Spitzer Proposes New Taxes and Fees

ALBANY -- Gov. Eliot Spitzer proposed an array of new taxes and fees, $1 billion in health care cuts and scaled back plans for new education aid and property tax relief in his second executive budget, The New York Times reported Tuesday.

Click here to read the pdf budget.

With the state facing a projected $4.4 billion deficit in the upcoming fiscal year --which begins on April 1 -- the governor proposed a spending increase of 5 percent, the lowest proposed spending increase in an executive budget in several years. That said, it was one that critics said was not sharp enough given the worsening economic conditions. Further, the governor called for an increase of nearly 1 percent in the state workforce, bringing the number of workers over 200,000, the paper reported.

Of particular sensitivity will be $738 million in proposed new taxes and fees, though there is no broadly based income tax increase, the paper reported. Among the new measures were modest increases in everything from taxes on gasoline and malt liquor to increases in fees the state charges for home purchases above $175,000 and steps aimed at increases in taxes paid by out-of-state residents who work or do business in New York, the paper reported.

The administration said it was not raising taxes, but closing loopholes, though a number of their steps will likely be felt by consumers. Among them was a plan to reclassify Health Maintenance Organizations so they are taxed as insurers, a move that will cost HMO’s more than $200 million a year and presumably be passed on to patients, the paper reported.

Republicans in the Senate particularly objected to proposed cutbacks in the School Tax Relief, or STAR, program, which sends money back to homeowners to modestly offset their property taxes. The state had committed to return $1.8 billion to property taxpayers this year; that will be scaled back to $1.25 billion, the paper reported.

-- NYSSCPA.org News Staff

Posted on 1/22/08