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March 30, 2009 - 8:31am

Proposed state budget will suck $10 billion out of the economy

posted by Howard B. Owens in Albany, taxes, Paterson.

We keep hearing about how New York is in crisis.

So I find this morning's Buffalo News headline a little shocking: Both spending and taxes soar in state budget.

When you or I find our income greatly reduced, our primary option is to massively cut our own spending. We can only raise more revenue if we can sell our services on the open market for a higher fee. We don't have the option of extorting more money from people, unless we want to risk jail time.

The government, especially New York's government, doesn't work that way.  When it find itself facing revenue shortfalls, not only can it force its citizens to pony up more taxes and fees, it can go right ahead and increase spending as well.

Where on the measure of common sense does this fall?

The lead of the News story, with its list of new taxes and fees, along with the total amount raised, is stagger:

The state’s new, inflation-busting budget will require New Yorkers to pay more to go fishing and hunting, drive a car or motorcycle, have life insurance, operate the lights and heat in their homes, buy cigarettes, own a cell phone and drink beer, wine and bottled water.

Single taxpayers making more than $200,000 a year will see a jump in taxes, as will bus companies, nuclear plants, food processing companies, racehorse owners, farmers, pesticide applicators, grocery stores and anyone wanting to open a hospice.

In all, the total number of new taxes, fees and various assessments and surcharges will top $7 billion in the new budget that state lawmakers will vote on beginning Tuesday. The governor’s office put the number at $5.3 billion, but that misses a number of levies.

That's $7 billion that will be sucked out of state's economy. That's $7 billions in lost jobs, lost opportunity and lost economic growth.

The News also reports that items such as the end of the STAR rebate program, will cost taxpayers a total of $10 billion when all is said and done.

That's $10,000,000,000.

Meanwhile, spending is skyrocketing to an astonishing $131.8 billion.

With a $17.7 billion deficit to wrestle—up from $16.2 billion just a week ago — Paterson and lawmakers turned to every possible revenue source to go along with $6.5 billion of assorted cuts to hospitals, nursing homes and other programs. Rounding out the money to fill the gap is $6.2 billion in federal stimulus aid.

It's not enough to just close the budget gap, Gov. Paterson and the legislative leadership just can't wait to spend more money.  As the D&C reports, the new budget increases spending by 9 percent, or about $10 billion. Again, in tough times, you and I must cut spending, but not the government -- it just raises taxes and fees and takes more money out of your pocket.

And what's with using $6 billion in federal stimulus money to balance this bloated budget? That money should go to things that, you know, supposedly, allegedly will stimulate the economy, such as new infrastructure projects. Or helping small businesses. Not to increasing the size and scope of government.

Fiscal mismanagement like this should be an impeachable offense. Albany is out of control.

Peter O'Brien
Peter O'Brien's picture
Last seen: 4 years 1 month ago
Joined: Mar 4 2009 - 1:24pm
If anyone is surprised at this, they have not been paying enough attention to NY politics. Emperor Nero Magoo hes no prayer at a an election bid.
Kyle Macey
Kyle Macey's picture
Last seen: 8 years 9 months ago
Joined: Sep 9 2008 - 12:44am
Frankly, spending is what will save this economy. The backbone of the U.S., more specifically, New York, is retail. So many small businesses and comission-payed employees rely on New York to be spending and circulating the economy. I think New York is on top of things as far as keeping things moving. Look at Batavia, for example. during this recession, our wonderful city is on top and still building and moving economy. We, as a city, are not seeing the worst of this recession, and in fact, are one of the prime examples of being able to push through it. Sure, it's bad, but believe me, there are other cities and states that are doing far worse.
Dave Meyer
Dave Meyer's picture
Last seen: 2 years 4 months ago
Joined: Feb 4 2009 - 5:37am
Hopefully this will be the straw that breaks the camel's back. We all know how dysfunctional the legislature is, but I for one am hard pressed to believe that there is **NO** parliamentary means by which those opposed to shenanigans such as this cannot block such actions. All we hear is that Shelly Silver controls what goes on in Albany, but he's ONLY ONE GUY!! Do they expect us to believe that a majority of the 149 other losers that comprise the assembly and the 62 state senators can't mount a parliamentary move to block this if they're so outraged by this?? Yeah...right. We're paying 212 people to represent the residents of this state an average of (a guess on my part) $75K for a part time job and this is what we end up with? I've posted here before that until they **ALL** are gone, this is what we'll always have.
C. M. Barons
C. M. Barons's picture
Last seen: 5 months 3 weeks ago
Joined: Jul 29 2008 - 11:56pm
Just exposing a 9% increase in spending is not enough to condemn this budget. Where is the money being spent? There are some increases that cannot be avoided. Example: paper is a mandatory office supply. If the cost of paper goes up 9%, that's an unavoidable increase. If Medicaid expenses go up 9% as our aged population demands, that is an unavoidable obligation. In any budget, expenses drive the figures. Some expenses are outside control. In conjunction with this budget, Paterson should publicly direct state/local government and agencies to economize. Mandate group-bid supply and equipment purchases. Mandate energy conservation. Reward agencies that underspend. Mandate early retirement incentives. Cap overtime. Lower thermostats. Energy audits. Limit unnecessary travel by encouraging teleconferencing. End interscholastic night games with artificially lit fields. While an employee at a local school district, I saved thousands of dollars by centrally purchasing supplies such as batteries. Teachers were using petty cash to buy batteries at the convenient store for three-dollars apiece!
John Roach
John Roach's picture
Last seen: 3 weeks 1 day ago
Joined: May 29 2008 - 5:22am
The use of Federal bail out money to close the budget cap is setting us up for a bigger tax hike in two years. The Governor publically warned us that this was the wrong thing to do and he promised he would not do it. But then he went into the closed room and broke his word. What happens in two years when the Federal money is gone in two years?
terry paine
terry paine's picture
Last seen: 5 years 1 week ago
Joined: Feb 3 2009 - 7:26am
I think I can do a better job stimulating the economy if I was able to keep the 56% of the money take from me with force.

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