NASSAU COUNTY CIVIC ASSOCIATION, INC. "The government is us, we are the government, you and I." Teddy Roosevelt

The Cuomo Plan; Tax and Spend a little less

Like father, like son

Today the New York Senate approved the Governor's plan to raise taxes in response to a mid year budget deficit. While pledging not to raise taxes when running for Governor, Andrew Cuomo did the political two step by cutting taxes for the middle class and limiting the reach to the hated MTA payroll tax while raising taxes for those who make over $300,000. Serious tax relief can only be accomplished by cutting state spending.

Cuomo's fiscal slight of hand is reminiscent of the old Albany. Would any rational person believe that there are no wasteful government run programs? Take for example Welfare. Former Governor Patterson increased welfare payments but did nothing to move New Yorker's off dependency. Governor Cuomo is advocating a plan to eliminate the state's anti-fraud effort of fingerprinting food stamp recipients. Even New York City Mayor Michael Bloomberg has acknowledged that the elimination of finger printing is a bad idea. Between twelve to fifteen hundred applicants each year are found to have engaged in fraud and were caught before any payments were issued saving taxpayers millions of dollars.

The Governor like his predecessors often reach for the clouds when searching for alternate revenue streams for state coffers. From the sale of state assets to federal aid, the key is whether the revenue is recurring and sustainable. A case in point is legalized gambling. The Governor is pledging New York's fiscal survival on the passage of a constitutional amendment to allow gambling. Yes, gambling can bring in additional revenue to the state, however the additional revenue is not infinite based on the total number of operating casinos in the tri-state area. At some point, the law of diminishing returns will kick in. Yet even when there is growth, the additional revenue is spent by Albany politicians. One has to look no further then the New York Lottery, often called the poor man's game of chance. Taxpayers were promised that the revenue would be dedicated to education which in turn would keep local property taxes low. So then, why is Nassau County the highest taxed county in America and why are half the thirty five highest taxed counties in America located in New York?

The key step is to cut spending. When  the average American household can no longer afford their bills, they look for ways to reduce their spending. If they decide to continue spending by charging their debt, they only dig themselves deeper into a fiscal hole. This scenario has played out millions of times over the last three years with Americans losing their homes. New York State government is no different. New York needs pension reform, repeal of the Triborough agreement, consolidation of public authorities, Medicaid reform and accountability in education.

What exactly has the Governor accomplished? His first budget was enacted on time, he reduced state spending by two percent, and negotiated savings in labor contracts. That's his job. What specifically did he do to change the dynamic of excessive taxation in New York State? Well the tax cap. While it was a step in the right direction, the law did nothing to alter the structural fiscal crisis facing New York. On Long island,  Newsday reported that one third of local governments voted to override the tax cap and increase taxes. School districts have yet to submit their budgetary plans. What legislative or executive accomplishment has actually reduced taxes? The answer, none. Its not a question of what the legislature passes, its the actual results that matter. 

The heavy lifting that must be accomplished is politically risky with the special interests of Albany, however the likelihood of tremendous electoral benefits are clear to those outside the Capitol. Unfortunately the safe bet for most politicians including the Governor is the talk of reform, superficial reform measures and kicking the can down the road instead of making tough economic decisions now. That's not leadership, its typical politics. Its time for the Governor to lay out his long term fiscal plan. By raising taxes and "capping" the two largest components of state spending, Medicaid and Education to 4% per year, New York will continue to sink into a sea of red. Like father, like son.