Long to Spitzer: One More Time – The Budget Spends Too Much

Ft. Hamilton Station, NY – State Conservative Party Chairman, Michael R. Long, called upon Governor Spitzer and the Senate Majority to consider the needs of the people of New York and reach an equitable budget for everyone. Medicaid spending is out of control and an increase of business taxes will force layoffs and closings. As the last week before the budget is due begins, everyone has to consider the ramifications of what they are proposing. Long’s letter to the Governor and Majority Senate Members follows:

Yesterday I wrote you reminding you that the New York State Conservative Party’s assessment of this year’s budget is simply that New York’s budget is spending far too much of its residents money.

Last night an Albany News station (WRGB) reported that California’s budget is $143.4 billion with a population of 36 million people, California being the most populated state in the Union. Texas, the second most populated state reports a two-year budget of $161 or $80.5 billion for 22 million people. New York is the third largest state in population with 19.2 million people and a budget, if passed as is, of $120 billion. Florida is fourth in population with just under 18 million people and a $71.2 billion dollar budget and Illinois with just 13 million people has a budget of $60 billion.

The largest portion of New York State’s budget is Medicaid. New York spends more than California and Texas combined for its Medicaid coverage and those two states have a combined population of 58 million. New York has 39 million less people and it is preposterous to know that we pay more than both California and Texas.

We have often called for New York to review what Medicaid coverage provides its clients and the above information certainly reinforces the need to reform New York’s coverage immediately.

While we support your initiative to begin the process of reforming health care costs in New York, certainly this information will stress just how much must be done to get New York’s health care cost under control.

We also read, with interest, Paul E. Francis’s letter (March 21, 2007) to Majority Leader Joseph L. Bruno in which, Mr. Francis analyzes the “avails” the Senate believes it has available to spend in their proposed budget.

Certainly, with Mr. Francis’s expertise in the budget, we believe his analysis that many of the Senate claims are inaccurate.

What we find disturbing is Mr. Francis’s belief that closing loopholes for businesses will have a positive effect on New York and its residents.

Yes, it will raise income for New York State, but at what price?

Just one bank, with headquarters in Western New York, will be required to pay an additional $40 million in increased taxes. An increase of just 2.4% will produce a windfall to New York State of $40 million. How many employees will be let go to absorb the additional taxes? One hundred? Three hundred? Or what the bank projects…800!

If one bank must cut 800 employees, what is the ripple effect of that?

How many smaller businesses will close in Western New York, an area that can hardly afford to lose 1 job, let alone 800.

Michael P. Smith, President and CEO of the New York Bankers Association, stated on February 27, 2007 at the public hearing regarding the New York State budget, that Governor Mario Cuomo, who signed Chapter 817 Laws of 1987, that this law was indeed necessary to “return the Federal tax reform ‘windfall’ to business taxpayers…”

Banking, in New York State, is not the same as running a small “Mom and Pop” store. The industry has several distinct sectors and is an absolute necessity to stimulate the economy in various ways, including housing credit, which is dependent on the Real Estate Investment Trust (REIT), and the wage factor discount incorporated in the law to stimulate New York employment.

These factors have helped the banking industry in New York State and decisions are made on the consistency of the tax law.

To change them now, by closing what you have identified as a loophole, will force layoffs and the distinct possibility of moving headquarters out of New York.

This is not what you promised the voters in New York State and we urge you to reconsider this portion of your proposed budget.

Let me say this one more time…New York’s budget spends far too much. You have the opportunity and the support of New Yorkers to make the necessary changes now..

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