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February 26, 2008

Nothing Changes

High taxes forever in our future

With a politically disastrous first year involving a scandal surrounding the use of state agencies to target political opponents and the plan to grant driver licenses to illegal aliens, one would expect the Governor to now deliver on his promise of reform. Its no secret that New York State is in a fiscal crisis. With a long history of unrestrained spending growth and high levels of government debt, New York has become the tax capitol of America. As one of the original colonies which battled a king, who would ever believe that history would repeat itself. The Governor's proposed state budget is ample proof.   

Last year the Governor raised state spending by more then 11%. This year with a projected budget deficit of 4.4 billion (which may go higher), he has proposed a spending increase of 5%. How can it be fiscally prudent to increase spending in light of the current circumstance? His answer; 1.9 billion in tax increases (the budget makes reference to fee increases) on such items as auto insurance, driver licenses, mortgage recording, medical insurance and collecting tax on internet purchases. His budget actually includes a proposal to "help relieve pressure on property taxes" which is referred to as Local Revenue Flexibility. The premise that it would relieve local property taxes by authorizing other taxes is ridiculous. This proposal would authorize counties to increase mortgage recording fees, collect taxes on cellular phones and provide limited authorization for red light cameras. These other taxes will impact the very taxpayers he is claiming to help.    

In an effort to create new sources of revenue to fund current state spending, the governor has proposed a scheme to sell off future lottery revenues in exchange for cash payments from private investors. This scheme is risky and reckless. What happens if revenue projections fall below plan and if this scheme leads to excessive spending for today? Looking at his budget, it appears that this is the case. Maybe he should just spend within our means.

His plan to increase the number of children covered with health insurance is disingenuous as it covers children well above the poverty level who would never qualify under the current federal SCHIP program. The Governor's plan would cover families with an annual income of $80,000 (four times the poverty rate) even if they have medical coverage through their employer. The intent of the program was to cover poor children. If the Governor was so concerned about the uninsured, he would stop providing chemotherapy for illegal aliens. Both of these costs will be borne by taxpayers.

Instead of addressing out of control school taxes, the Governor has appointed a commission to study tax caps. This issue has been discussed for the last 10 years since 1997 when the STAR program was first enacted. The flaw of the STAR program was the failure to include tax caps. When districts receive large increases in state aid, most do what government does best, they spend it. Regardless of the funding mechanism, the money comes from the taxpayer. His budget plan has no increase for the basic STAR rebate which will put further pressure on the middle class who are bearing the burden of excessive taxes.

His idea to cut all compensation to the special districts sounds wonderful, however he should be consistent and remind Tom Suozzi that his 60% pay raise was unwarranted as well. How about addressing all of the state authorities that generate excessive debt which violate the spirit of the state's constitution by bypassing New York voters who must approve state debt?

As to the idea of merging the sanitation districts, the time has come for the towns to assume this responsibility. This issue must be addressed by the three towns and does not appear to be a state issue. Savings will come from the consolidation of administration costs. 

The time has come for every voter in New York to pay attention to how politicians vote versus what they say. If not, high taxes will be forever in our future.