Tuesday, December 16, 2008

New York State budget problem

So I have been listening to the argument that New York State needs to increase it's taxes to make the budget. It is expected that the State will miss by some $15 billion, and thus something needs to be done.

The current plan will increase taxes on everything from State college tuition to Gatorade. Literally. Expect higher prices for gas, and tax back on clothing under $110 dollars. Costs of Driver's liscences will go up, as will hair cuts, and your cable/satellite tv/radio bill. Internet downloads will also now have a cost, no matter what you download. Higher prices will also be found at the golf courses, parks, and camping areas (so every income level can feel the bite).

But don't fret because with these increased costs there comes increased spending. Yes I said spending. Like $350 million in new student loans (yes I realize that the new 14.5% increase in State tuition costs will absorb some of this) for 45,000 students. Increase welfare payments for 200,000 families. A $1 million dollar anti-obesity program (obviously not more than one television commercial run once across the State at 30 seconds). Increase pay for 1,200 state judges.

Other increases, which sound reasonable will include:

  • Increase funding in programs to prevent lead poisoning in children - $2.5 million
  • Increased funds for food banks, pantries, soup kitchens and shelters
  • Returning military veterans and their families get the government services to which they are entitled - $1.1 million

Obviously there is an imbalance here. There is far more spending than money coming in. And that is before all the new spending. So cuts in spending are needed. Yes, some spending will be cut, imagine that.

Where will the cuts go? Cutting income tax loopholes. Because we all use them to rake over the State, right? And reduced funding for hospitals, clinics and nursing homes. And 3.3 percent cut in school aid spending - roughly $600 million dollars (almost 2x the amount of new loans).

One of the biggest things will be cutting the Empire Zone program in half. You know that program. It's the one where companies get a break for staying in New York State instead of going to a cheaper State like most companies have done in the last decade. So cut that in half and increase corporate taxes, and personal, and increase taxes on all goods. That will keep a company in state and make more people employed.

But there is still a shortfall in this nightmare pipedream. So Gov. Patterson will add video slot machines at Belmont in case anyone who has some money left can lose it there.

This is a bad budget. It's based on a dumb premise. That companies will want to spend the extra money to say they are in New York State. The place already with the highest taxes in the nation. And thus their employees will be able to survive on less money after all these new taxes. And children will get better educations since their school will have less funding, meaning better jobs in the future.

Seriously.

Why don't we cut unessential spending, not create new spending, and maybe lower taxes on a few essential items like gas. Maybe lowering the State sales tax by half a percent. Maybe keeping the internet free. You think that maybe these things might stimulate growth. Maybe get more people spending here than in other states?

Hey here is a big idea. Modify the state no smoking law such that private businesses have the option to be a smoking or non-smoking establishment. With proper signage in the front of the business so patrons know what their choices are. Restaurants and bars might recover some of the 30% loss in revenues they have taken and never recovered when the state law was enacted. Add a drop in the tax on cigarettes so people might not travel to, or buy from people that travel to, other states (NJ, PENN) to buy their cigarettes.

I bet just those simple things will bring in more money than raising the taxes on everything as people lose money to the stock market, increased (it will happen sooner or later) energy costs, and fewer jobs (due to credit crisis or the fact that being in any other state is cheaper).

My ideas definitely can't be worse than what is being proposed now. And I bet no one has checked the benefit of what I just said.

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