572 million, 2009-10 Savings $1.2 billion).
The deficit reduction plan recommends $1.8 billion in Medicaid and other health care savings over the next two years. Major actions include reducing reimbursement rates and eliminating trend factor increases across all sectors, recouping Early Intervention overpayments from New York City, using unspent Graduate Medical Education (GME) funds for financial plan relief, and discontinuing funding for several HCRA programs. Additionally, to ensure that the insurance industry contributes its fair share of savings, assessments levied upon that industry will be increased.
Even after these actions, 2008-09 State Funds Medicaid spending is still expected to increase over the next year by $145 million or 1 percent to $15.3 billion. Additionally, State Funds Medicaid spending is still projected to increase by $1.5 billion or 10 percent in 2009-10.
Other Education-related Programs (2008-09 Savings: $36 million, 2009-10 Savings: $16 million).
The deficit reduction plan recommends a number of other savings actions in education-related areas outside of School Aid. These include reduced funding for grants awarded by the NYS Council on the Arts by $7 million and reduced funding for Bundy Aid to private colleges and universities by $2 million. It would also reduce library aid by $20 million on a one-time basis and continue to provide reimbursement to non-public schools for attendance-taking consistent with the methodology used in 2007-08 thereby saving $7 million.
Higher Education (2008-09 Savings: $115 million, 2009-10 Savings: $233 million).
The deficit reduction plan recommends increasing both SUNY (from $4,350 to $4,950) and CUNY (from $4,000 to $4,600) annual undergraduate tuition by $600. Tuition for these institutions has not been increased since 2003-04, and before that in 1995-96. Spring 2009 tuition will increase by $300. The full annual $600 increase would become effective in the following academic year.
The new recommended tuition rates are below 2003-04 levels after adjusting for inflation ($5,100 for SUNY, $4,700 for CUNY), and also below those at all public colleges in the Northeast and Mid-Atlantic regions. Moreover, even after this increase, SUNY and CUNY tuition would still be below the $5,000 threshold for Tuition Assistance Program (TAP) awards, ensuring that the neediest students would have their entire tuition costs covered.
In a departure from more than 30-year old practice of using 100 percent of the revenue resulting from tuition increases to offset General Fund spending on higher education, SUNY and CUNY will be allowed to retain 10 percent of the fiscal benefit from the 2008-09 spring semester increase and 20 percent of the full annual increase in 2009-10 for increased investment.
Commensurate with the 10 percent reduction in operating support for SUNY and CUNY senior colleges already enacted earlier this year, the plan also reduces per-student base aid to community colleges by an average of 10 percent, from $2,675 to an average of $2,405. To recognize the disproportionately adverse impact that this reduction could have on smaller community colleges if applied in an across-the-board fashion, legislation will be proposed to reduce the impact of the proposal on these colleges, as follows: colleges with fewer than 3,000 full time equivalent students will have their base aid payments reduced by $160 per student; colleges with between 3,000 and 6,000 students will have their base aid payments reduced by $230; and colleges with more than 6,000 students will have their base aid payments reduced by $300. After these reductions, total State base operating aid support for community colleges will be $580 million.
Local Governments (2008-09 Savings: $134 million, 2009-10 Savings: $110 million).
The deficit reduction plan includes several actions related to local governments. The proposal eliminates $41 million in additional Aid and Incentives for Municipalities (AIM) funding for New York City that was added in the 2008-09 Enacted Budget. New York City will still receive an AIM payment of $205 million in 2008-09.
For municipalities outside of New York City, the plan would maintain 2009-10 AIM payments at 2008-09 levels, eliminating a previously scheduled $61 million increase. Even after these actions, AIM payments outside of NYC would still total $755 million in 2009-10, an increase of $290 million or 62 percent compared to 2004-05. Governor Paterson is also proposing to reduce 2009-10 VLT Impact Aid for 17 municipalities by 50 percent compared to 2008-09 levels and limit eligibility for this program to municipalities that already participate. Yonkers would not be impacted by this VLT Impact Aid proposal. Although these actions will not provide savings in the 2008-09 fiscal year, Governor Paterson believes it is important to enact these reductions now so that local governments will have an opportunity to prepare for these changes in State aid before the beginning of their 2009 fiscal years and to modify their spending accordingly to find cost efficiencies.
Workforce (2008-09 Savings: $137 million, 2009-10 Savings: $167 million).
Governor Paterson will partner with State employee unions to reduce personnel costs, and has proposed the following actions for collective bargaining: delaying salary payments for five-days worth of work during the current fiscal year until an employee leaves State service, and withholding the 3 percent, 2009-10 salary increase previously negotiated with several unions before the State’s finances deteriorated to their current level. He has proposed the following actions that do not require collective bargaining: requiring new State employee retirees to pay for a greater portion of their health care costs; requiring State employees and retirees to contribute to the Medicare Part B premiums; and rescinding a vacation exchange program for Management/Confidential employees.
Human Services (2008-09 Savings: $20 million, 2009-10 Savings: $75 million).
In the area of human services, major recommendations include partially reducing a cost-of-living adjustment for human service providers from 3.2 percent to 2.2 percent; reducing funding for the Neighborhood Preservation Program and Rural Preservation Program; delaying the phase-in of the “Bridges to Health” program; and eliminating a $3.0 million operating subsidy for the New York State Housing Authority (NYCHA), which has a $2.8 billion operating budget. Currently, no other local housing authority in the State besides NYCHA receives an operating subsidy.
Governor Paterson is recommending several actions that will help right-size the Office of Children and Family Services’ (OCFS) juvenile justice system. These actions include:
Closing Six Underutilized Youth Facilities: The Adirondack Residential Center in Clinton County, the Cattaraugus Residential Center and Great Valley Residential Center in Cattaraugus County, the Pyramid Reception Center in the Bronx, the Rochester Community Residential Home in Monroe County, and the Syracuse Community Residential Home in Onondaga County.
Downsizing Two Underutilized Youth Facilities: The Allen Residential Center in Delaware County and the Tryon Residential Center in Fulton County.
Closing Three Underutilized Evening Reporting Centers: These include the Capital District Evening Reporting Center in Albany County, the Buffalo Evening Reporting Center in Erie County, and the Syracuse Evening Reporting Center in Onondaga County.
The facilities recommended for closure or downsizing have an average vacancy rate of 63 percent. Great Valley and Rochester have 100 percent vacancy rates.
Overall, these actions will result in a 255 full-time equivalent reduction in the size of the OCFS workforce. The agency will make all possible efforts to ensure that this reduction is achieved through attrition.
Other Actions (2008-09 Savings: $424 million, 2009-10 Savings: $514 million).
The deficit reduction plan also includes a number of other actions in the areas of environmental conservation, economic development, and financial management.
During the August 2008 special session, funding for most new executive and legislative programs was reduced across-the-board by 50 percent and 6 percent, respectively. Governor Paterson is recommending reducing new legislative programs by 50 percent of remaining spending, commensurate with the reduction enacted for new executive programs.
Governor Paterson is also proposing to expand the current 5-cent deposit on beer and soda containers to water and other non-carbonated beverages, capture all unclaimed deposits, and use that funding to offset other financial support to the Environmental Protection Fund. Additionally, spending in the EPF would be reduced by $50 million, which would be transferred to the General Fund. Notwithstanding these budgetary actions, the EPF is still projected to have a year-end balance of $34 million, and there will be no impact on any current funding commitments for environmental conservation.
Governor Paterson’s plan would reduce funding for several economic development initiatives, including local tourism matching grants ($1.5 million), JOBS Now ($1.5 million), the Focus Research Center at Albany Nanotech/RPI ($2.6 million), Technology Transfer ($1 million), and Faculty Development programs ($1 million). It is also recommended that the Centers for Applied Research and Technology program be allowed to expire at the end of 2008, providing savings of $900,000.
Other proposals include transferring excess revenues from certain State authorities and special revenue accounts into the General Fund, including the New York Power Authority ($40 million in 2008-09, $25 million in 2009-10) the Dormitory Authority ($6 million in 2008-09), the Office of Temporary Disability Assistance’s federal administration account for child support enforcement activities ($100 million in 2008-09, $5 million in 2009-10), the Battery Park City Authority ($20 million in 2008-09, $250 million in 2009-10), and the Empire State Development Corporation ($60 million in 2008-09, $8 million in 2009-10). Transferring funds from the Battery Park City Authority would be negotiated with that organization’s board, the Office of the New York City Mayor and the Office of the New York City Comptroller. It is expected that any potential transaction regarding the BPCA would include a comparable financial benefit for New York City as well.
Additionally, $50 million in eligible capital expenses for affordable housing previously anticipated to be financed on a pay-as-you-go basis will be financed through bonding.
“Thus far, in partnership with the Legislature, New York has acted swiftly and responsibly to respond to a deteriorating fiscal environment. And we must do so again at next week’s special session by making hard choices, not looking for easy answers,” said Governor Paterson.
Governor Paterson continued: “Raiding our $1.2 billion in rainy day reserves sounds logical, but doing so would provide only a fraction of the funds we need, does nothing to address next year’s record deficits, threatens our State’s good credit rating, and leaves us with no options to meet year-end expenses if the downturn is worse than expected. Delaying action in hopes of help from Washington sounds sensible, but doing so sends a message to our nation’s leaders that we aren’t willing to solve our own problems. Raising taxes in special session sounds easy, but ignores the fact that overspending is at the root of our problem.”
Full Detail on the Governor’s Proposals can be found on the web at:
www.budget.state.ny.us
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From Working Families Party
With New York facing a $2 billion deficit this year and another $12 billion next year, everyone -including New York’s wealthiest - will have to do their part to get our state through this crisis,” said WFP Executive Director Dan Cantor:
“The Governor’s plan asks school children, local property tax payers, students at SUNY and CUNY, the elderly and New Yorkers with disabilities to sacrifice. The only people exempt from the pain are wealthy New Yorkers and the Wall Street barons who got us into this in the first place. That’s wrong,” he said.
Following the economic downturn after September 11, the national recession, and the burst of the dot-com bubble, New York increased income tax rates in 2003. The State employed a temporary top rate of 7.25 percent for single filers with incomes over $100,000 and 7.7 percent on income over $500,000.
With New York facing a $2 billion deficit this year and another $12 billion next year, everyone - including New York’s wealthiest - will have to do their part to get our state through this crisis.
The Governor’s plan asks school children, local property tax payers, students at SUNY and CUNY, the elderly and New Yorkers with disabilities to sacrifice. The only people exempt from the pain are wealthy New Yorkers and the Wall Street barons who got us into this in the first place. That’s wrong.
The Governor repeatedly says that raising taxes on the wealthiest New Yorkers would have a negative impact on New York’s economy, but an examination of New York’s post 9/11 surcharge shows no negative economic impact. In fact, during this time, high-wage earners saw positive income growth, economic conditions improved overall, and the State saw thousands of new job created.
The Governor also suggests that an increase would put New York at a competitive disadvantage with neighboring states. How does he reconcile that with the fact that families in New Jersey earning more than $500,000 currently pay 8.97% in taxes – nearly a point and a half more than they would in New York under the Millionaire’s Tax proposal?
No less distinguished a voice than Nobel Prize winning economist Joseph Stiglitz recently wrote to Assembly Speaker Sheldon Silver, Governor Paterson and Senate Majority Leader Dean Skelos about the choices that await them as they confront New York’s gaping deficit.
Stiglitz wrote that ‘Increases on higher-income families are the least damaging mechanism for closing state fiscal deficits in the short run. Reductions in government spending on goods and services, or reductions in transfer payments to lower-income families, are likely to be more damaging to the economy in the short run than tax increases focused on higher-income families.’
He’s right. The Governor should be calling for real shared sacrifice, not just cuts that hurt working families.