NYS revenues still strong — a positive trend for more tax cuts

Despite claims by some critics that recent turbulence on Wall Street might dry up revenues for state government, tax collections in Albany remain strong, according to Governor George Pataki's Budget Division and Comptroller H. Carl McCall.

That's good news for the business community, which is asking state leaders to enact further tax cuts in the coming legislative session.

"Year-to-date General Fund receipt and disbursement estimates continue to demonstrate that the State's Financial Plan for 1998-99 remains soundly balanced," the Budget Division said in its annual mid-year update to the Financial Plan.

The division now estimates the state's 1998-99 fiscal year will end with a surplus of $1.04 billion, up slightly from its July estimate, in addition to some $500 million in reserve funds.

The better-than-expected picture is based largely on tax revenues coming in higher than earlier projected.

"Compared with the July forecast, the Division of the Budget's current employment, income and wage outlook is slightly higher for 1998," the update says.

"Both private and overall employment growth rates will likely hit ten-year highs."

Comptroller McCall, interviewed this week on WROW-AM in Albany, said the drop in stock prices this summer and early fall-much of which has been regained in recent weeks-has left "no major impact on the economy in a negative way."

"It really has not slowed down our revenues," the Comptroller said. "In fact, we're ahead of forecast."

News of continuing strong revenue flows came as The Business Council was stepping up its efforts to develop new ideas for tax cuts and improvements to the tax code.

The Business Council has asked Governor Pataki and legislative leaders to build on this year's business tax cuts by extending tax-rate reduction to the banking and insurance industries; repealing new, unlegislated tax increases on utilities; enacting further reductions in the gross receipts tax, petroleum business tax and truck mileage tax; and making other reforms.

In recent weeks, The Council has asked many members for specific ideas on what taxes should be reduced and what comprehensive reforms can be made to the state's tax code.

Requests for ideas have been sent to many Council members, including large and smaller employers, manufacturers and employers represented on The Business Council's Tax Committee and Government Affairs Council.

This outreach is continuing, and Council members interested in suggesting tax cuts or tax code reforms are urged to send their suggestions to Ed Reinfurt, Business Council vice president, via fax at 518/465-4389.

November 12, 1998