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For Release — July 16, 2002

WALSH ASKS AFL-CIO PRESIDENT TO 'SAY IT AIN'T SO' ON TAX INCREASES FOR WORKING NEW YORKERS

ALBANY—Working New Yorkers have the most to lose if state leaders follow the advice of New York State AFL-CIO President Denis Hughes and raise taxes, Business Council President Daniel B. Walsh said in a letter delivered to the statewide labor leader today.

"Please say it ain't so," Walsh wrote to Hughes. "Please tell the world that the AFL-CIO is not asking Governor Pataki and the Legislature to return to the days when New York leaders raised taxes and drove jobs out of the Empire State."

Hughes told the New York Post earlier this week that state leaders "will have to do something next year to increase revenues" because of a potentially large budget gap in the 2003-04 fiscal year. One possibility, he suggested, would be to raise the state income tax. Although Governor Pataki and the Legislature reduced New York's income tax rates from 1995 through 1997, the state's personal income tax burden remains among the highest in the nation, second only to Massachusetts. Nine states, including Texas, Florida, Washington, Tennessee and New Hampshire, collect little or no income tax. Other union representatives in New York called earlier this year for raising business taxes to provide revenue for higher state spending.

In his letter, Walsh reminded the labor leader that, when state leaders raised taxes during the recession of the early 1990s, "thousands upon thousands of AFL-CIO members lost their jobs." Employment in manufacturing and construction, two of the most heavily unionized sectors outside government, were hit especially hard, he said.

However, Walsh said, that changed dramatically after Governor Pataki and the Legislature began reducing taxes in the mid-1990s: "Thanks to the tax cuts and other pro-growth policies of the last eight years, our economy -- that is to say, the well-being of our working families -- rebounded dramatically." New tax increases would reverse that progress, he said.

The text of Daniel B. Walsh's letter to New York State AFL-CIO President Denis Hughes follows:

Dear Denis:
RE: Higher taxes on working New Yorkers?

Please say it ain't so.

Please tell the world that the AFL-CIO is not asking Governor Pataki and the Legislature to return to the days when New York leaders raised taxes and drove jobs out of the Empire State.

I know you are aware that, the last time Albany followed that advice, thousands upon thousands of AFL-CIO members lost their jobs. All told, more than half a million jobs disappeared from New York from mid-1990 to early 1993. Employment in manufacturing and construction – two of the most heavily unionized private-sector industries – plummeted by more than 150,000 and 65,000, respectively. Even jobs provided or supported by state and local governments, the major source of new membership for the AFL-CIO, were affected.

Thanks to the tax cuts and other pro-growth policies of the last eight years, our economy – that is to say, the well-being of our working families – rebounded dramatically. Construction alone added 80,000 jobs, an increase of almost one-third, from December 1994 to December 2001. Our share of the nation's manufacturing employment has improved, as well. The economic growth created by progressive state policies led, in turn, to higher tax revenues which paid for huge increases in taxpayer support for health care and education.

Now, all of our progress is under threat. Just as New Jersey is now discovering, tax increases make it harder for businesses to compete and provide jobs. New York's tax burden is already highest or second-highest in the nation, depending on the measurement. We simply cannot afford to add to that burden, especially when employers here also must pay more in workers' compensation, energy, and other costs than their competitors in other states.

Governor Pataki, Senator Bruno, Speaker Silver and their colleagues in the Legislature have set the Empire State on a new path – one that recognizes the competitive cost of raising taxes and the competitive advantage of cutting them. For the sake of all working New Yorkers, including the members of the AFL-CIO, we must stay that course.

Sincerely,

Daniel B. Walsh