AUBURN - How to create revenue and not raise taxes was an underlying theme as Assemblyman Gary Finch (Republican, Conservative) and Democrat Barbara Abbott King squared off in a debate for the 123rd Assembly District seat Thursday at Cayuga Community College.

King, a grass-roots agricultural producer, with little legislative experience, took shots at businessman Finch's eight-year record in the Assembly. In 2006, King lost to Finch.

“I will work very hard and creatively to represent all of the citizens,” King said. “Tax dollars should be spent carefully to preserve human dignity, social justice, economic consumption, and to protect resources.”

“The revenue that New York had anticipated isn't going to be there,” Finch said.

But he believed spending issues ignored by the state would be addressed, such as unclaimed sales tax from American Indian businesses and zero-based budgeting.

King said the state would have to pressure Native Americans selling gasoline and cigarettes.

Finch wants American Indian businesses to pay their share of sales tax when they sell to non-American Indians.

“No one knows how much money is being lost,” he said. “Probably $300 million to half a billion dollars or more in uncollected sales tax.”

Finch said average New Yorkers recognize the impact on a $122 billion state budget with 44,000 jobs lost on Wall Street.

“We have to find revenue without raising taxes,” he said. “Things would get much worse if taxes were raised in this climate.”

He said legislators should decide what can be cut, going after $4.5 billion in Medicaid fraud and establishing a zero-based budget. Unspent member-item appropriations must be taken off the table.

“The most important thing after keeping our citizens safe is to educate our children,” he said. “We should not cut education, but I have a feeling that everything is going to be on the table.”

King disagreed, she said the governor wouldn't cut education or pass costs down to school districts.

“We can't allow our lower governments to foot the bill,” she said, “and we can't afford to cut services.”

King and Finch differed on the circuit-breaker tax but agreed that raising taxes on millionaires is unfair. King would vote for circuit breakers, which tie income to property taxes.

Finch supported the circuit-breaker and the Senate's tax cap, but warned of “falsely created ceilings,” whether circuit-breakers or tax caps, which would eventually burst.

“We need a new formula, a circuit-breaker,” King said. “We need to have a lower tax rate.”

As for how well the Department of Environmental Conservation regulates farms to protect the lake system, King said agriculture was an unregulated area and criticized the DEC's CAFO system for creating division and singling out producers.

“We have great erosion,” she said, with rainy seasons and ruts left by tractors during forage harvesting.

“I don't think it's a good system,” she said.

Finch acknowledged the runoff issue.

“Agriculture is a large business in this state and the largest business in this district,” he said.

He favors subsidies for dairy farmers. When farmers got a $60 million subsidy, “the price of milk had fallen through the floor. Two years ago, it was costing farmers more to feed their cows than the price of milk,” he said.

King dislikes subsidies. She said farmers got $30 million, while Cornell got $30 million for research. Subsidies, based on volume, benefitted bigger dairies.

“It was a wonderful measure,” she said, “but it was a one-shot deal - nothing to base a business on.”

She prefers strengthening markets with state funds through a bill first.

Finch favors economic development tax breaks.

“Job creation and economic development issues are very important, on the table as number one,” Finch said.

He noted that Advanced Micro Devices, Inc., which ended up in the Albany area with a potential for 3,000 jobs, looked at a site in Auburn, but Auburn couldn't deliver the $1.2 million subsidy.

He cited the Blueprint I initiative here, as a model for the kind of financing from the private sector plugged into local government that is needed.

King said these subsidies are not working. She suggested the state create credit programs to advance credit and guaranteed loans through a banking system to companies.

“My opponent has sat on these committees,” King said, “but the fact is that we don't have new industry here. He hasn't done the groundwork.”

Staff writer Kathleen Barran can be reached at 253-5311 ext. 238 or kathleen.barran@lee.net