For Release — August 4, 2010
State Budget Continues Spending at an Unsustainable Rate
ALBANY—“Last night Senate democrats gave approval to the final budget bill, adopting more than $1 billion in new taxes and fees on top of $1 billion in new revenue measures already approved this year,” said Kenneth Adams, president and CEO of The Business Council of New York State, Inc. “Their vote is a far cry from their promise of no new taxes in their earlier budget resolution.”
“Now it's official: Albany has enacted the anti-recovery budget. You can't impose new taxes and fees on businesses, cut economic development programs, renege on promised investment incentives and then hope that employers will turn around and create jobs," added Adams.
“In these tough economic times, private sector job growth has to be government's number one goal,” he added. “Yet, this budget sends a chilling message to New York's employers -- instead of encouraging them to grow their businesses and increase their payrolls here, it does the opposite. To business owners across the state this budget's a confidence-killer.”
When nearly every other state has made the tough decisions to hold the line on spending and taxes, New York has increased spending in the last two years by nearly $14 billion and increased our already sky-high taxes by over $9.5 billion, despite the steepest economic downturn in eighty years.
Among the most damaging tax increases is the deferral of business tax credits that will raise the tax bill on business by $200 million this year and by more than $1 billion in both 2011 and 2012 when fully implemented.
This revenue bill also increased taxes on clothing and footwear sales, and on financial services companies, and it contained other revenue measures including increasing personal income taxes in New York City. It also will force many businesses to pay for the costs of collecting and remitting sales taxes – a new $50 million per year expense for them.
On the other hand, the legislature turned their backs on the governor's proposal to allow the sale of wine in grocery stores, a $300 million revenue raising measure that was widely supported all across the state.
In addition to the spending plan, the Senate's vote to put a moratorium on drilling in the Marcellus Shale is another blow against economic recovery upstate. This moratorium, if passed by the Assembly, will not only stop job creation but will reduce revenue to the state and the counties in the shale region.
“Despite facing budget deficits far into the future, the majorities in both houses of the legislature still don't get it. Even with some reduction in school aid, this budget continues to spend at an unsustainable rate, with significant budget deficits projected over the next several years,” stated Adams.
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