Remember that recent news story about all those state residents abandoning New York as if they were being chased by Martians in an H.G. Wells novel?
Well, the new state budget isn’t going to do anything to stem the stampede.
Filled with generous new expenditures like free SUNY tuition and middle class tax deductions for child care, piles of new fees (taxes), $1 billion more in education spending and overly optimistic revenue projections from expansion of the millionaire’s tax and continued federal aid, the executive budget proposed by Gov. Andrew Cuomo follows a remarkably similar approach to spending and taxation that has driven so many thousands of people to other states for so many years.
If New York is going to reverse the mass exodus, attract new businesses and welcome in a productive, high-quality workforce, then it’s going to have to claw its way out from the bottom of the national pile when it comes to its excessive government spending, high taxes, unfriendly business climate and oppressive regulatory structure.
The governor’s budget just offers more of the same.
And for the New Yorkers who aren’t planning to leave any time soon, that’s not a good sign.
It’s not unusual for the governor’s executive budget to read like a middle class letter to Santa Claus. And this year’s budget is no exception.
The state is facing a potential budget deficit of $3.5 billion this coming year.
So how does the governor plan to close it? By spending even more money, and offsetting it with even more taxes. Sound familiar?
We’ve already written about the free SUNY college tuition he’s proposing for New York families earning up to $125,000, criticizing the potential cost (at least $163 million a year) and the generous eligibility requirements. That says nothing about the potential impact such a gift would have on the state’s private schools and the economic benefits they provide to local communities.
The governor also is offering to double the child care tax credit for about 200,000 middle class parents.
But what about those struggling middle-classers who don’t have toddlers and who already are paying tuition and college loans for their older children? How will they benefit?
A modest income tax cut proposal would save the average middle class New Yorker about $250 a year in taxes. But while residents’ backs are turned cashing in their slightly bigger state tax return checks, the governor’s budget is reaching into their wallets for higher motor vehicle fees, expanded sales tax on internet purchases, a cap on STAR tax rebates, sin taxes on e-cigarettes, vapor products and cigars, removal of an investment tax credit for energy delivered in certain ways, and other taxes and fees.
The plan also contains expansion of the so-called millionaire’s tax, set to expire at the end of this year, which the governor hopes to use to pay for the leap in education spending.
The governor wants to keep it going (reneging on a state pledge to use it as a temporary budget stopgap); Senate Republicans want to eliminate it (returning a tax benefit to the rich); and Assembly Democrats want to increase it (raising taxes on successful people.) In the state that’s never seen a tax it doesn’t like, guess where this idea is going?
There are significant needs that the governor’s budget addresses, such as providing $2 billion to improve the state’s water infrastructure. The money would go to projects like replacing water and sewer pipes and wastewater treatment plants, developing clean-water sources and natural filters, and cutting the use of pollutants (road salt, fertilizers) to reduce contamination at the source. This is the kind of spending New York needs.
What we don’t hear much about is where the state plans to cut spending. We don’t hear much about what the state is going to do to reduce unfunded mandates that drive up local property taxes — usually the highest tax bill we all pay. We don’t hear ideas for reducing state government inefficiency and waste. (The governor likes to put the task on local governments, but not the state.) We don’t hear regulatory reform. We hear an increase in the minimum wage, but we don’t hear much about how the state is planning to help small businesses afford it.
What New York needs is a change in its approach to government spending and a commitment to reducing taxes and regulation.
This budget is a tired retelling of an old tale. Deja vu all over again.
At least the people who own moving companies will stay happy.