Governor David Paterson said New York faces an historic economic challenge during the state of the state address, which he delivered earlier this month.
However, the Governor said this is the time for action. "The pillars of Wall Street have crumbled. The global economy is reeling. Trillions of dollars of wealth have vanished," Paterson said. "Yet, this is no time for fear. This is a time for action. This is a time for courage. This is a time for hope."
Long Islanders may need a lot of courage in the coming years when they see their property tax bills, especially their school tax bills as the state's fiscal crisis is expected to decrease the level of state aid school districts have been receiving to fund part of their budgets. With the bulk of a school budget going to contractual salaries and benefits, school boards must find ways to cut other expenses or be faced with tax increases during a time when many can least afford it.
Still, despite the state facing a massive budget deficit, Paterson is confident that New Yorkers can rebuild their state. He said in this year's legislative session, the budget must be balanced. "Many people assume that the only way to build that future is to spend more. I disagree. I believe we can rebuild our economy, improve our health care and education systems and make the transition to clean energy - not by spending more, but by spending more effectively," he said.
Assemblyman Tom Alfano, ranking member of the Assembly Codes Committee, was critical of the governor for barely mentioning Long Island and for not offering a plan. "What we heard in the Governor's speech is absolutely true. We have some grave economic challenges in our State. That's no longer a news flash. What we needed to hear was a plan, a road map, anything. Instead, we heard nothing for the people of Long Island. We have a great deal of promise of new jobs and economic development with Belmont, the Nassau Hub and the revitalization of our downtowns and Hempstead Turnpike. The Governor did not address it and the staggering new tax package that is going to cost a family of four over $3,700 in new taxes," said Alfano.
The Governor may not have mentioned specific ways to balance the budget in the State of the State Address, but he did offer specific initiatives in his executive budget proposal. In order to close a $13.7 billion deficit, the executive budget recommends producing $3.1 billion in recurring General Fund revenue during the 2009-2010 fiscal year.
Among the proposals are imposing a sales tax on entertainment-related consumer spending including movie theaters and sporting events; imposing sales tax on television and radio services provided by cable, satellite or other means; impose state and local sales tax on purchases of prewritten software, digital audio, audio-visual and text files, digital photographs, games and other electronically delivered entertainment (this would include games, music, movies or TV shows downloaded from services on the Internet); increase the excise tax on wine and beer as well as increases in motor vehicle registration fees and motor vehicle license fees.
Residents most likely will be hit hard by property tax bills when schools are forced to make due with less state aid. The executive budget proposal also calls for the elimination of the STAR rebate check, which is sent to homeowners who receive Basic STAR or Enhanced STAR.
Alfano criticized the Governor's proposals to cut spending and raise revenues. "What we can't afford is a plan that takes away STAR from homeowners and hits kids when they download a song for their Ipod. It's just plain ridiculous. What we have to do is focus on investing in the economy and creating jobs. The goal needs to be to bring in business and foster an economic environment that expands the tax base. It can't be business as usual," Alfano said.
Paterson made it clear that hard choices await those in the state government, but that the state is not going to fail. "This should be the moment we take control of our deficit so we can return to our mission for New York. That mission is to rebuild our economy, to create good jobs, to improve our business climate, to develop the industrial sectors of the future like clean technologies and life sciences, to strengthen our colleges and universities so that New York will always have a skilled and educated workforce," he said.
Senator Craig Johnson applauded Paterson's commitment to reducing tax-hiking and unfunded mandates on schools and the local governments during the coming year as well as his vow to fight childhood obesity and make New York a leader in the struggle to reduce dependence on fossil fuels.
"I would have liked his address to include more mentions of Long Island-specific initiatives and issues, though it is clear that fixing the state's economic crisis is the top priority no matter what region of the state you live in. As a member of the new Senate Democratic Majority, I am committed to working with Governor Paterson and my colleagues in the Assembly to repair this budget deficit, put the state back on the right economic track, and make Long Island more affordable," said Johnson.