No One Is Safe From NY's Wide Reaching Budget
Proposed $131.8B Tax-And-Spend Plan Has Critics Howling
Average Family Of 4 May Be Shelling Out $5,000 Additional
NEW YORK (CBS) ―
Get ready to pay up.
The budget crisis in New York is so dire lawmakers are planning tax hikes on some of life's necessities, as well as some simple pleasures.
From bottled water, to beer, cigars and electricity, the cost could be going up for all of these and more.
Governor David Paterson said the new state budget is shared sacrifice, but its a tough sell.
If you live in New York City and suburbs there is only one thing you can do in reaction to the new state budget – gasp.
"This is not a happy budget," Senate Majority Leader Malcolm Smith, D-Queens, said.
No kidding. Critics said there are so many taxes and fee hikes the average family of four in our area can expect to shell out an additional $5,000 -- for now.
"I would like to tell you that this budget brings to an end our fiscal crisis, but I can't do that. That would be intellectually dishonest," Paterson said.
The budget puts an added income tax on households earning over $300,000 to raise $4 billion.
"The rich are going to do their fair share in trying to close this budget deficit and now all those that were yelling for them to do it need to do the same," Paterson said.
And they will.
The details of the new budget include:
* Essentially flat state school aid. Aid to public schools would increase about $1.1 billion, according to Assembly Speaker Sheldon Silver, and eliminate the $700 million cut Paterson had proposed in December. But that results in almost no increase for schools that have gotten bumps of billions of dollars from lawmakers pressured by school districts back home. School aid will total more than $21 billion, one of the highest per capita levels in the nation. But school advocates expected $1.5 billion more this year, even after Paterson's cut was restored, under a promise by the state following a court decision it lost for not providing a sound basic education for years.
"There are going to be layoffs of teachers and other educators," said Billy Easton, executive director of the Alliance for Quality Education, a union-allied advocate for public schools. "There are going to be cutbacks of programs and kids in districts that are already underfunded, the problem is going to continue ... and that's a travesty of justice."
The last time school districts received far less state aid than expected local property taxes were subsequently increased by an average of 10 percent.
* About $3 billion of taxes and fees, from motor vehicle registration charges to public college tuition and other costs that would affect everyday life for most residents.
* No more tax rebate checks to residents, although the STAR exemption program and NYC STAR credit will continue to provide $3.3 billion in property tax relief.
* A bigger bottle bill. A nickel deposit would be required of bottled water, to go along with carbonated drinks. The state will get about $115 million of the unclaimed deposits, with bottlers keeping the rest under a last-minute deal worked out with lobbyists for the Coca-Cola Co.
* Taxing little cigars often called cigarillos at the same 46 percent rate applied to cigarettes, instead of the 37 percent rate now.
Meanwhile, Paterson had proposed more than $1 billion in cuts from health care in his mid-December budget to the Legislature. He sought to force more funding to be moved from traditional and expensive hospital care to more efficient community-based and preventive programs. The Legislature restored about 69 percent of funding to hospitals, 73 percent to pharmacies, 60 percent to home care programs and 43 percent to nursing homes.
The Legislature also restored:
* $340 million of critical funding to New York City, Silver said.
* Funding for teacher training centers and adult literacy and bilingual education programs.
* $125 million more to the State University of New York, for a total of $2.5 billion in funding; and $86 million more to the City University of New York, for a new total of $1.4 billion.
* $49 million in cuts to community colleges.
* Almost $50 million to the Tuition Assistance Program, which provides financial aid to college students.
The Legislature also created a $50 billion program to provide low-interest loans to residents attending college and rejected a proposal for a gas tax.
New Yorkers can't even begin to fathom what they've been hit with.
"You know it's a really difficult situation. There are no clear solutions. It just seems to tax too much," said Upper West Side resident Jamie Kalfus.
Critics, like Senate Minorty Leader Dean Skelos, R-Long Island, slammed the Legislature for secretly negotiating a $10 billion increase in spending at a time of fiscal crisis.
"These numbers are absolutely staggering, and the height of irresponsibility on the part of the Democrat leadership in this state," said Senate Minority Leader Dean Skelos (R-L.I.). "The public should be outraged."
But Gov. Paterson vigorously defended the secret negotiations.
"Nobody wants to publicly, other than governors, who are charged to do it, put their issues on the table. That's part of what negotiations are about," Paterson said.
By the way, Paterson has a $20 million budget for his staff and half a million dollars budgeted for travel.