ALBANY—The Business Council is applauding the Senate Majority for its attempts to rein in spending and its announcement that it will reject both the $1.7 billion in tax and fee increases included in the Executive Budget, and the Assembly Majority's proposed $1.5 billion increase in the state's personal income tax.
The Senate Majority should be congratulated for moving ahead with a proposal which recognizes that raising taxes in difficult economic times is not the solution," said Business Council President and CEO Kenneth Adams. "This proposal starts to address the underlying problem of out-of-control state spending.”
Adams had called on lawmakers to bring spending increases more in line with the rate of inflation in a March 10 New York Post column.
“Now is the time to start taking steps toward a new budget discipline for New York,” Adams wrote. “One that balances taxes and spending with a competitive and prosperous private-sector economy.”
The Senate's proposal, announced March 11, would place a constitutional cap on spending increases in the state budget, a release from the Senate Majority's office said.
“Under the Senate proposal, year-to-year State spending increases would be limited to 120 percent of the Consumer Price Index (CPI) or 4 percent, whichever is less,” the release said. “In any given year, fifty percent of tax revenue that exceeded the cap would be placed in a reserve fund and fifty percent would be returned to taxpayers in the form of direct tax rebates.”
If such a cap had been implemented in 2002, state taxpayers would have saved more than 13 billion over the past five years, Senate Majority Leader Joseph Bruno said.
“According to a 2007 report by the National Conference of State Legislatures, thirty states have put in place statutory or constitutional tax or spending limits,” the Senate Majority's release said. “New York continues to rank at or near the top in combined state and local tax burden, further illustrating the need to enact a spending cap.”
“We look forward to discussing the details of this proposal with the Legislature when it is released," Adams said. "The effort to control state spending moving forward is a step in the right direction.”