Tough Choices Avoided in 2010; State Passes More Taxes, Fees
The severity of this budget crisis and taxpayers’ pleas of no more taxes has fallen on deaf ears. A tenuous budget has been largely negotiated between three, and sometimes two, men in a room and here we are three months past the deadline with still an incomplete budget that increases spending, taxes and fees. The Majority’s unwillingness to make the tough choices succeeded in a budget largely based on speculative revenue that will likely lead to another deficit this fiscal year, and assured more burdens for the average property owner, family and business. As I write this column, more than 70 percent of the spending plan has been approved through weekly extenders in a piecemeal fashion, all with the threat of a government shutdown looming. Also, the unequal treatment of Upstate vs. Downstate holds firm. This is not how our great state should be run.
Besides the obvious refusal to do what our Downstate leaders were elected to do by passing a balanced budget on time, here is a classic reason why we need new leadership in both houses: Throughout 2010-2014, $2.1 billion has been allocated for film tax credits, 90 percent of which will benefit Downstate-based film productions. While this is good news for the film industry, where are the tax credits for existing businesses and manufacturers in Upstate New York?
More bad news for businesses was the elimination of the Empire Zone Program. It has been replaced with the new “Excelsior” program. Here is the main difference: funding for job development has been cut significantly and tax credit zones have been reduced. In the past, the state invested $600 million per year in the Empire Zone program which went toward tax credits for businesses in 85 zones. With the new Excelsior program, funding has been reduced to $50 million and only 48 regions qualify. With our economy struggling and unemployment levels high, I fail to see the logic in this policy change. Though businesses who have agreements under Empire Zone will continue under those agreements, this program is being phased out. In the past, several of our area manufacturers and businesses that provide good-paying jobs have received Empire Zone credits and created more jobs for our region.
The budget also eliminated tax breaks for residents. Properties valued at more than $1.5 million are no longer eligible for STAR tax credits. Others disqualified from STAR are those with incomes of more than $500,000. Cigarette taxes also were raised. New York now has the highest cigarette tax in the nation.
Among the budget bills was an overtly political measure, which passed in the Assembly, to redistrict prisoners. Rather than counting prisoners as residents of where they are housed while in prison, they would be counted as residents of their last address. Though prisoners cannot vote, this population helps determine election districts in the Assembly and Senate. This would not be good for Upstate New York. Many large prisons are situated in Upstate but house prisoners who are former New York City residents. This would harm our region and create more voting districts Downstate so when lines are drawn, more Senate and Assembly seats would be located in Downstate.
We need to stop spending and find ways to consolidate government. If we continue on this spending path, we will end up like other states and risk losing our attractive assets. In California, their budget deficit is $19 billion. Ours came in at $9.2 billion this year. It’s only a matter of time and perhaps another budget cycle like this one before New York is in the same situation as California. One can only borrow, tax and fee so much before the system bottoms out.
Our state is in need of reform. Beyond a spending cap, we need more Medicaid fraud and abuse protection. We need to give businesses tax breaks, not more taxes and higher energy bills. With business tax breaks, this would lead to job creation which would put more unemployed to work. We need consequences for Legislators who decide to disobey state laws and pass a budget without holding joint conference committee meetings.
If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at barclaw@assembly.state.ny.us or by calling (315) 598-5185.