Wednesday, December 17, 2008


"Austere" = More Taxes

New York's Gov. David Paterson unveiled his 2009 budget proposal, which The New York Times calls "austere." Paterson, himself, invoked doomsday imagery over the huge fiscal challenges facing the country and the state. However, looking at what Paterson actually proposed, one realizes that only in New York could a $121 billion budget -- that increases spending by $1.3 billion -- be considered "austere."

Cutbacks to help close a $15.4 billion deficit? Hah! As the Manhattan Institute's Empire Center project points out, New York state added more than 8,000 jobs to the public payroll over the last two years (the bulk of those hires were by disgraced former Gov. Eliot Spitzer). Yet, of that number Paterson is only laying off 521 (he expects to find other savings through 2,500 attritions -- right).

Where's the austerity? Well that's something that residents have to practice. Because, New Yorkers are facing some
137 hikes in taxes and fees. That includes proposed increases in taxes on tobacco, wine, beer and non-diet soda (seriously!). And, something that will undoubtedly endear New York to Apple, Amazon and other online retailers -- a tax on music downloads. Well, this is predictable, but appropriate given the circumstances:

Well, not that "Apple," but you get the idea.

This is interesting. New York is essentially run by Democrats right now (though there is bargaining over the state Senate, because of three smarmy Democratic senators who are trying to cut a deal to decide whom they support for majority control). The question rises: Can Democrats actually put together a sane budget without taxing everyone to death? Paterson's first stab at the budget suggests "no." And this is before many of the usual interest groups -- particularly unions -- get their hand into the pie. Indeed, they are already screaming about the unfairness of the situation just in reaction to one of Paterson's few good ideas -- trying to place some restraints on
public-sector employees pensions.

Painful times in the Empire State.

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