New York should be careful not to spend its unexpected revenue growth this year, but should instead return the money to taxpayers by embracing the kinds of policies that have spurred job growth in the past, Governor George Pataki told business leaders in Albany today.

The Governor spoke at a luncheon during The Business Council’s Small Business Day in the Empire State Plaza Convention Center in Albany. Senate Majority Leader Joseph Bruno and Assembly Republican Leader Charles Nesbitt also spoke at the luncheon.

The Governor thanked New York’s businesses community for their efforts to prosper and to make New York more prosperous, and he expressed optimism about the state’s economic future.

After the terrorist atrocity of September 11, 2001, New York saw “the most difficult economic time since the Great Depression,” the Governor said. For example, in 2002, New York State government received almost $2 billion less in revenue than it had the year before.

After two consecutive years of revenue decreases, revenue growth this year “went up dramatically,” the Governor said.

Now, New York is at a crossroads, and to create the fiscal stability it enjoyed in the past, it must return to the policies that gave it fiscal stability in the past, he added.

The Governor earned strong applause by repeating his calls for steps to contain growth in the state’s Medicaid spending. “If we don’t limit this growth, [Medicaid] will be 50 percent of every dollar the state spends by the end of the decade,” he said.

New York’s goal should be to return to an economic plateau it reached briefly in 1999 and 2000: a job-growth rate that is faster than the nation’s, the Governor said.

In addition to controlling state spending and reducing Medicaid costs, the Governor also repeated calls he has made in the past for other policy reforms that would improve New York’s business climate, including: further workers’ compensation reform; steps to reduce energy costs; a further easing of New York’s regulatory burden; and tort reform to protect businesses from lawsuit abuse.

Senate Majority Leader Joseph Bruno told the small business leaders that "the time has come for the single-sales factor." That tax reform, which The Business Council strongly supports, would base corporate taxes on just one factor, in-state sales.

A 2001 study by The Public Policy Institute, The Business Council’s research affiliate, concluded that fully enacted single-sales factor reform would ultimately lead to 133,000 new jobs and a net increase in state revenues.

Bruno also said state lawmakers recognize the importance of policies that will help New York's small business community prosper.

Assembly Minority Leader Charles Nesbitt said, "Assembly Republicans are with you on Medicaid reform, workers' comp reform, and single-sales tax changes."