New York State’s Prosperity Depends on Reform

Capping spending, reforming the tax code, eliminating unfunded mandates, reducing regulation

Much of the news the past few weeks has been dominated by the back-and-forth debate going on in Washington about raising the nation’s debt limit vs. passing real spending cuts and reform programs to balance the federal budget. As expected, much of these negotiations have been full of partisan, political rhetoric.

But restoring fiscal sanity to government is not unique to Washington; changes need to be made on ALL levels of government, and especially here in New York state. Sincere discussions about our state’s financial health need to be had by all three branches in Albany. This discussion should begin—and end—with restoring fiscal accountability that will lead to a stronger, more affordable and prosperous New York.

While the 2011-12 State Budget achieved some progress on this front, the state still faces massive fiscal challenges, which are not far off in the future. They are here and now, and are as follows:

  • The state still spends too much;
  • New York’s tax code is too confusing, complex and costly for taxpayers and businesses, and acts as a deterrent to private-sector job creation;
  • Albany continues to pass its mandates—and their costs-- onto the backs of local governments and school districts leading to higher property taxes; and
  • Our state needs more private-sector jobs.

Fortunately, there are real, straightforward solutions to these problems – cap state spending, reform New York’s tax code so it’s fairer and flatter, eliminate unfunded mandates, and remove burdensome regulations that inhibit job creation.

First, New York state does not have a revenue problem, it has a spending problem. In fact, over the past decade, state spending has risen by nearly 50 percent. Albany must learn to live within its means and stop spending more than it takes in. Liberal politicians always promise to cut spending, but those promises usually turn up empty. The solution requires enacting a state spending cap that imposes fiscal discipline on Albany.

Assembly bill A.5370 would establish a cap limiting the growth of state spending to no more than the rate of inflation of the previous three calendar years. This cap will make fiscal accountability a reality and prevent Albany from running up its tab.

Secondly, New York’s tax code is nearly six thousand pages long and nearly impossible to be comprehended by the average small-business owner. Obviously, our state’s complex, complicated and costly tax code is a major disincentive to job creation. Businesses are looking to other states with less complicated tax structures and that do not penalize earnings, savings and investments the way New York does. We need to move forward with real tax reform that leads to a simpler, fairer and flatter tax code resulting in lower tax rates for everyone. This step is essential to improving our state’s economy.

Another important step in bringing back fiscal sanity to New York is mandate relief. Whenever Albany tells local governments to do something — start a program, provide a service, meet a perceived need — and doesn’t provide funding, that is an “unfunded mandate”. The increased costs caused by unfunded mandates are absorbed by local governments and school districts, which simply leads to increased local property taxes. Two legislative initiatives, A.4811 and A.8447, the latter of which I sponsor, would place a permanent moratorium on certain unfunded mandates imposed on local governments and school districts, require bills to state the estimated annual costs to affected communities, and identify unfunded mandates that need to be repealed. These bills would end Albany’s continued cost shift.

Lastly, Albany needs to focus on job creation. And this includes removing regulatory barriers to private-sector job creation and transforming state agencies so they work WITH, not AGAINST, job creators.

Common sense and real, simple solutions are what will move New York forward and increase prosperity here in the Empire State. We already know the problems, now it is time for Albany to find the solutions.

As always, I welcome your questions and concerns. Please do not hesitate to contact me at my district office, 15 Bridge St., West Carthage, call me at (315) 493-3909, or email me at blankenbushk@assembly.state.ny.us.