Tune in to WVKR 91.3 FM http://www.wvkr.org today 5-6 pm if you can-- CSEA Region 3 Political Action Coordinator Cody Peluso will be our guest (with co-host Rich Carlson); feel free to call in with your thoughts on the state budget (or anything else you want)-- at 437-7178...
And again-- you're all cordially invited to join Cody/CSEA folks, others mobilized by the Hudson Valley Area Labor Federation (recall their alert yesterday on this just below), and yours truly today 3:30 pm in front of our County Office Building at 22 Market St. in Pok.-- for an urgent press conference for the Better Choice Budget for NY-- to avoid county and school tax hikes, to avoid county and school budget cuts, and to avoid unnecessary and cruel layoffs of state employees...(that will only worsen recession)...
Did you see on the front page of B section of yesterday's paper how, by a 520-to-344 margin, the vast majority of 864 of local residents oppose Gov. Paterson's recent edict to layoff 8900 state employees?...
http://www.poughkeepsiejournal.com/article/20090325/NEWS12/903250332&referrer=FRONTPAGECAROUSEL
Recall-- the Poughkeepsie Journal reported last December 25th (on front page, no less) on a Quinnipiac poll showing that literally 84% of New Yorkers support a millionaires' tax, including over 70 percent of registered Republican voters, confirming other polls last year with similar results on this.
[see http://www.quinnipiac.edu/x1318.xml?ReleaseID=1198 -- we're in majority; just need to mobilize!]
Fact: Better Choice Budget Coalition members (all in favor of millionaires tax) include Dutchess Outreach, Interfaith Impact of NYS, NYSUT, CSEA, PEF, Interfaith Alliance of NYS, NYS Child Care Coordinating Council, NYS Community Action Association, NYS Coalition Against Domestic Violence, NYS Alliance for Retired Americans, NYS Senior Action Council, NYS AFL-CIO, Hunger Action Network of NYS, MicroBizNewYork, Nutrition Consortium of NYS, Capital Area Council of Churches, Albany Presbytery, Faith and Hunger Network of NYS, FOCUS Churches of Albany, Lutheran Statewide Advocacy, Reformed Church in America, Office of Justice and Peace, Sierra Club Atlantic Chapter, Environmental Advocates of New York State, Citizens Environmental Coalition, & Citizen Action of NY.
[see http://www.ABetterChoiceforNY.org ]
Fact is also that shortfunding schools will kill our seed corn-- hammering nail in coffin of our economy...
[see: http://www.AQENY.org ; http://www.NYSSBA.org for much, much more on this]
Recall as well this one Feb. 28th from Gannett Papers:
"Stimulus Money May Not Prevent School Layoffs" by Cara Matthews
http://www.pressconnects.com/article/20090228/NEWS01/902280342/1001/archive
State budget cuts by Paterson for education still brutally hitting schools hard here in Dutchess; see:
[...would not be bad idea to put one more call in to Paterson, Silver, Smith-- free at (877) 255-9417!...]
Rhinebeck-- http://www.dailyfreeman.com/articles/2009/03/27/news/doc49cc4e2d5eabf835660032.txt
Hyde Park-- http://www.dailyfreeman.com/articles/2009/02/09/news/doc498f98d22e1b6953803165.txt
Millbrook-- http://www.poughkeepsiejournal.com/apps/pbcs.dll/article?AID=2009902080350
Pine Plains-- http://www.dailyfreeman.com/articles/2009/01/27/news/doc497e9d4c31969433952694.txt
Red Hook-- http://www.dailyfreeman.com/articles/2009/01/26/news/doc497d4ced71296649156943.txt
Arlington-- http://www.poughkeepsiejournal.com/article/20090324/NEWS02/90324040/1001/news
Spackenkill-- http://www.poughkeepsiejournal.com/apps/pbcs.dll/article?AID=200990216029
Wappinger-- http://www.poughkeepsiejournal.com/article/20090323/NEWS02/90323051/1007
Webutuck-- http://www.poughkeepsiejournal.com/article/20090206/NEWS02/902060325/0/NEWS02
Dover/Beacon-- http://www.poughkeepsiejournal.com/apps/pbcs.dll/article?AID=2009902080350
Poughkeepsie-- http://poughkeepsieschools.info [now is not time to cut back; see this in today's paper: http://www.poughkeepsiejournal.com/article/20090327/NEWS01/903270333/1006 ]
Also-- this from the NYS Library Association ( http://www.nyla.org/index.php?page_id=1612 )...
"Reject the $18 million (18%) state budget cut in Library Aid-- this cut would bring Library Aid down to 1993 levels. Library Aid was already cut twice in 2008 (total of 3%). Library use has increased dramatically due to economic downturn. Library Aid provides the majority of funding for library systems, which allow libraries to provide services in a cost-effective and efficient manner."
From the Foundation for Hudson Valley Libraries:
"Please don't let the Governor's 18% cut to our library system go through. During these tough times, my neighbors and I are relying more and more on library services.
Here are the facts:
-- We are willing to do our part, but an 18% cut in funding is unfair and counterproductive.
-- People need libraries now more than ever (library usage is up by as much as 14%
-- People rely on libraries for essential and unique services-- as the #1 point of internet access for those who cannot afford it at home; a must for job-seeking and homework, and often public libraries serve as school libraries when school is closed.
-- Cuts at the state level will mean increased costs to my family and our community."
See http://www.petitiononline.com/stopcuts-- NYS tax reform needed now or county budget/tax hell!...
"...if the state budget is adopted as is, the county would have to absorb $5.4 million...Our local taxpayers will be left holding the bill at a time they can least afford it...While we are facing declining revenues from those revenues that normally flow into the county treasury, from things like sales tax revenue, I am respectful of the decisions the governor and state legislators have to make, but we don’t want them shifting their costs onto the back of county government and property taxpayers or to shifts the program responsibilities and service responsibilities to us...negative impacts the county would face, including reduced aid to Dutchess Community College, elimination of funding for Community Optional Preventive Services for children, Youth Block Grant combining discretional and mandated services, eliminating the $40 per diem reimbursement for state parole violators and state readies, health services and emergency medical services reimbursement, elimination and reduction in community mental hygiene funding and services, and reductions in funding for seniors, probation services and anti-recidivism programming...I am hopeful that during this difficult process when the state makes tough decisions of its own, it will avoid shifting state costs to local property taxpayers..."
[from http://www.midhudsonnews.com/News/2009/March09/04/NY_budget_Steinhaus-04Mar09.html ]
And re: NYS budget and environment-- click here now-- http://www.eany.org/issues/Letter2-13-09.pdf ;
http://www.eany.org/issues/reports/Permission%20to%20Pollute.pdf -- they point out how one of the most well-respected environmental organizations in NY, Environmental Advocates of NY, not only made it public earlier this year that Gov. Paterson is proposing to cut DEC staffing by 241...but also that DEC can barely enforce the environmental laws that are on the books right now because they're so short-staffed, and 90% of SPDES permits are rubber-stamped(!)...
There might only be a day or so left to let state legislators and Gov. Paterson know how we feel, folks...
So-- to help avoid county/school tax hikes, county/school budget cuts, layoffs worsening in recession...
The time is now, folks-- to call state legislators, Paterson @ (877) 255-9417--
-- for progressive reform of NY's tax code that 84% of New Yorkers (and over 70% of G.O.P.) deserve!...
Pass it on-- now-- before it's too late...
...unless you truly relish the notion of higher county/school taxes, more county/school cuts, layoffs....
[again-- see http://www.petitiononline.com/stopcuts to be reminded of county budget hell < last winter]
Joel
489-5479/876-2488
joeltyner@earthlink.net
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From Billy Easton/Alliance for Quality Education (oneny@aqeny.org)...
Date: Wed, 25 Mar 2009 11:50:10 -0400 (EDT)
Subject: Urgent- I'm At The Capitol NOW. 6 Days left!
I'm writing you from the halls of the Capitol. There are only a few days left until the state budget deadline. We've all been working hard lobbying in our districts and in Albany, making phone calls, sending emails, and getting our message out loud and clear. As I walk the halls this morning it's clear that the legislators are feeling the pressure but now is not the time ease up. Please click the link below and send a message today demanding our children get their fair share of the Fair Share Tax Reform. Be sure to click the fax option as well.
The Governor's budget cuts $2.5 billion from education. The stimulus education package alone doesn't do enough. Without a Fair Share Tax Reform our children will receive NONE of the Campaign for Fiscal Equity lawsuit funding due to them this year by law!
Key points to remember-
1- The Governor's $2.5 billion education budget cut will devastate children across the state.
2-The Federal stimulus (education) money is $2.5 billion stretched OVER 2 YEARS and shared with higher education. For the 09-10 school year K-12 and higher education will share $1.25 billion dollars. This does NOT restore the Gov's cuts in full.
3-The Fair Share Tax Reform (which will generate an additional $6 billion in new revenue - a portion of which can be used for education) is the only way to ensure our children have a solid chance for success.
Be sure to email me oneny@aqeny.org and let me know how your call went. United in voice and message, we CAN make a difference!
The state must follow the federal government's lead and continue to make restorations to the education budget. Protecting our schools by passing a Fair Share Tax Reform is the ONLY fair and responsible option. We know these are hard times but there is no reason we can't make at least $2 billion in restorations. Even then our children would still be giving up $500 million!
Myself, my staff and other education advocates from across the state will be here all day fighting for our children. Can we count on you to take 2 minutes to send a letter and fax echoing our message?
Sincerely,
Billy Easton
Executive Director, Alliance for Quality Education
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From: "Hudson Valley Labor Action Network"
Subject: Labor News & Notes
NYS Budget Rally
Today, March 27, there will be a rally and press conference at the Dutchess County Office Building, located at 22 Market St. in Poughkeepsie at 3:30pm. The budget is moving quickly and this may be the last chance to let NY's Governor and Legislators know how we feel. We must speak up in order to avoid tax hikes, budget cuts and layoffs the only serve to worsen the current recession. NY's tax system must be reformed to reflect a progressive tax policy that will allow the wealthy to pay their fair share, helping to eliminate the undue burden that has been placed on the backs of workers. For more information, please call Jen at 845-567-7760 or email Joel at JoelTyner@earthlink.net.
NYS Layoffs
Governor Paterson has announced nearly 9,000 layoffs of working New Yorkers. While providing his staff with double-digit increases, bailing out AIG and Wall Street, Governor Paterson has forgotten to bail out working New Yorkers. The Governor MUST ask those who can afford it to a pay a little more so working families can keep their homes, food on their table and continue to pay their mortgage. CSEA along with other Unions have offered to work with Governor Paterson to reduce the cost of prescription drug plans, saving the state $500 million dollars. He has refused. Working families and Union members have come up with a sound policy to reform the states tax system for a more progressive setup. Governor Paterson has refused. This is the wrong time to make cuts! To take action on this important campaign, please visit
WDI Funding at Risk
The funding for the Workforce Development Institute (WDI) may be eliminated by the NYS Senate. WDI funds vital programs that help provide necessary training resources to union members, childcare to working families and a Community College Program serving he disabled population. If these crucial dollars are eliminated, the WDI will not be able to continue serving New York's unions and working families. Please take action today in support of WDI's training funds for union workers! You can send a letter to NYS Senators by visiting: http://www.unionvoice.org/campaign/WDIFundingatRisk .
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Last Thursday's Times reported on how higher taxes on rich don't drive away wealthy ('03, other states);
see http://www.nytimes.com/2009/03/19/nyregion/19leave.html?_r=1&ref=nyregion for much more...
Check out new NYS organization-- Responsible Wealth-- rich folks themselves right here in our area who are FOR the millionaires tax-- click here for article on this from yesterday's Albany Times-Union:
http://timesunion.com/TUNews/author/AuthorPage.aspx?AuthorNum=113 ...
Check out brand-new report released Sunday from Fiscal Policy Institute & Center for Working Families:
http://www.fiscalpolicy.org/PersonalIncomeTaxReform.html -- "Progressive Tax Reform Essential"...
Fact: The way our tax system is now, middle income New Yorkers now pay literally about twice the state and local taxes that the richest 1% of New Yorkers pay as a percentage of income because of unfair tax shifts to the local level over the last few decades-- it's high time we worked to restore at least just a bit of progressivity and fairness into our tax code, according to the Institute for Taxation and Economic Policy, as Assemblyman Kevin Cahill himself has repeatedly pointed out in his speeches at Dutchess County Democratic Committee Issues Forums over the last decade.
[see http://www.itepnet.org/whopays.htm ; http://www.itepnet.org/pb41pit.pdf ;
http://www.ctj.org/taxjusticedigest/state-tax-issues/new-york/ ]
Fact: The Wall Street Journal has reported that 98 percent of small business owners make less than $250,000 a year; according to the Small Business Administration, "businesses with fewer than 20 employees account for 90 percent of all U.S. firms and are responsible for more than 97 percent of all new jobs, according to a new report by the Small Business Administration."
[see http://mediamatters.org/items/200810180003 ]
Again-- if the tax system statewide isn't reformed soon to make it more fair and progressive, our County Legislature might be forced to at least put a referendum before voters soon on one sure way to slash regressive property and sales taxes (the way NYC and Yonkers have)-- with a local income tax(!)...
I've advocated for this since the early 90's; well over 100 of you out there signed to support this at these petitions-- see http://www.PetitionOnline.com/Fairness http://www.petitiononline.com/fairtax for more...Recall this from p. 41 of the Fiscal Policy Institute's Nov. 2006 "One New York" report-- from FiscalPolicy.org/OneNewYork.html-- "The governor and the legislature should consider giving county governments the authority to levy a 'piggyback' income tax for county government purposes. Such a tax could be structured like the income tax that the city of Yonkers is currently authorized to impose. The use of such an option would make a county's revenue system more progressive and place less of the burden on middle and lower income residents"...
The fact is that both New York City and Yonkers have local-level income taxes, with revenue collected by Albany through state income tax forms that is then given back to those localities-- it wouldn't be hard to add our county to that list-- and Newsday, many Nassau County business leaders, the Chair of the Tompkins County Legislature, and many in Monroe County have endorsed similar plans there; Rockland and Tompkins County Legislatures started study commissions to look at similar revenue alternatives to property tax hikes...and Frank Mauro, Exec Dir. for the Fiscal Policy Institute, has been nice enough to crunch some numbers for Dutchess...see: http://www.fiscalpolicy.org/dutchessRPTlevies.htm ; http://www.fiscalpolicy.org/dutchess1999and2000.htm; http://www.fiscalpolicy.org/dutchess2001.htm ; http://www.fiscalpolicy.org/ImpactatDifferentIncomeLevels.htm ...(and see many other points for this @ http://www.tompkins-co.org/pubinfo/incometax7-12-05.pdf )...
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From http://www.pressconnects.com/article/20090228/NEWS01/902280342/1001/archive ...
Stimulus Money May Not Prevent School Layoffs
BY CARA MATTHEWS • ALBANY BUREAU • FEBRUARY 28, 2009
ALBANY - Gov. David A. Paterson promised Friday that the state would restore $700 million in proposed education cuts with federal stimulus money, but school districts said they could not guarantee there won't be layoffs or larger class sizes next year.
"Every cut we made to school districts we will restore in this budget process," Paterson said at an event Friday on Long Island.
The federal legislation, signed by President Barack Obama last week, comes as New York grapples with a $14 billion projected budget deficit. The governor recommended spending $20.7 billion on education in 2009-10 - $698 million less than current spending and $2.5 billion less than a planned funding hike - which school officials estimated could result in 6,000 layoffs upstate and on Long Island and nearly 15,000 in New York City.
New York's portion of the economic stimulus package is $2.5 billion over two years for pre-kindergarten through grade 12 and higher education, and a separate $550 million for education, public safety and other government services. Schools will receive an additional $1.7 billion in the next two years for students in high-poverty areas (Title I money) and for special education.
There's no question that the stimulus funds are a "lifesaver" for school districts, but they don't know exactly how much they will get, when it will arrive and if there will be any strings attached to it that they aren't aware of now, said David Albert, a state School Boards Association spokesman. At the same time, health insurance costs have been increasing about 10 percent a year, and contracts for staff, transportation and other expenses are rising, he said.
One-third of 605 school board members said in an e-mail poll that increased federal aid would not enable them to prevent layoffs next year, and about half of them said they weren't sure. Twenty percent said the stimulus money would negate the need for layoffs, the poll found.
"I think the real concern on the part of the school districts is they just don't know if they're going to see this money in time for their budgets," Albert said.
Districts are still considering larger class sizes and cuts to programs, Timothy Kremer, head of the School Boards Association, said in a statement.
More than half of the board members who responded to the poll said the state should increase education funding for 2009-10 and 39 percent said it should remain level. Nine percent said it should decrease.
Districts have to prepare budgets and hold public hearings on them before taxpayers vote on spending plans May 19.
Lawmakers are supposed to craft a 2009-10 state budget before the new fiscal year begins April 1, a process that will be easier with the influx of federal money.
State Senate Education Committee Chairwoman Suzi Oppenheimer, D-Mamaroneck, Westchester County, said about $88 million of the $1.25 billion in 2009-10 is expected to go toward higher education and $1.19 billion for pre-kindergarten through grade 12. The other $550 million is subject to negotiation. Nothing is definite, she said.
"It's never done till it's done and the devil is in the details," she said.
The federal Education Department hopes to have half of the money in the two-year package distributed in the next 40 days and the other half within six months, Jim Bradshaw, a spokesman for the agency, said Friday. The department is working on guidelines for its distribution and hopes to announce them in the coming days, he said.
Rochester and Yonkers school districts have said that they would each have to lay off hundreds of employees if the governor's budget went through as proposed. Yonkers said it could be necessary to cut as much as a quarter of its staff of about 4,000, and Rochester has said it could be forced to lay off about 500 workers.
The federal stimulus funds will reduce but not eliminate the need for layoffs, said Jeri Fierstein, a spokeswoman for Yonkers schools.
Title I funds in the stimulus package will help reduce the number of positions that will need to be cut, "but they are a temporary fix," Rochester Schools Superintendent Jean-Claude Brizard said.
"Regardless of the stimulus, we need to be responsible and right-size the district," he said.
The federal funds are helpful, but they won't be enough to put the state back on schedule in a four-year plan to pump $7 billion more into education, said Billy Easton, executive director of the Alliance for Quality Education. The group wants lawmakers and the governor to place a higher income tax on wealthy New Yorkers to help generate more revenue for the state.
The $20.7 billion in Paterson's budget is $2.5 billion less than the increase called for in the plan. The agreement to spend $7 billion more, particularly in poor districts statewide, was adopted two years ago, following years of litigation over education equity and funding for New York City schools.
"This takes a big bite out of it, but it does not fill the gap," Easton said.
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More from Dr. Kathy Silgailis (SilgailisK@wpunj.edu) of PULSES (Parents United Learning the Special Education System)...
[shades of thirteen years ago, sadly!...(a number of local superintendents now real concerned re: this):
http://www.nytimes.com/1996/02/11/nyregion/state-would-make-school-boards-pay-some-costs-for-the-disabled.html?sec=health&spon=&pagewanted=all ]
Early Intervention and PSE
The changes to the Early Intervention Program proposed in the 2009-2010 NYS budget will be devastating to the system and have long-term repercussions that have clearly not been considered.
1. Research is clear that Early Intervention works. In many cases, children can be declassified by the time they reach Kindergarten. The priority with Early Intervention should always be to evaluate children and provide appropriate services early. Long-term costs are reduced by good E.I. both for schools and for DSS.
2. The proposed changes will put many E.I. providers out of business and create major disincentives to new providers entering the field. Charging provider application fees and requiring that providers do their own insurance billing (when the counties with greater resources have not been effective at doing so) is a huge burden in a “fee for service” field. Medical groups have entire billing departments to deal with multiple insurance companies, rejected claims and partial payments.
Also, the E.I. rates have not been increased for inflation since 2003. With increases in energy costs for both center-based and SEIT providers, they are already being squeezed. There are parts of the state where families may wait months to fill assigned treatment slots. Cutting back the pool of providers (who are all required to have advanced degrees and certification) is not going to get children treatment when they need it. Once providers exit the field, it will create a void that cannot be refilled quickly.
3. The addition of parental co pays for E.I. creates a disincentive for working class families to have their children evaluated. Again, we want children treated early! Also, the proposed payment rates are inequitable. A family of 4 making $200,000 pays the same dollar amount as a family of 4 making $88,420 (401% of the federal poverty level) but less than half as much as a percentage of income. There will also be costs associated with administering all of these family payments and the system will be endlessly complicated. What will happen in families when a parent is laid off? What if there is more than one child receiving services? What if the parents are getting divorced? Will the co pay be the same for a child receiving 5 hours a week of services and 25 hours a week of services? Why are parents with private insurance going to be billed a co pay as well? For young families whose children have just been diagnosed with delays, the system is already overwhelming enough without adding a financial burden.
4. The proposal for Preschool Special Education creates another unfunded mandate for school districts (to pay 15% of the costs of preschool services) and will raise property taxes. School districts have no other taxation options to raise funds. It also puts parents in the position of having to battle their school districts from the time their child is 3 years old to obtain appropriate services. This allows more possibilities for litigation, again raising costs for school districts. Many of these children will be being evaluated for the first time in the 3-5-age range and this proposal creates a financial incentive for school districts to underestimate a child's need for services.
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From the front page of yesterday's paper...
8,900 Job Cuts Ordered To Pare NY Deficit
State is major valley employer
BY JOSEPH SPECTOR • JOURNAL ALBANY BUREAU • MARCH 25, 2009
http://www.poughkeepsiejournal.com/article/20090325/NEWS12/903250332&referrer=FRONTPAGECAROUSEL
ALBANY - Thousands of state employees in the mid-Hudson Valley are waiting to see if theirs will be among the 8,900 jobs cut by Gov. David Paterson's plan to help make up a multi-billion dollar budget shortfall. With 9,800 employees in the Poughkeepsie-Newburgh-Middletown area, the state is one of the largest employers in the mid-Hudson Valley. State and community colleges, police, health and transportation departments and the bridge and Thruway authorities are among agencies and departments for which local people work. The layoffs represent nearly 5 percent of the state's roughly 200,000-member work force and are another blow to a state where new unemployment claims have reached a staggering 39,000 per week, an increase of more than 20,000 compared to a year ago.
Public-employee unions railed against the move. Unions have been battling Paterson over proposed health-care and education cuts in his 2009-10 budget proposal. "We've been trying to give him the benefit of the doubt but if Gov. Paterson really believes putting nearly 9,000 New Yorkers out of work is a good idea, he really is out of touch with life on Main Street," CSEA President Danny Donohue said.
Ken Brynien, president of the Public Employees Federation, said unions offered ways to cut the state's deficit, such as reducing the state's use of consultants, reducing overtime costs and increasing income taxes on the wealthy. "There is absolutely no need to do layoffs. It will not save the money that the governor thinks it will," he said. "PEF's position is clear and unchanged. We will not agree to any changes in our contract that reduce compensation."
Ralton Lewis, a Tivoli resident who works for the state Department of Transportation, said he was disappointed by Tuesday's announcement. He said state workers have already made concessions the past few months and are now being asked to do more with less. "It sounds like he's trying to get blood from a stone," Lewis said. "I'm not an economist. I'm like most Americans. We're working hard, we're getting axed, thrown from our homes and the government is still asking for more." Paterson's announcement comes just hours after state officials reported the budget deficit grew by another $2.2 billion, bringing the funding gap to an unprecedented $16.2 billion.
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From http://www.fiscalpolicy.org/PersonalIncomeTaxReform.html ...
Back on Track: Why Progressive Tax Reform Is an Essential Part of New York's Budget Solution
For Immediate Release:
March 22, 2009
Contact:
Jason Angell, Center For Working Families 718-222-5754, x242 or (c) 845-625-9325
James Parrott, Fiscal Policy Institute 212-721-5624 or (c) 917-880-9931
Frank Mauro, Fiscal Policy Institute 518-786-3156 or (c) 518-469-6680
New Report Debunks Criticisms of Progressive Income Tax Reform in New York
Raising Taxes on Wealthy New Yorkers Is the Best Option for Balancing the State's Budget During the Recession
Albany - The Fiscal Policy Institute and the Center for Working Families released a new report today debunking criticisms of progressive income tax reform. The report also explains why increasing taxes on the portion of income over a relatively high level is the "best option" for solving New York's current budget crisis.
The report, Back on Track: Why Progressive Tax Reform Is an Essential Part of New York's Budget Solution, looks at the economic changes and policy choices that caused New York's current fiscal crisis and examines the consequences of rolling back some of the state's income tax cuts on the wealthiest taxpayers.
"In less than two weeks, New York policymakers must decide how to balance next year's $14.2 billion deficit; the federal stimulus helps, but there's still a gap of about $8 billion," said Jason Angell, Director of the Center for Working Families, who co-authored the report. "Progressive income tax reform is not only the fairest way to get New York back on track, it's also the most economically sound. Low- and moderate-income families already are being battered by the recession. The State shouldn't add to that pain with damaging budget cuts."
"When you look at the economic evidence," said Frank Mauro, Executive Director of the Fiscal Policy Institute, "there's little reason to believe progressive tax reform that adds one or more brackets to the personal income tax at relatively high levels would hurt New York's economy, and good reason to think it's the best option policymakers have left. The experience in other states that have raised high-end income taxes shows that the wealthy have not deserted their states just because their taxes were increased."
Under current law, the threshold for the top personal income tax rate is $20,000 for single taxpayers and $40,000 for joint filers. "Relatively few taxpayers would be affected by a high-end tax increase," said James Parrott, Chief Economist and Deputy Director of the Fiscal Policy Institute. "In 2006," according to Parrott, "only 2.5 percent of New York residents had annual incomes above $250,000, one of the thresholds often discussed for an increased tax bracket. In most New York counties, fewer than two percent of taxpayers would be affected."
The study notes that drastic state budget cuts will harm the economy more than progressive income tax reform, and that such reform would provide balance to the overall tax system and help make New York more economically productive in the long-term.
Executive Summary
New York faces one of the largest budget deficits in the country for the coming year at
$14.2 billion. The State’s 2009-10 fiscal year begins April 1, 2009. Two responses to
addressing the crisis have dominated the policy debate. While both acknowledge the
detrimental impact Wall Street revenue declines have had on the State’s fiscal condition,
they diverge in significant ways.
One response frames the deficit as a matter of excessive public spending and calls for
massive cuts to public programs and services. The other finds that, following thirty years
of personal income tax (PIT) cuts for the wealthiest New Yorkers, the State’s overall tax
system is highly regressive and incapable of supporting essential service needs. This
view warns of the economic damage that would result from large state budget cuts and
calls for restructuring the PIT as a necessary step towards fiscal stability in this troubled
economic climate.
In the context of a deepening recession, which is the most sensible path to take? This
policy brief reviews arguments, analysis and data pertinent to deciding whether
progressive tax reform should be part of the solution. We find that:
• A deficit-reduction plan that relies too heavily on cuts will intensify
the economic slump by reducing consumer spending, counteracting the
federal economic stimulus effort, and devastating working and middle class
families reliant on public services.
• Economic theory—articulated by such eminent economists as President Obama’s
budget director, Peter Orszag, and Nobel laureate Joseph Stiglitz—suggests that
during a recession, steep state budget cuts hurt the economy much more than a
high end income tax increase.
• High-end income tax increases have not had the negative economic
consequences that opponents predicted. Progressive tax reform in a
number of states has not led to the movement of wealthy families out of their
states or correlated job loss.
• Other states have successfully restructured high-end PIT rates without resulting
economic harm:
o From 2004 to 2006, following California’s implementation of a new
national top rate of 10.3 percent on income over $1,000,000, there was a
38 percent increase in the number of millionaires in the State.
o The number of half-millionaires in New Jersey has grown by 70 percent
since increasing their highest rate from 6.37 percent to 8.97 percent in
2002, from 26,000 in 2002 to 44,000 in 2006. (Gov. Corzine recently
proposed a one-year increase to 9.75 percent.)
o New York experienced a comparable increase in high-income returns after
temporarily raising PIT rates, from 250,000 in 2003 to over 325,000 in
2005, representing a 30 percent growth.
• States with higher top PIT rates than New York have experienced positive private
sector job growth over the past decade. Additionally, during the last temporary
PIT increase, New York gained 127,000 jobs.
• Marginal income tax increases will not have a significant impact on small business
owners. For example, 98.6 percent of all small business owners make less than
$250,000 a year.
• Current fiscal pressures largely stem from excessive tax cuts made
over the last three decades. New York has cut the top PIT rate on wealthiest
residents in half even as growing polarization has left New York with the widest
income gap between the top and bottom in the nation. Today a single person with
an income of $30,000 pays the same marginal tax rate as a person with an
income of $30 million.
• The reality of the claim that state spending is “out of control” is that aside from
important commitments involving education aid, healthcare, property tax relief
and transportation, state spending from 2004 to 2008 grew at less than 2.9
percent a year, barely the pace of consumer inflation. The state, however, made
these commitments without identifying how to sustainably pay for them.
• High-end PIT cuts have led to a massive tax shift. To compensate for lost state
revenue, New York has increased the burden on local governments to pay for
essential services through increased property and sales taxes. The tax burden
now falls heaviest on those with the least ability to pay.
• New York should consider reforming its top PIT rates to help close the
remaining 2009-10 budget gap, ensure fiscal stability, protect services, and
restore sustainability and fairness to the overall tax structure.
• Even after all available federal stimulus funds that can go towards the deficit are
utilized, New York would still be left with a $7.5 to $8 billion gap for the coming
fiscal year.
• A high-end income tax increase will help blunt the impact of state-wide program
cuts while affecting relatively few New Yorkers. For example, raising PIT rates
above $250,000 would affect only 2.5 percent of all taxpayers statewide and only
one percent of upstate taxpayers.
• Permanent PIT reform would provide the financing necessary to phase in
substantial property tax reform once the economy recovers.
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From http://FairShareReform.com/content/pages/the_cuts ...
[Fair Share Coalition members include: Working Families Party, Citizen Action, ACORN, Alliance for Quality Education, Communications Workers of America, UFT NYSUT, UAW, and 1199/SEIU]
New York is facing a $15 billion budget gap. Governor Paterson's solution? Massive, devastating cuts -- the most dangerous cuts we've ever seen. Governor Paterson wants to close the budget gap with billions of dollars of deep, painful cuts to hospitals, schools, community centers, libraries, parks, and every agency and program New Yorkers depend on.
The Governor's plan means closing community hospitals, laying off thousands of teachers and nurses, raising tolls and fares for public transportation, and hundreds of cuts that will hurt us every day.
The Governor's plan isn't a solution -- it's a disaster, weakening our communities and leaving New Yorkers even more vulnerable during this economic crisis.
Times are tough, and we all understand the need for shared sacrifices -- including sensible cuts across all sectors. But the Governor's cuts are extreme, destructive, and too painful for New Yorkers already struggling to make ends meet.
In 2007 -- after 15 years of lawsuits -- New York's schoolchildren finally won a legal commitment from the state to raise the quality of education in under-funded schools. Now the Governor is asking schoolchildren to throw away those gains and contribute $2.5 billion to deficit reduction.
Education
o $2.5 billion in cuts to schools and classrooms
o Larger class sizes
o Thousands of teacher layoffs across the state
o Cutbacks in tutoring, after-school programs, arts, physical education, extended-day and extended-year programs
o Less funding for books, school libraries, computers, science labs and new technologies
o Tuition hikes for SUNY and CUNY students
Healthcare
o $3.5 billion in cuts -- affecting every hospital, nursing home, and home care facility in the state
o Hospital and nursing home closings
o Longer wait times in emergency rooms
o Reduction in outpatient services, maternity wards, and other vital specialties
o Reduced quality of care
Social Services
o Cuts to hundreds of programs vulnerable New Yorkers depend on -- slashes to eviction prevention, emergency homeless services, housing assistance, homeless shelters
o $12.5 million reduction in eviction prevention and homelessness intervention and $13 million cut to homeless shelters
o 75% slash to legal aid services-- leaving only $1 million in funding, down from $16 million in 2007
o Almost $30 million cut to afterschool programs and 25% reduction for youth services like gang prevention, crisis intervention for runaway and homeless teens, and family mediation
o Elimination of some abuse and neglect programs
o 25% cutback to home-visiting supports for at-risk households with infants and toddlers
o New fees for early intervention to young children with developmental delays
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Also-- recall these five crucial facts from http://www.ABetterChoiceforNY.org/topten_mil.html :
[massive Better Choice Budget Coalition website-- faith groups, nonprofits, unions]
"The poorest New Yorkers pay twice as much of their income in state and local taxes than do millionaires (Institute on Taxation and Economic Policy). Top income tax rates for the wealthiest have been reduced from 15.375% to 6.85% over the last 25 years (Division of Budget). Since 2003, people making over $200,000 per year have seen their income grow by 108% while those under $200,000 have seen their income grow by only 15% (Division of Budget). Nobel Prize winning economist Joseph Stiglitz says it is better for state's economy to increase taxes on the wealthy rather than to cut spending on goods and services purchased locally. Quinnipiac poll August 6th: 78% of New Yorkers support a millionaire's tax to avoid local tax hikes and service cuts."
Fact: The richest 1% of New Yorkers are also now paying about half the income taxes to Albany as they did three decades ago under Rockefeller (when our local property taxes weren't nearly so high-- real shift to local level hadn't begun yet). Read "A Little Bit of Tax History-- The Path Not Taken: How New York State Increased the Tax Burden on the Middle Class and Cut Taxes for its Highest Income Taxpayers by Over $8 Billion a Year" by Frank Mauro-- at http://www.Fiscalpolicy.org/taxhistory2.htm .
Fact: The richest 1% of Dutchess County residents are now getting more than $90,000 a year in federal tax breaks compared to what they paid eight years ago, according to Citizens for Tax Justice-- http://www.CTJ.org -- while the rest of us are getting killed with excessive property taxes that are roughly 70% higher than the national average, according to the Citizens Budget Commission.
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From http://timesunion.com/AspStories/story.asp?storyID=763966&category=OPINION ...
Lighten weight of tax burden
By JAMES PARROTT
First published in print: Tuesday, January 27, 2009
Both fairness and sound economics should play a role in closing New York's budget gap.
Gov. David Paterson's budget proposal shows that the top 5 percent of New York taxpayers had 59 percent of all income in the state in 2006. That's one and a half times the combined income of everyone else. However, if you put this together with the income numbers from 2002, and with the budget's projections for 2009, a curious picture emerges.
Even allowing for some slippage in high incomes in the recession, all of the income growth between 2002 and 2009 will go to the wealthiest 5 percent. The other 95 percent of households taken together will have about the same income this year as in 2002 (and that's without adjusting for inflation.) The incomes of the top 5 percent will have doubled over that period. That's a $200 billion income gain.
That's a staggering set of figures, even to those of us who have been shining a spotlight on income polarization for years. No income growth for 95 percent, double for a handful.
This picture is particularly curious because, when it comes to tightening our belts in the recession, the governor's budget has all of the tightening done by the 95 percent, sparing the one in 20 at the very top of New York's economic pyramid.
The economic carnage hits harder at those with modest incomes and those losing their homes and/or jobs and/or retirement savings than at those whose incomes may fall from $3 million to $2 million.
Asking the top 5 percent — or maybe just the top 3.5 percent with incomes over $250,000 — to pay a slightly higher rate on their state income taxes seems like a reasonable way to share the sacrifice that's being exacted by a damaged economy and a tighter budget.
It would also be a step in the direction of restoring fairness to New York's graduated income tax, which has become significantly less graduated over the years. Today, New York's middle- and lower-income households pay a higher share of their incomes in state and local taxes than the top 1 percent or top 5 percent.
Will higher earners desert New York if their taxes are raised? They didn't after 2003 when the state (and New York City) instituted higher tax brackets at the top. (Those increases expired in 2005.)
Similarly, a Princeton University study showed that an increase in New Jersey's top income tax rate in 2004 did not adversely affect the number of high earners choosing to live there.
There is a very good chance that President Barack Obama's stimulus package will include significant fiscal relief to New York and all states. However, federal aid alone will not stave off all of the proposed service cuts that could worsen the New York economy.
The state needs to do its share as well. One hundred and twenty economists from across the state wrote to the governor last month telling him the right answer: "economic theory and historical experience (shows) it is economically preferable to raise taxes on those with high incomes than to cut state expenditures." New York, which unlike the federal government has to balance its budget, doesn't have a perfect set of choices. In a recession, it's not ideal either to raise taxes or to cut services. But high earners typically spend only a fraction of their income in any given year, saving the rest. On the other hand, state spending employs workers, provides services and puts money in the hands of New Yorkers in need — all of which put money in circulation, priming the economic pump.
The Legislature should use any federal aid to trim the proposed budget cuts as much as possible. That's the idea behind the stimulus. To further trim the remainder, we should modestly raise taxes, restoring progressivity to the state's graduated income tax, and minimizing harm to an already damaged economy.
James Parrott is the deputy director and chief economist of the Fiscal Policy Institute.
Tax burdens, by income group
Bottom 20%: 12.5%
Second 20%: 11.3%
Middle 20%: 11.6%
Fourth 20%: 11.1%
Next 15%: 10.2%
Next 4%: 8.4%
Top 1%: 6.5%
Source: Institute on Taxation & Economic Policy.
[Less affluent New Yorkers pay a notably higher portion of their income in taxes than the top earners do, thanks to the state's regressive tax structure.]
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From http://www.FairShareReform.org ...
The Fair Share Tax Reform Plan
Fair Share Tax Reform will raise sorely needed revenue and reduce the magnitude of painful cuts to healthcare, education and other essential services New Yorkers rely on every day.
A fair solution to the budget crisis will have to include cuts to popular programs -- but the wealthiest New Yorkers must also pitch in and shoulder a reasonable share of the burden. Working families should not bear the brunt of the budget crisis alone.
Fair Share Tax Reform would roll back tax cuts for the wealthiest New Yorkers. Over the last 30 years,New York has reduced income tax rates for the wealthiest New Yorkers by 50% and eliminated high income tax brackets, resulting in $8 billion of lost revenue each year.
As a result, working class families and the very rich pay now the same marginal tax rate - 6.85%.
Modest increases in tax rates for only those New Yorkers making over $250,000 would raise an additional $6 billion of revenue for the state. The slight increases would affect only the wealthiest 3.2% of New York State tax filers.
These new rates would keep New York competitive with both neighboring states and states with comparable economies. New Jersey's top rate is 8.97% for income above $500,000; California's top rate is 10.3% for income over $1 million.
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From http://www.gothamgazette.com/article/20090202/255/2817 ...
How to Balance the State Budget
by Frank Mauro and James Parrott
February 2, 2009
The financial meltdown and the recession have thrown state budgets out of whack across the country. Plummeting revenues have given New York State a projected budget gap of $1.7 billion for the current fiscal year and $13.7 billion for the new fiscal year that will begin April 1. The combined deficits of New York and 45 other states through 2010 are predicted to reach a staggering $350 billion, according to the Center on Budget and Policy Priorities.
Meanwhile the recession is taking a toll on people across the state. Tens of thousands of New Yorkers have lost their jobs, their homes or their hopes for a secure retirement or a better future for their children. New York's unemployment rate jumped by a full percentage point in December to 7 percent, the greatest one-month increase on record since 1976. The state has lost 121,000 jobs since its August 2008 job peak. More than 50,000 New Yorkers lost their homes through mortgage foreclosures last year.
As the economic damage ripples out from Wall Street, Gov. David Paterson has proposed drastically slashing state spending. School aid, health care, SUNY and CUNY, child care, program for the elderly, homeless prevention and long-overdue wage increases for social service workers struggling to stay above the poverty line will all feel the effects of the budget ax. While he chops away, though, the governor has steadfastly refused to call for a progressive hike in the state income tax -- an increase that would affect only the most affluent New Yorkers.
For the governor, "shared sacrifice" means that the state's low- and moderate-income families and communities must sacrifice while the fortunate few at the top, who benefited the most from the tax cuts of the last 15 years and from this decade's economic growth, will emerge from the budget largely unscathed.
Too Much Spending -- or Too Little Revenue?
Anti-government voices have mounted a steady drumbeat calling for steep budget cuts, ostensibly to rein in "out of control" state spending. The reality? State spending has increased to fund important new commitments such as providing medical care to people without health insurance and aiding urban school districts with high concentrations of children from poor families. The state government also dramatically expanded spending on property tax relief and acted to partially undo years of underinvestment in mass transit and public higher education.
Aside from these major commitments—all supported, by the way, by David Paterson when he was a state senator and lieutenant governor--state spending from 2004 to 2008 grew at less than 2.9 percent a year, barely the pace of consumer inflation.
What the state failed to do, however, was provide the revenues needed to finance such initiatives through the ebbs and flows of the business cycle. Much of the state's current budget crisis might have been averted had the state reversed even part of the tax-cutting spree carried out from 1994 through 2000. All tolled, these cuts now reduce the state's tax revenues by about $20 billion a year, an amount that would erase even the huge projected budget gaps of $17 billion for 2011 and 2012.
Less Pain, More Gain
Like the other 49 states, New York has to balance its budget in both good times and bad. Facing a sizable budget gap during a recession, states have only bad choices. Neither cutting spending nor raising taxes eases the downturn.
Many economists, however, point out that it is less harmful to the economy to raise taxes in a way that limits its effects largely to high income people than to cut state spending that mainly benefits low- and moderate-income people or that pays the salaries of teachers, police officers and other civil servants. In December, 120 economists from across the state sent a letter to Paterson saying, "Economic theory and historical experience [show] it is economically preferable to raise taxes on those with high incomes than to cut state expenditures."
This is because high earners typically spend only a fraction of their incomes in any given year, saving the rest. On the other hand, state spending goes to pay workers, provide services and put money in the hands of New Yorkers in need. This means the money goes directly into the economy, priming the pump at a time when it is desperately needed. Nobel Prize-winning economist Joseph Stiglitz of Columbia University made the same point in a letter to the governor last March.
Public opinion across the state strongly favors increasing income taxes on high earners over cutting spending for health care and education. The governor, though, has argued that raising taxes on the wealthy will drive them from the state.
No evidence exists to support that claim. In 2003, New York temporarily raised its top income tax rate from 6.85 percent to 7.7 percent. During the three years that this increase was in effect, the number of high-income returns grew significantly. This experience in New Jersey, which permanently raised its top personal income tax rate to 8.97 percent in 2004, has been similar, according to a Princeton University study.
Beyond a High-End Tax Hike
Paterson and the two top legislative leaders— Assembly Speaker Sheldon Silver and Senate Majority Leader Malcolm Smith — have committed to closing the projected $1.7 billion budget gap for the current fiscal year by Feb. 4, even though the year does not end until March 31.
What should they do? In addition to its investments in infrastructure, unemployment insurance modernization and other measures, the massive economic recovery bill now making its way through Congress includes aid, called “state fiscal relief,” for the explicit purpose of helping states balance their budgets without putting too much additional drag on the economy. Since this legislation is likely to go to President Barack Obama for his signature in mid to late February, the sensible course would be for Paterson and the legislature to wait to see exactly how much “budget balancing” aid New York will receive under the final legislation. The chances are excellent to certain that the state will get several billion dollars it can use right away, since important parts of the “state fiscal relief” is retroactive to Oct. 31, 2008.
In the unlikely event that the immediate “state fiscal relief” does not close this year's gap, the governor has already identified at least $600 million in various reserve funds that could be tapped to balance the books. On top of that, the state has at least $1 billion in its Tax Stabilization Reserve Fund that it could us if needed. Even if it had to borrow against that -- which seems unlikely -- the state still has $400 million in a newer "rainy day" fund as well as a few hundred million in other reserves.
Closing the projected $13.7 billion gap for the 2010 fiscal year will prove more difficult. A progressive tax increase would generate roughly $5 billion. This, along with several billion more from an increase in the federal payments for Medicaid or state fiscal relief in the stimulus package will address most of the budget gap.
Some budget cuts may be unavoidable, but the state should also consider closing tax loopholes such as one that benefits non-resident hedge fund general partners working in New York State and taking other actions to generate budget savings. These could include ending the wasteful and failed Empire Zones program, increasing the use of state engineers rather than contracting out that work to expensive consultants, or using the state's sizable purchasing power to get better prices on prescription drugs.
Restoring Tax Fairness
Raising taxes on high earners would also be a step toward restoring fairness to New York's graduated income tax, which has become significantly less graduated over the years. Today, because of the state's increased reliance on regressive sales and property taxes, New York's middle- and lower-income households pay a higher share of their incomes in state and local taxes than the top 1 percent or the top 5 percent (see chart).
Moreover, as astounding as it may seem, data indicate that all of the income growth in New York State from 2002 to 2009 has gone to the wealthiest 5 percent. In 2009, the other 95 percent of households have roughly the same incomes they had in 2002. When you factor in inflation, the combined income of the bottom 95 percent of New Yorkers actually shrunk.
Nobel Prize-winning economist Paul Krugman recently wrote in his New York Times column that, in the absence of Obama's massive stimulus proposal, we might see 50 Herbert Hoovers in state houses across the country respond to revenue shortfalls by slashing their budgets or raising regressive taxes, making the economy worse in the process. The new stimulus program is designed, in part, to head off that result. For the part of the budget gap that cannot be closed through federal funds, the state should turn to progressive tax policies. This is the right economic policy, sound fiscal policy, and the only approach in keeping with the governor's theme of "shared sacrifice".
Frank Mauro is the executive director of the Fiscal Policy Institute. James Parrott writes a regular column on the economy for the Gotham Gazette and is FPI’s deputy director and chief economist.
