Cut or Tax? New Yorkers Weigh In

Renewed Commuter Tax Gaining Support

While fingers are pointing and memos flying between the leaders in Albany, New Yorkers are having their say about how they want the giant budget crisis solved -- and it makes no sense.

In a new Sienna poll released this morning, 75 percent of New Yorkers prefer cuts to taxes or borrowing as the solution to the state's growing budget gap ($1.5 billion for the rest of this year and $12.5 billion next year.)

When asked what they think ought to be cut, Sienna got some truly spectacular answers: 23 percent said cut aid to local governments, failing to recognize that would almost certainly mean much higher local taxes to make up the difference; 18 percent said cut transportation; 7 percent said education; and 6 percent said health care. The only problem with this is education and health care spending account for well more than half the entire state budget while eliminating all spending on local aid and transportation would save less than $2 billion.

Here's the best part. The number one answer on what to cut was "something else." Something else. Like what? If the entire state government shut down (police, prisons, welfare, courts, etc) that still would not close the budget gap.
So maybe you'd reconsider tax hikes?

Certainly many Democrats in Albany and nearly every interest group and union thinks some form of a tax hike needs to be part of the solution.

Now Mayor Bloomberg is finding a more receptive audience to his long-held belief that the commuter tax ought to be restored.
That levy on commuters from New Jersey, Connecticut, and suburban New York disappeared several years when Assembly Speaker Sheldon Silver agreed to end the tax hoping it would help get some suburban Democratic candidates elected. It didn't but the city lost a steady revenue source in the $300 million/year range.

Now Silver says he'd consider reinstating the tax.

He and his allies also want a millionaire's tax -- a surcharge on people earning more than a million bucks a year (or less in some proposals.) Governor Paterson has said he opposes that idea because it would drive high income taxpayers out of New York but a recent study out of Princeton University suggests that's might not be the case.

The study released in September, looked at New Jersey's experience with a tax surcharge of 2.6% on "half-millionaires" (those making $500k or more) and found that instead of driving rich folks out of the Garden State, New Jersey gained half-millionaires.

Of course that happened during a period of rapid and amazing economic expansion. Would the impact be different in the midst of a very bad recession? Paterson's people say he doesn't want to find out.

In the meantime, Tuesday's special emergency economic session of the Legislature looks very unlikely to produce anything as of now.

The lame-duck Republican Senate leader Dean Skelos said this morning he wouldn't bring his body into session until he actually saw budget bills that outlined how the governor proposed to cut $2 billion right away.

Paterson shot back in a conference call with reporters, "this is a total farce you're being fed" insisting the draft bills were sent around last week and that the budget division had held roughly 50 meetings with lawmakers. Then his office sent out a letter to Skelos and his people:

"Last Wednesday, November 12, Governor Paterson released a detailed $2 billion savings proposal for your consideration at the November 18 special session. On November 13, we delivered a complete and full set of all bill copy to provide you with language on every single item in Governor Paterson’s savings plan. Since that day, our staff has conducted nearly 50 detailed briefings on the Governor’s proposals with your staffs to provide a complete review of the bill language, to respond to any questions, and to provide any related cost or data information, which was requested. This is the same process that we used for our successful August special session. Enclosed you will find an additional copy of the full set of bill copy for you to review and consider. We remain available to discuss any questions. Additionally, as always, we will consider any alternative proposals or savings ideas you may have. We look forward to working together in cooperation to facilitate a consensus agreement that will bring our budget back into balance."

That pretty much counts as a SNAP! in the world of Albany political bickering.

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