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What Legislators Are Saying

State: Rich can take a hike - Albany's 3B plan still won't stop city layoffs (NY Daily News 4/17/03)

Pataki: No use discussing budget further right now (Newsday - 4/14/03)

Pataki's cuts are worse than taxes
By DAVID A. PATERSON

In his proposed budget for 2003-04, Gov. Pataki presents New York with this
equation: Taxes kill jobs. He is using this premise as cover to close a deficit with service cuts that will hurt working families for decades to come.

The notion that all tax increases kill jobs has been refuted by leading economists, including 2001 Nobel Prize winner Joseph Stiglitz and Peter Orszag of the Brookings Institution, who have shown that during a recession, service cuts are more harmful to an economy than broad-based tax increases.

There are taxes like the petroleum business tax and gross receipts tax that chase jobs out of New York. But a Manhattan Institute study on which Pataki bases his claim is flawed because it examined jobs and taxes in the city between 1989 and 1992, a time when taxes were already on the rise. Meanwhile, New Jersey and Connecticut saw job growth during the same period while raising taxes.

Unlike wealthy wage earners, a working family making $30,000 a year needs to spend every dollar to survive. Pataki's service cuts, including more than $1 billion from Medicaid, will cost New Yorkers tens of thousands of jobs and take real money out of the economy. It is disingenuous for him to say he is holding the line on taxes, since his service cuts will have the same impact on New York families as broad-based tax increases.

The governor's budget would cost a family living in the city with a $50,000 annual income and one child in a state college nearly $200 a month when you factor in tuition increases, cuts in the Tuition Assistance Program and a subway fare hike. And that doesn't include the plan to restore the sales tax on clothing.

A 35% tuition increase and tuition-assistance cuts would mean plummeting enrollment at the city and state universities, leaving tens of thousands of New Yorkers stuck in low-paying jobs. Pataki's $1.2 billion cut in local school aid, along with reductions in pre-K programs displacing 60,000 students, would force communities to choose between higher property taxes or lower standards in their schools. How can we fulfill Pataki's dream of building a high-tech economy with a second-rate education system?

Senate Democrats want a budget that is fair, one that shares the pain with sensible cuts in services. Our proposal has three components that will raise $4.1 billion in revenue: enacting a temporary income tax surcharge on New Yorkers earning more than $300,000 a year, closing a series of loopholes that let large, profitable companies avoid paying their state taxes and enforcing taxation on cigarette sales on Native American reservations.

There is a fourth step the state could take to save hundreds of millions: Join a multi-state consortium for purchasing prescription drugs directly from the manufacturers. There are those who say an income tax surcharge on wealthy New Yorkers will open class divisions and unfairly single out taxpayers already carrying more than their fair share of the tax burden. The facts refute that. The surcharge would be more than offset by the federal 2001 tax cut, which provides generous relief for wealthy New Yorkers. And the state's high property and sales taxes take disproportionately from low- and middle-income families (11% and 12.6%) than from wealthier families (6.4%).Pataki is right when he says New York stands at a crossroads. But most New Yorkers cannot afford to travel down the road his budget takes us, to a place where the dream of a college education is interrupted, where middle-class property owners are taxed out of their homes and where the average guy is asked to dig a little deeper in his pocket to pay for a subway ride or shoes for his kid.