Speculating on the Surplus
March 6th, 2006

The theme for the Oscars this year was “classic Hollywood glamour.” With a decreasing tax base in New York State, Albany might also choose to peddle in nostalgia during this season’s budget negotiations, or at least a little denial.

The governor and the legislature have been tussling over the numbers, but the state’s tax revenue is decreasing as opportunities and residents leave, according to reports from the Comptroller and the New York State Conference of Mayors and Municipal Officials.

Whether from a backroom or a hospital bed, budget negotiations are proceeding, with recent interpretations and discussions of the budget surplus which could amount to over $4 billion, thanks especially to gains on Wall Street. 

Even though the surplus exceeds expectations, many advocate for frugality.  A recent Newsday editorial emphasizes the need to invest in a rainy day fund, ween off of debt financing and begin to pay off the Campaign for Fiscal Equity settlement.   

Instead, Senate Leader Bruno described the amount of money owed for education as “lunacy” and announced plans last week to offer $8.4 billion in tax cuts.  According to Pataki’s budget director John Cape, New York State relies on income tax receipts more than any other state, with as much as 30 percent of that revenue coming from less than one pecent of residents. Growth in spending could outpace increased revenue (20 percent to 7.3 percent) this year. These sweeteners may or may not help reelect enough Republicans to maintain their dwindling majority in the Senate. 

 

By on March 6, 2006, 2:20 pm
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