ALBANY - Gov. David Paterson said Wednesday this is the “defining moment” to cut New York state government's notorious overspending, while the Assembly now says sales tax increases could be considered along with higher income taxes to escape from a deepening fiscal crisis.
Meanwhile, Senate Majority Leader Malcolm Smith is now aiming for about $2 billion more in spending cuts than Paterson.
The governor has said $11.2 billion in spending cuts are needed in the roughly $120 billion budget proposal before income taxes or other broad-based taxes should be increased.
Paterson said dealing with this crisis budget should change the way all budgets are handled in the future.
After an hourlong budget negotiation between Democratic and Republican leaders of the Senate and Assembly, Paterson warned the federal stimulus package being negotiated in Congress, and legislative proposals for income tax increases, shouldn't derail efforts to reverse years of overspending.
He criticized a “culture” in Albany that allows
covering revenue shortages with increased taxes, fees and one-time funds.
“This is how you balance a budget. This is how you get serious about a problem,” Paterson told reporters. “You have to stare it right in the face and say: It's going to have to be the alleviation of a lot of our spending, which is the only tool we should be using right now.”
Assembly Speaker Sheldon Silver, however, said the worsening fiscal crisis will likely require wealthier New Yorkers to pay a higher income tax rate at least temporarily, as they did for three years after the 9/11 terror attacks slammed New York's economy and Wall Street revenues. He said taxpayers with household incomes of $250,000 to more than $1 million now pay the same tax rate as moderate income New Yorkers. But Silver said wealthier residents probably won't suffer as much as lower income families from painful cuts in school aid and health care and the dozens of small tax increases he proposes on things like sugary sodas, motor vehicle fees and more.
He also noted there is no proof any millionaires left New York after the 2001 attacks because of the temporary income tax increase.
“We are going to have to make serious, deep cuts in programs and services that New Yorkers have come to depend on,” said Silver, a Manhattan Democrat. But he added: “We are not going to cut our way out of this crisis.”
Advocates for education helped make that case Wednesday. They released a study that said Paterson's proposed cuts to public schools, even after years of historic increases, would cost $15,000 per classroom in 64 percent of the state's 700 school districts.
“From the Southern Tier to the North Country and from Suffolk County to Rochester, school children will have their futures robbed if these education cuts are enacted,” said Billy Easton, director of the Alliance for Quality Education.
The crisis has lawmakers considering of an increase in the state's sales tax, which is now 4 percent. He said he is concerned that a sales tax increase hurts the poor most, but polls show some acceptance of it and “clearly everything is on the table.”
The Assembly's Democratic majority released its latest economic forecast Wednesday. It shows the state will face a deficit of more than $14 billion in the 2009-10 fiscal year beginning April 1. That's almost $1.2 billion more than Paterson projected in mid-December as Wall Street and other business sectors shed more jobs.
Smith, the Senate majority leader, said that means the Legislature must cut spending deeper, while tax increases must be a last resort.
“Clearly, this is an unprecedented time and we have to look at everything,” said Smith, a Queens Democrat. His budget forecast is expected next week.
Senate Republicans, in the chamber with a 32-30 Democratic edge, said taxes should be off the table.
“The Democrats in Albany just don't know when to stop increasing taxes,” said Senate Minority Leader Dean Skelos of Long Island. “Increased taxes, especially on sales and personal income, would further damage the economy, put more people out of work and take money away form families who are already struggling to make ends meet.”
One agreement emerged from Wednesday's closed-door budget negotiations: The budget won't be passed by Paterson's March 1 target.
Legislative leaders said the complexity of the worsening deficit and the uncertainty of federal stimulus aid that won't be final for weeks means the deadline for approving a budget on time has reverted to April 1. Paterson has said an early budget would save $1 billion.
The governor has said $11.2 billion in spending cuts are needed in the roughly $120 billion budget proposal before income taxes or other broad-based taxes should be increased.
Paterson said dealing with this crisis budget should change the way all budgets are handled in the future.
After an hourlong budget negotiation between Democratic and Republican leaders of the Senate and Assembly, Paterson warned the federal stimulus package being negotiated in Congress, and legislative proposals for income tax increases, shouldn't derail efforts to reverse years of overspending.
He criticized a “culture” in Albany that allows
covering revenue shortages with increased taxes, fees and one-time funds.
“This is how you balance a budget. This is how you get serious about a problem,” Paterson told reporters. “You have to stare it right in the face and say: It's going to have to be the alleviation of a lot of our spending, which is the only tool we should be using right now.”
Assembly Speaker Sheldon Silver, however, said the worsening fiscal crisis will likely require wealthier New Yorkers to pay a higher income tax rate at least temporarily, as they did for three years after the 9/11 terror attacks slammed New York's economy and Wall Street revenues. He said taxpayers with household incomes of $250,000 to more than $1 million now pay the same tax rate as moderate income New Yorkers. But Silver said wealthier residents probably won't suffer as much as lower income families from painful cuts in school aid and health care and the dozens of small tax increases he proposes on things like sugary sodas, motor vehicle fees and more.
He also noted there is no proof any millionaires left New York after the 2001 attacks because of the temporary income tax increase.
“We are going to have to make serious, deep cuts in programs and services that New Yorkers have come to depend on,” said Silver, a Manhattan Democrat. But he added: “We are not going to cut our way out of this crisis.”
Advocates for education helped make that case Wednesday. They released a study that said Paterson's proposed cuts to public schools, even after years of historic increases, would cost $15,000 per classroom in 64 percent of the state's 700 school districts.
“From the Southern Tier to the North Country and from Suffolk County to Rochester, school children will have their futures robbed if these education cuts are enacted,” said Billy Easton, director of the Alliance for Quality Education.
The crisis has lawmakers considering of an increase in the state's sales tax, which is now 4 percent. He said he is concerned that a sales tax increase hurts the poor most, but polls show some acceptance of it and “clearly everything is on the table.”
The Assembly's Democratic majority released its latest economic forecast Wednesday. It shows the state will face a deficit of more than $14 billion in the 2009-10 fiscal year beginning April 1. That's almost $1.2 billion more than Paterson projected in mid-December as Wall Street and other business sectors shed more jobs.
Smith, the Senate majority leader, said that means the Legislature must cut spending deeper, while tax increases must be a last resort.
“Clearly, this is an unprecedented time and we have to look at everything,” said Smith, a Queens Democrat. His budget forecast is expected next week.
Senate Republicans, in the chamber with a 32-30 Democratic edge, said taxes should be off the table.
“The Democrats in Albany just don't know when to stop increasing taxes,” said Senate Minority Leader Dean Skelos of Long Island. “Increased taxes, especially on sales and personal income, would further damage the economy, put more people out of work and take money away form families who are already struggling to make ends meet.”
One agreement emerged from Wednesday's closed-door budget negotiations: The budget won't be passed by Paterson's March 1 target.
Legislative leaders said the complexity of the worsening deficit and the uncertainty of federal stimulus aid that won't be final for weeks means the deadline for approving a budget on time has reverted to April 1. Paterson has said an early budget would save $1 billion.
Citizen
Hot Jobs
New! Off the Menu
The Citizens' Say
Post your comment - click hereThere are No comments posted.