State of the State

January 6, 1999

Governor: New York's comeback is begun but not done
His State of the State emphasizes restraint; he calls for budget growth below inflation

Saying that New York's economic comeback of the last four years is begun but not done, Governor Pataki today urged new actions to sustain the state's recovery. In his annual State of the State address today, the Governor emphasized fiscal restraint and advanced some proposals to enhance New York's comeback. For example, he said New York State should invest a projected $1 billion surplus this year in a reserve fund to sustain tax cuts already enacted.

He also said he would propose a budget for 1999 that would keep spending increases below the rate of inflation.

"When we met here four years ago, New York was in a period of crisis. Our economy was failing. Our people were bleak in spirit. New York had fallen from the mantle of national leadership that is its legacy, and its destiny," the Governor said.

"Today, New York's future is bright with hope. But our renewal marks a beginning, not an end."

"We must take bold steps to ensure that this government continues to live within its means."

"New York's surplus doesn't belong to government, because it wasn't earned by government," he said. "It was earned by the men and women who work for a living and pay their taxes.

"By putting the people's money in a safe place where it can't be touched, we're taking the prudent step of guaranteeing that it gets returned to the taxpayers."

The Governor also proposed:

"We're pleased that Governor Pataki is emphasizing spending restraint as a key part of the effort to sustain and accelerate our comeback," said Business Council President Daniel B. Walsh.

He added that business agrees with Senate Majority Leader Joseph Bruno that further tax cuts can further enhance New York's economic renaissance.

Senator Bruno's proposals would save taxpayers $795 million a year. The package includes key elements of The Business Council's agenda for making New York's business taxes competitive, including: Reducing the tax rates on banks and insurance companies from 9 to 7.5 percent; cutting the gross receipts tax on utility customers' bills; and averting unlegislated tax increases on energy utilities created by utility restructuring.

The Governor cited tax cuts, workers' compensation reform, regulatory reform and the introduction of competition to power markets as key factors in the state's economic recovery.

"In just four years, we've cut taxes 36 times, saving New Yorkers over $19 billion dollars," Governor Pataki said. "We've cut income taxes on New York's working families, not once but three times.

"And the result has been a strong economy that continues to grow stronger, because our people have more freedom to save, spend and invest."

He said that these tax cuts, and the elimination of some 1,000 regulations, had contributed to the creation of 400,000 new private-sector jobs in the last four years.

In his State of the State message, Governor Pataki also proposed:

"With these and other initiatives, we will recommit ourselves to making New York the place where people from around the world come to gaze in wonder," Governor Pataki said.

"And in the process we will reinvigorate our tourism industry, create new jobs, revitalize mass transit, and build on our state's unprecedented economic renewal," he added.

The Governor's State of the State address advanced several initiatives related to criminal justice. He proposed: