Friday, January 16, 2009

New York State’s Troubling Budget Shortfall

Simply put, immediate state legislative steps must be taken to reduce New York State spending. Increasing taxes and fees on already overtaxed state residents will directly result in a significant population and business migration to locations without the ridiculous financial burden imposed by New York State’s sales tax, property tax, school tax, and extravagant state fee structures. Marginal business will simply cease to be going concerns…and fold up shop. There will be no billion-dollar bailout for small business. An elementary principle in basic economics is the “Law of Diminishing Returns”. Typically applied to manufacturing & agricultural production--the law can logically extend to government taxes and fees. Beyond some point--further increases in taxes and fees--will rationally result in a smaller tax base and smaller treasury revenues--particularly when many residents and businesses have alternatives to live and do business elsewhere outside of New York State. Here are seven commonsense state legislative initiatives that should be immediately implemented:
  • There should be no new NYS taxes and no new fees.
  • Current NYS tax rates should not in any way be raised.
  • Current NYS fees should be frozen at January 1, 2009 levels.
  • No new or expanded NYS spending programs should be approved.
  • No increase in current state agency budgets, not even as adjusted for the present very low inflation rate.
  • Cut unclassified NYS employees, contract employees, and consultant services by 25% on or before September 30, 2009. Any state programs impacted by fewer consultants--and/or less employment other than by civil service classified employees--should be delayed, extended, or terminated.
  • Effective October 1, 2009, offer current classified NYS employees over age 50 a rational early retirement incentive program; where employee physical age plus years of state service = 76 or higher, employees may retire--at their descretion--from state service within their current tier without early retirement penalty. The agency shall hold the item vacant for a period of not less than twelve months.

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