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Hunger Action joined with over 100 community, religious, education, health care, labor and human services organizations from throughout New York State to issue a joint statement endorsing alternatives to the cuts in essential services and the shifts to local property taxes and other regressive taxes and fees that the Governor has proposed.

"Moderate-income New Yorkers and small businesses can no longer afford to pick up the tax bill for wealthy individuals and multi-state companies. We need to put more money back into the pockets of working families since they are the ones who spend their wages locally, helping to build our local economies and communities. It's time to put an end to the era of tax cuts for the rich and service cuts and local tax hikes for the rest of us," said Bich Ha Pham, Executive Director of HANNYS.

"Going back to the 1972 state tax system would give 95% of New Yorkers a tax cut, while raising more than $7 billion to resolve our budget deficit, stop Pataki's cuts to health care and other vitial programs, and make a downpayment on education funding reform," added Mark Dunlea, Associate Director of HANNYS

The joint statement calls for a fair budget that invests in New York families. The speakers at the press conference emphasized that in closing the state's budget gap, New York's elected leaders must identify those spending reductions and revenue increases that do the least harm to the state's economy and to New York's working families.

According to Ron Deutsch, executive director of SENSES, "that means avoiding service cuts and tax increases that make it harder rather than easier for New Yorkers and small business owners who work hard and play by the rules to move up the socio-economic ladder."

The Coalition of organizations released a 7-point platform for restoring funding for critical programs and services:

o Make New York's tax system fairer and more equitable by increasing the top marginal tax rates on the highest income households. Can generate $2 to $7.7 billion in additional revenue depending on the plan adopted.

o Close Corporate loopholes that allow large, profitable multi-national corporations to avoid paying their fair share of state taxes - savings $1 billion.

o Stop sweetheart deals with high-priced consultants who are being overpaid to do jobs that state workers can do better and cheaper - savings $250 million.

o Lower drug prices for state and local governments by using New York's purchasing power to get a fair deal from the drug companies - savings $1 billion.

o End the abuse of the Empire Zones and other economic development programs and reform the operations of New York's Public Authorities - savings $290 million.

o Give back the nickels. Making the beverage bottling industry return unclaimed bottle deposits would generate $179 million.

o Make polluters pay for Governor Pataki's plan to cap global warming gases. Auctioning permits could generate up to $500 million.

Close Corporate Loopholes

A new study released last week by Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy (ITEP), reaffirmed the coalition's position that many profitable multinational firms are not paying their fair share of state corporate income taxes. The study looked at the 252 Fortune 500 companies that reported profits in all three of the years studied (2001, 2002 and 2003) and which disclosed their state and local corporate income tax payments in filings with the U.S. Securities and Exchange Commission.

Of these 252 corporations, 71 paid no state income taxes in one or more of the three years studied, and 17 had average effective state and local corporate income tax rates of 0% -- or less -- for the entire three-year period.

"Unfortunately, current SEC rules only require publicly-traded firms to disclose their state and local income tax payments on a 50-state aggregate basis, so we do not know how much these firms are paying to New York or any other state," said Frank Mauro, Executive Director of the Fiscal Policy Institute. "But we do know that the decline in state corporate income tax payments, both nationally and in New York, has been substantial."

"This study confirms what we have said for the last several years - that many large, profitable corporations are corporate tax deadbeats who are not paying their fair share of taxes to support the public services that they use and that all New Yorkers need," said Roger Benson, President of the Public Employees Federation. "Overall, most of the major corporations headquartered or doing significant business in New York paid less than 3% of their profits in corporate income taxes between 2001 and 2003. The rest of us pay about 3.7% of our income in state income taxes. Ordinary taxpayers and small businesses must play by the rules, and so should big business."

Companies doing business in New York that received a rebate on their state and local corporate income taxes during 2001 through 2003 include MetLife (a $21 million rebate in 2001 and 2002 despite over $4.9 billion in profits), A,T&T (a $269 million rebate in 2002 and 2003 despite $5.4 billion in profits), Eli Lilly (a $19 million rebate in 2002 and 2003 despite $3.4 billion in profits), and Toys "R" Us (a $30 million rebate in 2002 and 2003 despite $344 million in profits). Other companies operating in New York that paid no state and local corporate income taxes in at least one year covered by the study despite having billions in profits include Merrill Lynch, IBM, Pfizer, and Sears. These companies have not disclosed whether or not they paid any corporate income taxes to New York during those years.

Make New York's tax system fairer and more equitable - Make the rich and multistate corporations pay their share

The coalition also called into question the fairness of the state's tax structure as it applies to individuals and families. Because of New York State's heavy reliance on property and sales taxes, low- and middle-income families are currently paying between 11% and 12.6% of their income in state and local taxes, while the best-off families have a much lower average effective tax rate - - 6.46%. The speakers at the press conference highlighted an analysis by the Institute on Taxation and Economic Policy (ITEP) of the incidence (i.e., the impact by income groupings) of New York's state and local taxes that found that in 2002:

Ø The effective state and local tax rate for the best off one percent of New York families - with average incomes of $1.66 million - was 9.12% before accounting for the tax savings from federal itemized deductions, and 6.46% after taking this federal offset into consideration.

Ø And, the average effective tax rate on the poorest New York families - those earning less than $15,000 - was the highest of all: 12.67% before the federal offset and 12.63% after.

According to Robert McIntyre, ITEP's director, "New York's income tax fails to offset the regressivity of its sales and excise taxes, giving the state an unfair and regressive tax system. Taxes ought to be based on people's ability to pay them, which means that the share of income paid in taxes should rise as income grows, not fall as is the case in New York."

"We face a crisis in New York," said NYSUT Executive Vice President Alan B. Lubin. "The courts have mandated that New York make a stronger investment in education, but Albany doesn't know how to pay for that investment. One proposal would be to replace our current tax tables with the state's 1972 tax brackets adjusted for inflation. Under this proposal, 95 percent of all New York taxpayers would pay less than they do now, and the state would collect $7.7 billion more in revenue. By asking a little more from the wealthiest New Yorkers, we can pay for the CFE solution and give almost every New Yorker a tax cut."

Lubin noted that, with the adjusted 1972 tax brackets, a married couple with two children filing jointly and claiming the standard deduction would have to have an adjusted gross income of more than $240,000 in order to be subjected to a tax increase. Similar families with lower incomes would receive a tax cut. "That's a true sign of a progressive, fair income tax," said Lubin.

"Moderate-income New Yorkers and small businesses can no longer afford to pick up the tax bill for wealthy individuals and multi-state companies. We need to put more money back into the pockets of working families since they are the ones who spend their wages locally, helping to build our local economies and communities. It's time to put an end to the era of tax cuts for the rich and service cuts and local tax hikes for the rest of us," said Bich Ha Pham of HANNYS.

Overhaul Corporate Welfare, Starting with Empire Zones

The organizations also issued an 11- point plan to reform the state's Empire Zones Program.

They believed that the state law authorizing the Empire Zones program, which needs to reauthorized by March 31, 2005, should NOT be renewed without real reforms. "In its current form the Empire Zone Program has encouraged businesses to leave New York's urban areas to locate in undeveloped rural areas. This wastes state and local investments in infrastructure, wastes natural resources, wastes state tax dollars and hurts our cities," said John Stouffer, Legislative Director for the Sierra Club - Atlantic Chapter.

New York's Empire Zone Program used to focus on promoting job growth in economically distressed communities. It did so with a powerful combination of tax credits and tax breaks. In recent years though, the program has lost this focus. Now the powerful incentives of the program are used indiscriminately to promote projects in areas that are relatively well off, where rapid development is already occurring and, as in the case of the recent Luther Forest proposal in Saratoga County, are not in keeping with the types of development desired by community residents.

"The eleven reforms we are suggesting will create an empire zone program that helps rather than hurts New York's economically distressed communities and one that conserves our tax dollars as well as our natural resources," said Stouffer.

Lower drug prices for state and local governments

High Prescription Drug prices were also the target of the Coalitions focus. The Governor has proposed massive cuts to the state's Medicaid program that will dramatically impact low-income families across the state.

Danny Donohue, President of the Civil Service Employees Association (CSEA) urged the state to utilize its purchasing power to force lower prescription drug prices that could easily save NYS $1 billion or more per year. "New York is one of the world's largest purchasers of prescription drugs. It must be able to use this clout to drive down prices for all New York consumers."

New York State and its local governments could greatly reduce their expenditures on prescription drugs by combining their purchasing power to get lower prices. The Health Reform Program at Boston University's School of Public Health has estimated that New Yorkers would have saved $4.6 billion in 2004 if they had been able to purchase brand name prescription drugs at federal supply schedule prices.

Make polluters pay for Governor Pataki's plan to cap global warming gases

Marc Lapidus, Executive Director of New Yorkers for Fiscal Fairness, focused on Governor Pataki's plan to cap global warming gases. "There is a unique opportunity now to not only reduce pollution in NY but to also generate up to $500 million and help avoid some of the painful service cuts we have talked about. While we applaud the Governor's leadership in developing a system to cap global warming gases, now is not the time for another corporate handout - the state must sell these emission permits and not give them away to the power companies."

Stop sweetheart deals with high-priced consultants

Roger Benson, president of PEF also criticized the state's use of costly consultants to do work that state employees can do at half the cost, "Based on the findings of the NY Department of Transportation's own study the state could save over $123 million annually just by using more state engineers in DOT." When other state agencies' use of consultants is considered the State could save at least $250 million a year by requiring a cost benefit analysis before a state agency is allowed to let a contract for personal services.