Niagara Gazette

January 26, 2014

EDITORIAL: Cutting from the top is the way to revive New York

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Niagara Gazette

Niagara Gazette — There are some things to like in Gov. Andrew Cuomo’s 2014-15 proposed state budget.

Proposals to reduce corporate income tax, eliminate it for upstate industrial operations and repeal the state surcharge on industrial facilities’ electric bills are all measures intended to help hasten the Empire State’s economic recovery.

Cuomo’s budget also calls for cutting state spending, in places. Roughly 10 percent cuts are proposed for the state departments of health and labor, as well as at the Office of the Medicaid Inspector General. Reduced operating assistance for the SUNY system is in the offing as well.

It’s almost as though the governor really “gets” it: The only way New York will be competitive again is if the state refrains from from taxing enterprise so hard, and puts its sprawling bureaucratic self on a diet.

But then other elements of the spending plan show he doesn’t get it at all.

Universal pre-K is a lovely idea with a heart-stopping cost: $1.5 billion within five years. Reportedly, some but not all of that money would come from state-approved casinos. The rest, we’re guessing, will come from tax and fee payers.

Then there is Cuomo’s proposal to have the state finance a multi-year local property tax “freeze,” under improbable conditions.

In its first year, the program would have the state paying rebates to property owners in municipalities that stay under the so-called 2 percent tax cap. In succeeding years, rebates or income tax credits would go to property owners whose taxing communities — cities, towns, villages, counties, school districts, et cetera — show the state plans to reduce their tax levy by 1 percent per year, by consolidating or sharing services with other taxing entities.

In cases where local government units are already operating about as lean as can be, an awful lot of “small” cuts might be needed to create the 1 percent-per-year tax levy reduction that gets residents a consolidation rebate. That’s especially true if fixed costs including local contributions to state employee pension systems keep rising.

Cuomo having dangled the promise of tax relief before New Yorkers conditionally, it’s easy to foresee local officials being blamed when the rebate checks aren’t in the mail. It’s a bit of a dirty trick on the governor’s part.

It needs to be understood: All local government units are creations of the state, existing to carry out state-created programs and policies at the local level. Nearly every dime raised in taxes, by cities, towns, villages, counties, school districts and special districts, is raised to cover the cost of procuring and delivering services in a manner mandated by the state.

Reform of New York is up to the state legislative and executive branches which, between them, make the rules and set the tone for all of the state.

A good place to start that reform might be with the Senate Majority Coalition’s list of most counterproductive rules and regulations applied to businesses. Lawmakers could use some practice shrinking the state’s reach; and when they get good enough at it they could move on to repealing the unfunded mandates and enterprise-crushing laws that are the root cause of New York’s sustained population loss.