April 3, 2000
Citizens Budget Commission urges GRT reduction, spending restraint
The Citizens Budget Commission, a respected civic organization based in New York City, issued a report urging Governor Pataki and the Legislature to reduce the gross receipts tax and slow the growth in state spending.
"An exceptionally high tax on utility receipts is economically harmful because it raises energy costs for businesses and thereby puts firms in New York at a competitive disadvantage," said the CBC report, Recommendations for the New York State Budget For Fiscal Year 2001.
"In addition to its negative impact on competitiveness, the tax is regressive. Utility costs fall disproportionately on low-income households."
Senate Majority Leader Bruno, Governor Pataki, Assembly Minority Leader Faso and Assemblyman Schimminger have all proposed legislation to eliminate the GRT -- The Business Council's top tax priority this year.
On another issue, the report said: "A noteworthy effort was made to constrain State spending and reduce the State's workforce in the fiscal years from 1995 through 1997." However, it said, "since fiscal year 1998 expenditures have been growing at a rate well in excess of inflation and the number of State employees has risen." It called proposals for major spending increases this year "troubling" because they "cannot be sustained with recurring revenues."
CBC also called on the state's leaders to:
- Make "more prudent" use of this year's surplus by reducing debt, increasing reserves or funding one-time expenditures that would reduce future costs.
- Reject proposals to cut the gasoline tax.
- Revise the Health Care Reform Act of 2000 to reduce subsidies for institutions and curtail "lower priority initiatives" such as a subsidy for home-care workers.
- Emphasize greater productivity in state operations.
- Reform school aid to serve poorer districts and students more equitably.
- Initiate debt reforms that include "a firm and reasonable cap."
The report is available through the CBC website, http://www.cbcny.org.