What's New

Zack Hutchins
Director of Communications

April 15, 1999 

Council urges lawmakers to restrain spending or risk return of 'disaster years'
New report, bulletin remind lawmakers of damage from spending spree 10 years ago

The Business Council has launched a new campaign to remind lawmakers that drastic increases in state government spending would imperil New York's economy.

In a briefing paper released April 8, The Council warned that an unaffordable increase in state spending this year could lead to "the return of the disaster years" like those that brought huge tax increases and drastic funding cutbacks throughout the early 1990s.

For five straight years starting a decade ago, state leaders enacted tax increases of $1 billion or more annually, hitting both businesses and individuals, the paper noted.

Those tax increases were "significant contributors" to New York State's loss of more than 500,000 jobs during that period, The Council said.

The tax increases stemmed from uncontrolled spending-starting in a year, like this year, when the spending lobby thought there was a huge surplus to spend, the paper said.

Besides tax increases, the fiscal crisis created by too-high spending resulted in education aid cutbacks in the middle of the school year, sharp reductions in state employment, SUNY and CUNY tuition increases, "lagged" pay for state workers, lowering of the state's credit rating and other problems.

"What happens to all the money state government spends now?" The Council asked. In New York, school spending totals nearly $10,000 per student, 50 percent above the national average.

The paper also noted that New York's Medicaid spending "is the highest in the nation by far-on a per-capita basis, 58 percent above the second-highest state."

The briefing paper says that, a decade ago, huge spending increases "turned out to be a big mistake." It concludes: "Let's not make that mistake again."

The Council also introduced a new bulletin, Spending Watch, that will focus on issues related to New York's budget, spending levels in the budget, and advocacy by various groups that would affect spending.

The one-page bulletin will be faxed periodically to elected officials, legislative staff, news media, and others around the state.

The first issue was released April 12 under the headline Surplus? What surplus? It noted that "the tax-and-spend crowd" in Albany has been urging more spending on hospitals and schools, even though New York's spending on both areas is far above national averages.

"An above-inflation spending binge would endanger scheduled tax cuts, increase our debt, invite a lower credit rating, and raise the specter of a return to the disaster years that started a decade ago," Spending Watch concluded. "That's far too great a cost."

The briefing paper and Spending Watch are the latest steps in an ongoing effort by The Business Council to call attention to the need for spending restraint in this year's budget.

Click here for The Council's release, the briefing paper, and the first issue of Spending Watch.