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May 5, 2003

Governor: Will review budget plan 'line by line' to determine whether and what to veto

The administration of Governor George Pataki will review the new $93 billion legislative budget plan and tax increase line by line to determine whether and what to veto, the Governor said Friday. He said that some parts of the budget are unconstitutional.

When he might act, and whether he would veto the whole budget bill or only line items, will await a review of the bill, he said.

"Not only is this structurally unbalanced, it is the largest tax increase by far in the history of this state, and much of it has also been done unconstitutionally," the Governor told reporters. "So we literally have to go through thousands of pages line by line."

The Governor declined to comment on a "conceptual agreement" between the legislative leaders and New York City Mayor Michael Bloomberg, saying he'd wait to see specifics. But he expressed concern that the plan would raise the city's personal income taxes and sales taxes enough to make possible an extra $1 billion in aid.

The bill may be unconstitutional, the Governor said, because it removes certain language and adds in "illegal substitutions." He said: "We had this fight in 2001 and the courts have said yes, we were right and they were unconstitutional actions. But they've gone and done it again."

The Governor continued his sharp criticism of the budget. He said that it raises spending by some $2.8 billion, includes the largest tax increase in state history, and is out of balance.

The state Legislature Friday finished authorizing a $92.8 billion budget. The bill includes a three-year, 10 percent surcharge on personal incomes for married couples filing jointly with taxable income over $150,000 and for single filers making over $100,000. The legislative plan would also increase the state sales tax from 4 to 4.25 percent.

The budget would also seek new revenues from new video lottery terminals at racetracks, tax collections from Native American retailers, and new Sunday hours at liquor stores.

The day before the Legislature finalized its plan, the state Division of the Budget (DOB) issued a report blasting the plan. The DOB report said the plan would impose the largest tax increase in state history, $3.3 billion, and that the increase would kill more than 100,000 jobs statewide over two years.

Specifically, the DOB report said the legislative plan would: add nearly $4 billion in state spending in all funds; create a $1.5 billion current-year shortfall; increase the state's out-year budget gaps over the next two years to $13 billion; enact the largest tax increase in state history which would kill more than 100,000 jobs; and cause a wide range of programmatic disruptions.