What's New

Zack Hutchins
Director of Communications

May 14, 2003

Legislature overrides Governor's vetoes
Governor had tried to block higher income, sales taxes, and to line out $1.3 billion in spending

The Legislature overrode Governor George Pataki's vetoes to impose the first increases in state personal-income and sales taxes in three decades, along with targeted increases in business taxes.

Despite multi-million-dollar lobbying campaigns by public-employee unions, however, The Business Council was successful in persuading legislators not to adopt the "New Jersey plan" of major, across-the-board corporate tax increases.

The enacted tax package, which Governor Pataki described as "the largest tax increase in state history," includes:

All 62 Republican and Democratic members of the Senate voted in favor of the tax increases May 15, as did 104 of the 150 members of the Assembly. The Constitution requires two-thirds votes in each house to override gubernatorial vetoes. The override votes mean that higher taxes are now law. Governor Pataki has said, though, that the Legislature's action on the tax bill was unconstitutional, leaving open the possibility of legal challenge.

The Legislature's budget does not include a $20 million increase in hazardous waste and petroleum fees that had been included in the Executive Budget.

The Governor has said the legislative plan would create a two-year "out-year" budget gap of $13 billion. Legislative leaders have not released estimates of the future impact of the new budget.

Earlier in the week, Governor Pataki lamented the lack of structural cost-saving reforms in the Legislature's budget. Unlike the Executive Budget, the plan approved by the Senate and Assembly includes no reform of Medicaid; the Wicks law, which drives up public construction costs; or tort laws that cost New York City and other local governments hundreds of millions of dollars each year.