Budget Proposal: Good on Cutting Manufacturing Taxes, Bad with Public Financing of Campaigns

By Assemblyman Will Barclay

As he is constitutionally required to do, the Governor proposed his 2014-15 budget last week.

It was a status quo budget proposal that did not contain any revolutionary ideas or reforms but it does keep spending in check and does contain some positive proposals.

It should be noted that this budget proposal is a starting point for negotiations with the State Legislature.

The Governor and Legislature have until April 1 to agree on a final budget.

The following are some of the positive proposals that Cuomo put forth in his budget:

· Proposes to keep spending in line, with total spending increasing by 1.7%. This is congruent with the last three years, which each maintained spending increases under 2%.

· Proposes to eliminate corporate franchise tax for Upstate manufacturers and give all manufacturers a property tax credit.

· Proposes to merge the bank tax with the corporate franchise tax and reduce the rate from 7.1% to 6.5%.

· Proposes to eliminate 18-A assessments, the energy tax on utilities, for industrial consumers immediately and phase the assessment out for residential customers by 2017.

· Proposes to prevent the use of EBT cards in liquor stores, casinos, gaming establishments and other adult-oriented entertainment venues. I’ve advocated for this for a long time. Indeed, I would go even further and prohibit the purchase of cigarettes and alcohol with EBT cards. EBT cards are issued through the Office of Temporary and Disability Assistance as a cash option for people who receive food stamps so they are able to supplement some of what food stamps do not cover, such as paper supplies or other household items. Abuses of the EBT cards have continued on too long and therefore this is a good first step.

· Proposes property tax relief. While I am pleased that the Governor is beginning to understand that property taxes are a crushing burden on Upstate homeowners, he has yet to make a substantive proposal to eliminate what generally is the underlining cause for our high property taxes, that is, unfunded mandates from the state. Nevertheless, I am pleased that he is providing some suggestions on how to provide property tax relief and his proposals merit additional review and discussion.

On the flip side, Cuomo’s proposed budget contains a number of items that I cannot support.

In addition, there are general proposals that I wished he had included in his budget and that I hope can be added in through the negotiation process with the Legislature.

The following are some of the points in the Governor’s budget that are problematic:

• Proposes to publicly finance campaigns.  In short, the Governor is proposing a system of public financing of campaigns similar to the system that is in place in New York City.  This system has not been successful in New York City and therefore it is curious why anyone would want to implement it on the state level. It suppresses free speech, it will cost the taxpayers more money, and it will not engage more people in politics. All in all, it is a terrible idea.

• Proposes increases to school aid but fails to reform our school aid formula. The additional aid still is not going to the schools that need it the most, that is, low-wealth school districts. I would have liked to see the Governor propose to eliminate the gap elimination adjustment that was put in place in 2010 when the state faced a more severe budget crisis. The GEA essentially reduced Foundation Aid, which had a severe effect on the budgets of low-wealth school districts, as cuts were made across the board. Federal stimulus funds helped lessen the effects for school districts but those dollars have expired, leaving districts to cut staff and programming.

Also, the Governor failed to mention anything about hydrofracking in his budget and had very few proposals that would directly benefit Central New York. At the same time, he indicated several proposals that would directly benefit other parts of the state such as the Buffalo Billion ($680 million in new capital appropriations), a $180 million investment in “Nano Utica” and  investing in tourism in the North Country through funding the repair of roads and attractions. These are all good projects but I would like to see more for CNY.

As mentioned, this can be described as a status quo budget. It is a starting point and I look forward to beginning budget talks and hope it’s an open process where rank and file members have their time for input. I also look forward to hearing from many of you on the Governor’s budget as more details are revealed in the coming weeks.

If you have any questions or comments or if you would like to be added to my mailing list or receive my newsletter, please contact my office by mail at 200 N. Second St., Fulton, NY 13069, by e-mail at [email protected] or by calling (315) 598-5185.