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Groups want wealthy to pay more taxes
By SHIRIN PARSAVAND
Gazette Reporter

ALBANY - Cutting back on education, health care and other government services could do more damage to the economy than raising state taxes, a coalition of human service groups said Thursday in urging an income tax increase for the wealthy.
The coalition of 200 groups is calling for alternatives to cuts in state spending to deal with a $12 billion state budget gap.
The groups, which include the New York State Community of Churches, the Schuyler Center for Analysis and Advocacy and the Retired Public Employees Association, hope to persuade Gov. George Pataki to reverse his stance against raising taxes when he releases his 2003-04 budget proposal Wednesday.
"New York is in a terrible budget situation and there will have to be some shared sacrifice, but our key word is shared sacrifice, which means we all have to contribute to making this better," said Elie Ward of Statewide Youth Advocates. She said cutting state funding shifts costs to local governments, which then raise property and sales taxes.
"The burden must be shared. It cannot be borne disproportionately by those who have the most need - the poor, the elderly, the disabled, children in day care, children in our schools," said the Rev. Vernon A. Victorson, pastor of First Lutheran Church in Albany.
The coalition is advocating a temporary tax surcharge on the portion of family incomes above $100,000.
Depending on the size of the surcharge, the increase could raise as much as $3 billion without forcing those affected to pay higher income taxes overall, the coalition argues.
The federal income tax cut of 2001 that is being phased in gradually creates "tax room" for states to raise their own taxes, said Robert Plattner, a tax lawyer and member of the board of the Schuyler Center for Analysis and Advocacy.
A "statement of support" signed by the groups also calls for closing corporate tax loopholes and seeking money from the federal government to help the state recover from the recession and Sept. 11.
Frank Mauro, executive director of the labor-backed Fiscal Policy Institute, said government service cuts and tax increases both can damage the economy. But service cuts can be worse because of the direct reduction in spending, he said.
The state made deep spending cuts to close a $5 billion deficit when Pataki took office in 1995.
Mauro said those cuts were not what led to an improvement in the state's economy. Rather, he said, an economic recovery was already under way.
But the Business Council of New York State disagrees, saying that spending cuts and tax cuts were what helped the state out of its fiscal problems nearly a decade ago.
"Albany does not have a revenue problem. Albany has a spending problem and to deal with the current fiscal crisis, Albany must focus on spending," said Matthew Maguire, a spokesman for the Business Council.
Contact Shirin Parsavand at 462-2499 or shirin@dailygazette.com.