Assembly's Nixes Pro-Business Reforms
April 5, 2006
by Dylan Skriloff

The New York State Assembly was responsible for the State Budget not containing any of the pro-business reforms suggested by the Business Council of New York State, the Republican Senate Majority or Governor Pataki.

"Please don’t tell me this is the best that Albany can do," Business Council President Daniel B. Walsh wrote in a March 29 letter to Assembly Speaker Sheldon Silver.

With the State having a $2 to $4 billion surplus, business leaders had been hopeful productive reforms would be passed this session. A huge spending increase and "one-shot tax gimmicks," however, dominate the Assembly’s proposed budget, Walsh said.

He pointed out the familiar facts of New York’s economic situation; the State has the most overburdened taxpayers in the nation, has high energy and insurance costs, leads the nation in out-migration of population and has been outpaced in growth by most of the country.

"Remedies for these problems may not be easy to identify, but you don’t have to think of them all on your own," Walsh wrote. "The business community offered good ideas. So did the Governor. So did the Senate." Each of the proposed measures would have made modest use of the State’s budget surplus to improve New York’s competitive posture, he continued.

He concluded, "The Assembly’s ideas are…what?"

A recent New York Times article reported there is concern in Albany about the state's level of indebtedness. From March 31, 1995, to March 31, 2005, New York State's debt grew to $48.2 billion from $27.9 billion, up 73 percent, and increased to $2,509 from $1,537 per capita, according to an analysis by Alan G. Hevesi, the Democratic state comptroller. Under Governor Pataki's budget plan, debt would increase more than 17 percent by the end of the decade, to $56.6 billion. It is unlikely that the Legislature will cause that number to shrink.

"Having these high debt levels in a state where local taxes are the highest in the country is driving the economic condition of the state into peril," said Elizabeth Lynam, deputy research director at the Citizens Budget Commission, a business-backed policy organization. "If they end up increasing spending by as much as they're talking about and supporting it with surplus money, it's going to represent a real lost opportunity," she added.

The full text of Mr. Walsh’s letter is available at www.bcnys.org/whatsnew/2006/0329silverbudgetltr.htm

Please see February 21, 2006 RBA newsletter article Bruno Proposes that New York Abolish Corporate Tax on Manufacturers, for more information about tax reforms suggested by the business community.

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