(This is the final segment of a five-part series summarizing and explaining the New York State 2003-04 adopted budget.)

With enactment of the New York State budget, almost $200 million in tax cuts are scheduled to be phased in for SFY 2003-04, including: elimination of the Marriage Penalty, which will save married couples filing jointly $11 million; expansion of the Earned Income Tax Credit, which will provide $15 million to low income working families; and continuation of the College Tuition Deduction Program, which allows families and students to deduct tuition expenses, saving them $14 million.

To cover the structural deficit presented to the Legislature, a number of recurring revenue actions were also enacted. They include the elimination of corporate loopholes and a mandate to collect owed sales taxes on purchases of cigarette and gas purchases at facilities operated by Native Americans. In addition, the Legislature has been able to negotiate an agreement regarding the start up of Video Lottery Terminals at the state's racetracks, generating $150 million this year and growing to $360 million in the next fiscal year. Also, the Legislature authorized New York State to participate in discussions to streamline sales tax statutes in all states allowing for collection of sales taxes on purchases made over the Internet. New York's participation will not only accelerate negotiations between states toward agreement, but will increase sales tax revenues by approximately $1 billion.

Finally, to close a short term revenue gap, the Legislature imposed a modest increase in the state's personal income tax, focusing on the top 5 percent of New York's highest income earners including non-residents of New York who represent approximately 18 percent of all taxpayers affected by this surcharge. This surcharge raises the top tax rate of 6.85 percent to 7.5 percent this year. Beginning 2004, the surcharge begins to phase out with a complete elimination by 2006. Revenue from the surcharge 15 expected at $1.6 billion in the current fiscal year. Also a two year increase in state sales tax by one quarter of 1 percent is expected to raise approximately $500 million per year.

In the end, the Legislature worked in a bipartisan manner and responded to the state's fiscal crisis in measured tones, providing needed funding to support the education of New York's children; keep hospitals and nursing homes open; prevent the closure of mental health facilities without a comprehensive plan for the placement of patients into alternative services; and to support the link between higher education, high technology and jobs.