Talking the Talk

When it comes to taking drastic action, Governor Paterson talks a good game. Unfortunately, while his initial budget proposal lays off of raising the personal income tax, it raises practically every other possible levy that the governor could find. As the NY Post points out: "Gov. Paterson yesterday socked New Yorkers with a mind-boggling 137 proposed new and hiked taxes on everything from beer to cab rides to iTunes downloads and movie tickets. The doomsday, $121.1 billion plan represents the biggest tax hike in state history and slashes services across the board - while still increasing spending by $1.4 billion."

Where's the fiscal hawk that was drawing so much praise from the voters? Paterson has managed to peeve both the left and the right with his tax proposals: "His plan immediately came under fire from both the left and the right. "The pain in this budget seems to be strictly for the middle class," said Sen. Martin Golden (R-Brooklyn). "You name it, [Paterson] taxes it. If anybody's contemplating leaving the state of New York, this should push them over the top."

And of course the WFP, and its allies on the left, has assailed things like the soda tax because it unfairly burdens the lower strata and fails to spread the pain around in an equitable manner. As the NY Daily News tells us: "We will be fighting this tooth and nail. We think it is irresponsible to make this level of cuts and not ask the wealthiest New Yorkers to help ease the pain," said Billy Easton, executive director of the Alliance for Quality Education.

This perspective is something that the Post finds resonating in working class precincts: "Working stiffs are getting stiffed. That was the angry reaction of New Yorkers last night to Gov. Paterson's plan to impose new or additional taxes on everyday purchases like nondiet soda, taxis and cable-TV service. "That's messed up. Everything is higher but my salary. The beer and the cab rides are going to leave me broke," said Harlem resident Ivan Quinones, 37, a grocery stock clerk and father of three."

The NY Times, for its part, focuses on one of its pet projects-public health; and analyzes the soda tax from that perspective: "The Paterson administration’s proposal for an 18 percent tax on sugary sodas and juice drinks — an effort that state officials said would reduce obesity while raising more than $400 million a year for health programs — has already touched off a vigorous debate among New Yorkers, nutrition experts and officials from the beverage industry, which vowed to fight the proposal."

In our view, the soda fat tax fits well within the rubric of those critics who see that the record number of levies are disproportionately burdensome to those with fewer resources. And for the most part the Times sees the same thing: "Asked about the proposed tax, New York City residents, workers and store owners offered a variety of views, but most said they did not support the idea. “There’s plenty of ways to raise money without hurting people who drink soda,” said Nelson Cross, 31, who emerged from Papa’s Fried Chicken in East New York, Brooklyn, with a box of takeout and a bottle of Pepsi. (He said he was concerned that the tax would diminish soda sales at a bar that his father owns.)"

Conservative Party boss Mike Long echoes our concerns about the rise in all of the taxes-and isn't it nice to see WFP's Bill Cantor and Long singing the same song on this?-and lashes out in the News: "State Conservative Party Chairman Michael Long warned that reinstating the sales tax on clothing and shoes will drive people to New Jersey, where they will also gas up their cars and pick up their wine, spirits and soda because the prices are less due to lower taxes. "You're sending notice to the people of New York that we really don't want you here," Long said. "The governor proposed flat spending, but why not actually cut the budget before raising taxes and fees?"

But where is the doom in this doomsday budget? For all of Governor Paterson's rhetoric, there's little real innovation or even any deep and drastic reduction in state spending. The NY Post's editorial captures this: "Yes, the budget calls for relatively modest cuts in big-ticket items. But it "restructures" virtually nothing. It actually increases spending, by some $1.3 billion. And it seeks to impose tax and fee hikes in excess of $4 billion - larger than any New York governor has ever sought before. Can you say "business as usual"?...

And the Post goes on to detail what the governor failed to do: "Paterson had a chance to start bringing the cost of state government to something New Yorkers can afford. He could have called for real spending reductions. He could have demanded that underused hospitals be merged or shut - as the Berger Commission urged years ago. He could have said no to new taxes and fees." Fred Dicker underscores this failure of will: "The lack of creativity in Paterson's proposal - no significant work-force downsizing, no real lifting of regulatory burdens - took longtime government insiders by surprise since it was virtually identical to the earlier Pataki and Cuomo expedients that set the state on its current course of runaway spending. The governor, who insisted for months that New York would end its profligate ways, couldn't even bring himself to propose a budget that kept state spending flat. Despite his claim that the state faced the worst fiscal crisis since the Great Depression, Paterson's budget increases spending by $1.4 billion."

So, where do we go from here? We have a series of business and consumer dampening levies unprecedented in the state's history, but no plan to get us out from under a budget deficit that is slated to balloon by over an additional $10 billion plus in 2010; and a governor who appears loath to tackle the problem any time soon. Does any one think that the legislature will step up to fill the leadership vacuum? This doesn't bode well for New York State.