The Legislature should raise business taxes and fees by more than $1 billion to pump additional spending into the budget proposed by Governor Pataki, a union-funded think tank says.

The proposal, which would boost overall corporate income tax revenue by at least 50 percent, comes from the Fiscal Policy Institute (FPI), which successfully pushed for the $2 billion increase in personal-income taxes the Legislature enacted in 2003.

The new proposal includes key provisions of the controversial "New Jersey Plan," a package of tax increases that New Jersey enacted, to little economic benefit, in 2002. The FPI and other spending advocates have been touting these tax hikes since last year.

The Business Council dubbed the package the "New Jersey Plan" and has highlighted its negative effects on the Garden State's economy.

The FPI criticized Governor Pataki's budget for various proposals that would restrain increases in spending on Medicaid and other programs. It did not propose a specific amount of spending to be added to the Executive Budget, under which spending would increase by twice the projected rate of inflation.

FPI said New York should emulate a broad-based "alternative minimum assessment" enacted in New Jersey in 2002. The group has previously estimated such a step would generate up to $460 million in New York.

The FPI also proposed:

• Adoption of "combined reporting" under which multistate corporations would file a single tax return covering all subsidiaries, to raise up to $392 million.
  
  
• Eliminate "loopholes that do not create jobs," including changes to the Empire Zone program and limits on industrial development agencies' tax-abatement programs, to generate as much as $250 million.
  
  
• Creating a "throwback rule" under which New York could tax corporate income that is earned but not taxed in another state.

FPI also urged the Legislature to reduce spending on prescription drugs, and to raise the state minimum wage.