Better Choice Budget for New York

[Do you agree with what's below? Call our Governor and state legislature now toll-free at (877) 255-9417; specific budget cuts that Pataki has proposed (that will drive up our local taxes even more) are listed at bottom of this petition.]

A statewide poll proved just a few years ago that the vast majority of people across our state really do want common-sense tax fairness. They want unfair tax loopholes closed for corporations and the rich in order to stop our local property and sales taxes from skyrocketing any higher, and in order to stop budget cuts to our schools, universities, hospitals, nursing homes, home care providers, and those who truly need help from our government.

To be specific, the Garin, Hart, Yang Research Group sampled 513 registered voters across NY in April 2003 and found four things:

1. By 73\% to 23\%, New Yorkers favor a proposal to raise the
state personal income tax by seventh-tenths of one percent on incomes of more than $100,000, and by 1.4\% on incomes of more than $200,000.

2. By 85\% to 10\%, New Yorkers favor a proposal to adopt a
stronger state corporate alternative minimum tax, to make sure that
corporations with more than a million dollars in profits cannot avoid
paying state taxes through the use of loopholes and deductions.

3. By 78\% to 17\%, New Yorkers favor a proposal to close
loopholes in the state's corporate income tax that let multi-state
and multi-national corporations avoid paying their fair share of
state taxes on profits made in New York.

4. By 63\% to 24\%, New Yorkers favor a proposal to re-institute a
stock transfer tax of one or two cents per share on stocks traded on
the New York Stock Exchange. Three billion dollars a year could be raised from speculators on Wall Street at the New York Stock Exchange-- the stock transfer tax was eliminated in 1981; if it was reinstituted at two and a half cents per share (half of what it was then), it would generate six billion dollars a year-- half for the state and half for NYC (three billion for the state), according to the Working Families Party (see below).

[see http://nysaflcio.org/press_releases/2003/04_14_03_budget_poll.htm ;
http://www.WorkingFamiliesParty.org/issues/fivefacts.pdf ;
http://www.WorkingFamiliesParty.org/issues/sttqa.pdf ]

According to the Fiscal Policy Institute, the fact is that the wealthiest 1\% of New Yorkers now now pay literally about half the income taxes to Albany as they did in the 1970's under Rockefeller. Because of the unfair shift of the tax burden from the wealthy to the rest of us, our state's tax system has gotten so skewed that middle-class New Yorkers now actually pay about double the state and local taxes that the wealthiest 1\% of New Yorkers pay, as a percentage of income.
[ http://www.FiscalPolicy.org/taxhistory2.htm ;
http://www.ITEPnet.org/wp2000/ny\%20pr.pdf ]

Indeed, New York now has the biggest gap between the rich and the poor in the entire country, according to the Fiscal Policy Institute (FPI)-- "Over the past two decades, a huge gap has opened up between rich and poor in New York State, according to a major new report. In the early 1980s families in the top 20 percent made five-and-a-half times as much as those in the bottom 20 percent. By the early 2000s, the top earners made over eight times as much. In the early 1980s, New York State ranked 11th in income inequality. The average income of the richest 20 percent of New Yorkers increased from $79,000 to $130,000 over 20 years (in 2002 dollars)-- an increase of 65\% while the average income of the bottom fifth went just from $14,000 to $16,000. The time has certainly come for New York's business and government leaders to address the implications of a growing income inequality not only for our economy, but also for our democracy."
[ http://www.FiscalPolicy.org ]

An unfair system of taxes-- and the record-setting inequality that we have because of it-- have hurt, not helped, our state's economy. According to the the Governor's own Department of Labor data, New York has been below the national average in job growth rate since 1995, ranking the state 45th in the country in annual average employment growth from 1995-2004. If the state had grown at the national average, 502,100 additional jobs would have been created during the Pataki administration.
[ http://www.assembly.state.ny.us/Press/20060123c/ ]

It's for these reasons that all of the following groups across our state signed on to be part of the statewide Better Choice Budget Coalition last year, which made much of the above common-sense tax recommendations to solve our state budget problemss-- Dutchess Outreach, Hopewell Citizens for Clean Water, New York Statewide Senior Action Council, New York State Alliance for Retired Americans, Children's Defense Fund, American Academy of Pediatrics, New York State Coalition Against Domestic Violence, New Yorkers for Fiscal Fairness, CSEA, AFSCME, Public Employees Federation, New York State United Teachers, National Education Association, Alliance for Quality Education, National Association of Social Workers, SEIU Local 200 United, Communication Workers of America, Local 1180, New York State Labor-Religion Coalition, Interfaith Alliance, Interfaith Impact of New York State, New York State Episcopal Public Policy Network, New York State Community Action Association, Hunger Action Network of New York State, Citizen Action of New York, SENSES, the Greater Upstate Law Project, and dozens more across the state.
[ http://www.ABetterChoiceforNY.org ;
http://www.ABetterChoiceforNY.org/commentary_1.htm ]

January 2006 Statement from Frank Mauro, Executive Director of the Fiscal Policy Institute on Governor Pataki's proposed budget:

"Governor Pataki praised the government policies that have allowed New York State to end the 2005-2006 fiscal year with a surplus of at least $2 billion. But in listing the policies that contributed to this surplus, he leaves out the most tangible factor - the temporary tax increases that were enacted in 2003, over his veto. In fact, in 2003 when he vetoed these tax cuts he predicted that they would be disastrous for the state's economy and state finances.

What was the alternative that the Governor wanted in 2003? Much less in tax increases (and no progressive tax increases) but much deeper service cuts.

The problem with the Governor's proposal was that during a downturn in the economy like we were experiencing in 2003, on a dollar-for-dollar basis, service cuts of the type the Governor wanted would have had a much more negative effect on the economy than tax increases on households with the greatest amounts of disposable income.

The Governor's position was wrong then, and we know it now. The course that the Governor proposed in 2003 was the course that the state had taken in the early 1990s when New York last faced a recession and large budget gaps. The steps taken in the early 1990s (when it did most of its budget balancing on the expenditure side of the budget) prolonged the recession and the state's fiscal problems. The steps taken in 2003 worked much better, as basic economic theory would indicate.

In 2003, we distributed an analysis by Professor Joseph Stiglitz, a winner of the Nobel Prize in Economics, explaining why state budget cuts are more counter-productive than progressive tax increases during a recession. That paper is available on the FPI website at
http://www.fiscalpolicy.org/10-30-01sfp.pdf. The actions taken by the
Legislature in 2003, over the Governor's veto, showed an understanding of the basic economics of the dilemma that the state then faced.

The Governor is now trying to misrepresent the history of the last three
years, to take credit for the results of a positive approach to policy
making in a recession - that he tried his best to stop."

So-- our state's tax system has become tremendously skewed to favor the well-off, and the vast majority of New Yorkers want to see that changed,dozens and dozens of citizens' groups across our state band together every year lobbying for tax fairness (to close unfair tax loopholes in order to fully fund education, health care, and social services)-- and our state's actual budget surplus for the current fiscal year is projected to be $3.3 billion ($1.3 billion above the Governor's forecasts according to a press release and budget analysis issued by Senate Major Leader on January 25)...

Given all that, you'd think our Governor would propose a sensible tax and budget policy reflecting this, right?

You'd think that he would do the right thing, make our tax system fairer for ordinary New Yorkers, and take positive steps towards making sure that all New Yorkers have health insurance (there are still 2.5 million uninsured in New York State, 200,000 of whom are children living in poverty), and housing-- with a $1 billion bond for the NYS Housing Trust Fund that would result in thousands of construction jobs to build much needed affordable housing.
[ http://www.hungeractionnys.org/lobbyday06.htm ]

He's not, though.

Unfortunately, our Governor instead has proposed to punish working-class New Yorkers even more by proposing to re-institute a sales tax on clothing-- and attempt to eliminate New York's estate tax.

Incredibly, he also has proposed these painful and unnecessary cuts to our state budget:

-- A 6.6\% school property tax hike all over the state because of his paltry
proposed $634 million addition to the public education budget (meaning the typical school district would need to raise property taxes by an average of 6.6 percent just to maintain present services); the Educational Conference Board, a statewide education organization, has stated that districts must spend $2.15 billion more next year to maintain current programs and services.
[ http://www.nysut.org/media/releases/20060119budget.html ]

-- A $60 million cut to BOCES, a $109 million cut to Special Education, and a $78 million cut to School Building Aid
[ http://www.assembly.state.ny.us/Press/20060123c/ ]

-- A $500 tuition increase at State University of New York (SUNY) operated campuses, and a $189 million cut to the state's Tuition Assistance Program (TAP)
[ http://www.nypirg.org ]

-- A $1.3 billion cut from health-care providers and recipients, resulting not only in diminished care, but also an estimated statewide loss of 29,700 jobs. The Healthcare Association of New York State has determined that every one of New York State's 229 not-for-profit hospitals would lose critically needed funding under the Governor's budget plan. All told, the budget would cost hospitals in New York State a staggering $431 million in just one year alone. In 2004 alone, hospitals statewide lost $127 million, increasing their cumulative losses to $2.3 billion since 1998. Meanwhile, in 2004, New York health maintenance organization (HMO) profits totaled $847 million, bringing their total profits to $3.7 billion over the past six years.
[ http://www.hanys.org/communications/pr/2006/012606_pr.cfm ]

-- "Full family sanctioning" (cutting whole families off welfare if just one member of the family is sanctioned)
http://www.empirejustice.org/MasterFile/Legislation/PublicBenefits/State/Testimony/2006/HumanSvcsTestimony.htm

-- Elimination of a state website that provides price comparisons for prescription drugs-- leaving consumers in the dark (repealing law Ch. 293 of 2005)
[ http://www.nysenior.org ]

Finally, the Governor has also completely ignored the March 2005 NYS Supreme Court decision ordering the State of New York to provide New York City's schools $5.6 billion in operating aid and $9.2 billion in building aid. The governor has appealed the order and continues to ignore the underlying Court of Appeals' ruling -- now over 540 days past the compliance deadline -- to overhaul the entire school-funding system. The so-called "sound basic education" plan that he put forth has already been rejected by the legislature and the courts.
[ http://www.cfequity.org ]