State Budget

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Partnership News - "New York's Budget"

April 6, 2007

There's a lot not to like in New York State's newest budget.  There's even more not to like about how it was put together.

More distressing than the budget's staggering total (nearly $121 billion), is that promises of a transparent process weren't realized, and that the "three men in a room," secretive culture continued in 2007, despite commitments to act otherwise.

Worse than predictions by the Citizens Budget Commission that the state will have a budget shortfall of $4.5 billion in just 18 months, is that the legislature seemed more concerned with bringing Governor Spitzer's aggressive posture and reformer mantra "down a notch or two," than with doing what was financially prudent.

More depressing than the restoration of $350 million in proposed health-care reductions, or that school aid is funneling downstate in many cases not because of need, but because of horse trading, is that these decisions seem influenced not by what's best for the public, but by mean spirited ad campaigns and lawmaker barbs and bravado.

And even though none is this is anything we haven't seen before -- it is, after all, just another case of the business that's unfortunately become far too usual - I believe it is more gut wrenching this year because taxpayers collectively hoped - and believed - things might be different this year.

But, alas, they weren't.

On our Unshackle Upstate priority items, the budget passed with $1 billion in Medicaid savings (not nearly enough, but a start), and no action taken on Wicks Law, which requires municipal projects of $50,000 or more (so, nearly all of them) to be completed by multiple contractors, which drives costs up for taxpayers by 20%-30%.  (The governor's original budget proposed raising the Wicks threshold in Upstate to $1 million - again, not enough, but a start).

Even if you've already sent an email to Albany via UnshackleUpstate.com, I hope you'll click here again, and send a message that Wicks Law can - and must - be dealt with outside of the budget process, and be reformed before the end of the session (there's a template email of support for Unshackle Upstate's reform agenda already up on the site.  Sending an email will only take a minute or two - an easy way to have your voice heard).

The final state budget also included approximately $450 million generated via so-called "loophole closers" - items that in reality are just additional taxes on business (Spitzer's original plan called for $600 million).

Some good news:  the Article 9-A corporate tax rate, primary tax rates on banks and insurance companies, the general tax rate on an estimated 3,400 manufacturing corporations, and companies that pay corporate tax under the state's alternative minimum tax will see some modest reductions this year.

But in the face of an ugly budget process, it's not all that much to be happy about.

That's why we're continuing to advocate aggressively (with our 50+ Unshackle Upstate partners) for other ways to make our state a better (less expensive) place in which to do business.  We're fighting for: a reduced taxpayer burden through the reform of Medicaid, the Taylor Law and Wicks Law; less expensive workers' comp, insurance (through reform of the Scaffold Law) and energy (by making more low cost hydropower available for economic development - including retention and capital investment, not job creation alone); and a retooling of economic development programs so that more business investment is their objective.

Sincerely,

Andrew J. Rudnick
President & CEO