1/28/10: Budget Analysis: Spending, Taxes Outweighs Benefits

While headlines on New York's proposed Executive Budget have pointed out some positive steps andmodest spending cuts, an analysis of the budget by Unshackle Upstate finds the budget falls way short of the real reform needed to safeguard New York's fiscal future.

Among Unshackle Upstate's concerns:

• $2 billion in new spending.
• $1.4 billion in new taxes and fees, including a $240.2 million additional assessment on hospital, nursing home and home care services.

"The budget does include important economic development initiatives and several cuts and savings measures, including agency consolidations, facility closures, and long overdue mandate relief," said Brian Sampson, executive director of the pro-business and pro-taxpayer coalition. "However, the increased spending and new taxes and fee will ultimately cancel out any good because the financial burden is simply too much for taxpayers in New York state to sustain."

The 2010-11 Executive Budget reflects an effort to hold spending "flat," which Unshackle Upstate believes is not enough. State spending has increased a staggering 12-percent over the past two years.

In the past decade alone, lawmakers have allowed the state budget to grow by $60 billion. While this budget attempts to address the current deficit, New York still faces an even uglier budget deficit that could grow to more than $50 billion in three years unless the governor and Legislature begin making significant, yet necessary, cuts. Adding to an already complicated issue, New York's debt level also continues to rise. According to the state comptroller, debt increased from $39 billion in 2002-03 to $51 billion in 2006-07and could rise to $63.7 billion in 2011-12.

Unshackle Upstate is calling on the governor and the Legislature - as it works through this budget process - to aggressively seek ways to cut spending and bring this budget in line, just as taxpayers must do in their own households when money is tight. The governor and Legislature must reduce debt and adopt massive statewide fiscal reform.

To further that goal, the coalition continues to offer solutions, proposing a five-year plan to right-size the budget to a more sustainable $109 billion by 2015. This initiative proposes returning the state budget to the level it was in 2000 - $77.5 billion - and then be adjusted according to the consumer price index to reach $109 billion. To get the process started, the coalition is developing a list of more than $12 billion in proposed cuts to the 2010-11 budget, a plan Unshackle Upstate expects to release soon.

"It remains unclear to many of us whether this elected body understands the financial realities facing New York state and, more importantly, its residents," Sampson said. "But what is abundantly clear is that taxpayers have had enough, and they intend to hold elected officials accountable. Their message to the Legislature: Reject the notion of raising taxes and spending of any kind, and start exercising some cost-cutting discipline."

The subject of real reform simply must be part of the conversation, Sampson said. To help taxpayers, New York's largest special interest group, get that message across, Unshackle Upstate has created the Unshackle Army on Facebook, a place where citizens can voice their concerns and have them carried to Albany. The "Army" will continue to protest New York's high taxes and costs of doing business, with a goal of making sure that those seeking election in November have a clear sense of voter sentiment.

"This is a monumental year in New York politics, with the governor running for election and all 212 members of the Legislature seeking re-election," said Sampson. "Our elected officials should know that the public is watching them and grading them, and there could be ramifications for any elected official who supports increased taxes and spending."