Patiki Budget Released - SuffolkJournal.com

Pataki Budget to Increase LI Taxes
by Jane Lee Bock

January 30, 2003

Less than a week after New York State Governor George Pataki promised a Long Island business contingent that tax increases would not be a part of his 2003 fiscal plan he released a budget that promises to increase Suffolk property owners' school taxes by at least $98 million.

The increases will come in the form of school taxes because the Governor's budget significantly reduced state aid to Suffolk schools and the districts will have no place to go to make up the shortfall except to the property owners' pockets. Only two Suffolk school districts may actually see increased aid. Among the hardest hit will be the Huntington district with a 23.7 percent loss, and Elwood's district which will see a 20.95 percent loss.

Also in distress will be the South Huntington school district which, although they will see only a 12.2 percent drop in aid amounting to a little over two million dollars, narrowly passed a $57 million bond just last night that is supposed to fund construction, repairs and transportation equipment. Another (smaller) South Huntington bond failed that night which would have provided enhanced science programs and a media center.

"We will work together to weather the fiscal crisis both at the state level and at the county and local level without resorting to the massive tax increases that we know destroy jobs and opportunity," stated Pataki at a Plainview gathering of local business executives last week to great applause, although he never gave details about how he would fix the existing and pending deficits.

According to Pataki's presentation that day, in 1989, government chose massive tax increases and chose to delay already scheduled tax cuts.

The subsequent national recession in the 1990s lasted 8 months, New York State's lasted 39 months. Long Island's recession lasted 46 months.

In terms of education spending, "certain" categorical programs will be suspended, according to Pataki, while others such as Bilingual Education, Improving Pupil Performance, Categorical Reading and Magnet schools will be maintained. State Aid overall will be reduced by $1.2 billion.

Even with the aid cuts however, Pataki claims to also be providing "meaningful mandate relief for our schools."

"Our policies have also allowed working families to keep more of what they earn," said Pataki in his budget address, although Suffolk property owners may disagree come school budget time. " Our tax cuts have reduced income taxes on those making less than $30,000 a year, by nearly 50 percent, and we have removed more than 400,000 working families from the tax rolls altogether."

The state faces a two-year, $11.5 billion dollar shortfall, a budget gap larger than the total annual budgets of 36 other states. The upcoming fiscal year adds another $9.3 billion deficit. Spending cuts proposed have been a freeze on salaries for all appointed employees earning over $75,000, a request for five percent reduced operating costs at all agencies except public security, reduction of Executive Chamber costs by roughly 19 percent, reducing the state workforce by 5,000 positions, and Medicaid reforms.

According to the budget summary charts, 53 percent of the state's revenues come from personal income taxes, 10 percent from business taxes, 25 percent from user taxes and fees, and "other sources" supply the remaining 12 percent of state revenues.