The New York State budget is finally a done deal. Hold on to your wallet.
The 125-day late plan for 2010-2011 brings a $9.2 billion deficit under control, but it also means you’ll have to pay more in some taxes and fees. Those taxes and fees part of a $1 billion revenue bill passed by the Senate Tuesday night which literally hits a lot of us where we shop and where we live.
Governor Paterson says the budget may not have ended up the way he wanted it – but it closes a huge deficit and does not include new debt. Governor David Paterson said, “It was a meaningful budget in that in spite of all the discussion earlier in the year, there was no borrowing. We didn’t borrow a dime.”
Here’s a breakdown of what the budget does and does not include.
- $1.6 billion in STAR rebate checks won’t be going out this year.
- The per pack cigarette tax that went into effect a few weeks ago now becomes permanent.
- A temporary reinstatement of a 4% percent state sales tax on clothing under $110 as of October 1.
- The state’s richest New Yorkers will lose half their deductions for charitable giving, but a tax aimed at hedge fund managers was dropped.
- $1.4 billion school aid cut backs as well as a contingency plan if New York loses out on all or part of the $1.1 billion of federal Medicaid assistance funds it hopes to collect.
- The budget does not include the sugary drink tax the governor pushed for.
- No plan to sell wine in grocery stores.
- No plan to let SUNY and CUNY schools set their own tuition rates.
- $100 million in business tax breaks are being delayed.
Property Tax Cap still up in the air
The Legislature is still waffling on a cap for hard pressed property tax payers. Speaker Sheldon Silver and Democratic leaders in the Assembly have not brought a property tax cap bill to the floor for a vote.
Paterson said voters deserve to know where their representatives stand on the tax cap issue. He vowed to order an extraordinary legislative session shortly before the November election unless Assembly leaders voluntarily choose to schedule a vote on the issue.
Paterson feels the budget battle for the past eight months will ultimately leave the next governor on sounder financial footing than those in other states. Passing a property tax cap would complete the picture, he said.
Ron Deutsch of New Yorkers for Fiscal Fairness is an advocate for the circuit breaker option – which ties your income to your tax bill, which polls show more New Yorkers agree with when they actually hear what it means versus a property tax cap.
“You can’t do property tax relief for free,” said Ron Deutsch of New Yorkers for Fiscal Fairness. “It costs money to provide relief to people. In reality, they can’t afford pay their property taxes now, so if the property taxes go up 2%, 4% a year, that doesn’t help them at all,” said Deutsch.
Paterson dismissed Silver’s preference of a circuit breaker, which would cap property taxes based on household income. “I’m not interested in a circuit breaker because it will cost more money and increase our spending,” Paterson said.
Budget still leaves much work to be completed
Senate GOP spox Scott Reif spoke of the budget, “The Governor, Senate and Assembly Democrats approved $2.2 billion in new tax increases and did away with an additional $1.6 billion in STAR rebate checks that won’t be going out this year. Maybe these facts have slipped the Governor’s mind, but the seniors and homeowners who would be getting rebate checks in their mailboxes this month and next sure haven’t forgotten. While the Governor may have his head in the clouds and is living in Planet Albany, Senate Republicans are grounded in reality right here on Planet Earth, along with exasperated taxpayers who are being taxed to death in New York.”
Lawmakers will also likely have to come back to deal with the SUNY/CUNY bill.
Although Comptroller Tom DiNapoli‘s office has certified the budget, he says it is still a risky plan that doesn’t do much to align recurring spending with recurring revenues.
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