Extending the New York State millionaire's tax to help sustain current spending levels would mask and worsen the state's fiscal problems, rather than improve them.
Our state government is unworkable on nearly every level. Pension and health care obligations are spiraling upward, salaries are climbing far faster than revenue, efficiency is nearly nonexistent, infrastructure is crumbling and patronage jobs seem to be available to anyone with influence. The current funding crunch, with a projected $9-billion budget deficit, provides a real impetus to fix these problems.
Our politicians cannot be trusted to spend our money wisely. Until they prove otherwise, and until structural changes are made in the way the state does business, why would we give them any more to waste?
But State Assembly Speaker Sheldon Silver (D-Manhattan) is expected to introduce legislation this week to prolong the 2 percent income tax surcharge on single people making more than $200,000 per year and families earning more than $300,000. The extension would increase revenue about $1 billion this fiscal year and as much as $4 billion annually thereafter.
Failing that, Silver says he will try to pass a version applying only to those making more than $1 million per year.
An extension of this tax to better the state, to fix roads and bridges, create private sector jobs or revolutionize education and health care, might make sense. In this case, though, the money would be used to postpone needed changes.
That's exactly what happened over the last two years with federal stimulus funding. As economic collapse set in and state revenues tumbled, the federal government swooped in with billions of dollars in one-time aid. It should have been an occasion for frugality. Instead, state spending increased dramatically, part of the reason we face such steep cuts now.
Gov. Andrew M. Cuomo's proposed budget includes big cuts in education, and the most outspoken advocate for the tax has been the New York State United Teachers union, which has spent more than $1 million on television advertising promoting the extension as a way to avoid layoffs. Nobody wants good teachers laid off, but a strong education system going forward demands reforms in the way teaching contracts, compensation and evaluations are structured. Extending this tax to prevent these reforms would be a step backward, not a cure-all.
In like manner, proposed cuts to Medicaid could be lessened by extending the tax. That might keep the system running, but it wouldn't confront the fact that Medicaid costs twice as much per patient in New York, on average, as it does in the rest of the nation. The program doesn't need a revenue Band-Aid, it needs reconstructive surgery.
Spending is the problem, not revenue. Until lawmakers get that under control, why tempt them with more?