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Democrat and Chronicle
Groups urge higher tax on N.Y.'s rich
State needs plan that won't hit low, moderate earners hardest, activists say
By Yancey Roy - Gannett News Service

(January 24, 2003) — ALBANY — A lobbying alliance called on Gov. George Pataki and legislators Thursday to raise income taxes on New York’s biggest earners and end tax breaks for big corporations as a way to close the state’s $12 billion budget gap.

The focus should not be on cutting spending on schools or services to the poor and the disabled, said the coalition of education, welfare, church and AIDS/HIV activists.

Meanwhile, bonuses paid by Wall Street investment firms are expected to plunge 37 percent in 2002, state Comptroller Alan Hevesi reported. That means the state will lose about $300 million in income taxes on the bonuses in 2002. And Assembly Speaker Sheldon Silver, D-Manhattan, said giving up a portion of the state’s tobacco settlement to back new borrowing would likely be part of the budget deal this year.

Pataki, who will unveil his budget plan Wednesday, has said he will propose spending cuts. He has vowed to oppose “job-killing taxes” but has stopped short of ruling out tax increases altogether. His administration has floated the idea of delaying some payments, and the State University of New York Board of Trustees has suggested raising tuition 41 percent.

Those proposals would make just a dent in the budget gap. Activists oppose a strategy of cutting programs, especially education and health care.

“Let’s get off the mantra of ‘no new taxes’ and let’s talk about some new, smart taxes,” said Elie Ward of Statewide Youth Advocacy, a coalition member. Its agenda includes:

• Increasing income taxes about 1 percentage point on big earners, defined as individuals making more than $100,000 or couples making more than $200,000. That could raise about $3 billion.
  
• Ending some corporate tax breaks that cost state coffers about $1.5 billion annually. The proposal included a higher minimum tax on businesses.
  
• Asking the federal government for more money to recover from a sluggish economy and the Sept. 11, 2001, attacks.

Low- and moderate-income families will pay a disproportionate share of a SUNY tuition boost or other fee increases, the activists said, arguing that increases for big earners and big business would be the least damaging.

Business disagree. “Tax incentives are an essential part” of luring companies to New York, state Business Council spokesman Matthew Maguire said.