Two weeks ago, the Legislature was called back into session to conclude this year's long and torturous budget process.
When the Democratic majority of the State Senate passed the revenue portion of the budget on Aug. 4, it was decreed that final action has now been taken on the 2010-2011 state budget. This was one of the latest budgets in state history and, unfortunately for New Yorkers, it is also one of the worst.
This revenue portion of the budget increases taxes and fees by $1.2 billion. This is in addition to the $8 billion of new taxes and fees that were included in last year's budget.
Some of the new taxes in this year's budget include: the temporary reinstatement of sales tax on clothing purchases under $110, which is expected to raise $330 million; a reduction in allowable itemized deductions for taxpayers earning over $10 million a year (as a result wealthy taxpayers will now be able to claim deductions for only 25% of the charitable contributions); and a $1.60 increase in the state cigarette tax -- which makes New York's taxes on cigarettes the highest in the nation.
Maybe most egregious is the state's deferral of state tax credits earned by businesses that invest or create jobs in New York. This deferral is expected to raise the tax bill for businesses by $200 million this year and by more than $1 billion in both 2011 and 2012 when fully implemented.
These tax credits were specifically geared towards helping New York business grow and create jobs. By deferring them, New York is just continuing to add to the poisonous business climate that already exists in Upstate New York.
In addition to the revenue bill passed in the state Senate last week, the Democratic majorities in both the Assembly and Senate passed a contingency plan that would be put into place if Federal Medicaid Assistance Percentage (FMAP) for the state did not come through. I voted against this measure for several reasons: